Creditor and Lifestyle Protection Insurance in Europe Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, UK Report Prospectus January 2018 Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 1
Prospectus contents Page What is the research? What methodology has been used? How do lending institutions surveyed break down? What is the report structure? What are the key features of the research? How can the research be used? How can the PartnerBASE be used? Who can use the research? What are some of the key findings? What is the price? How can the research be purchased? 3 4 5 6 7 8 9 10 11-14 15 16 Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 2
What is the research? Finaccord s report titled Creditor and Lifestyle Insurance in Europe offers updated and detailed insights into the market for creditor and bill payment protection insurance (sometimes also referred to as payment protection insurance or loan-related insurance) in 20 countries. Across the 20 countries in scope, this market was worth around EUR 39.5 billion in gross written premiums in 2016, including coverage for life, permanent disability and critical illness as well as the temporary disability and unemployment elements. However, the progress of individual markets has been variable in recent years with steady growth in some territories offset by declines of varying degrees of magnitude in others, sometimes as a result of regulatory intervention. Drawing on the results of a survey of close to 1,700 organisations in the 20 countries, the report analyses the provision of creditor and lifestyle protection insurance by lending institutions, utilities / telecoms firms and other types of distributor. Moreover, it also documents the operating models used for these types of insurance and the weighted share of partnerships of providers selling through the distributor organisations researched. The PartnerBASE dataset that accompanies the study details each of 1,570 distribution agreements traced by Finaccord. Together, the report, PartnerBASE dataset and market data file will provide you with the definitive guide to current and future opportunities in creditor and lifestyle protection insurance in Europe. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 3
What methodology has been used? Finaccord s survey of the provision of creditor and lifestyle protection insurance by lending institutions and other distributors in Europe was carried out in 2017 and focused on all significant lenders and telecoms / utilities firms in each country. The research embraces the following information: whether creditor and / or bill payment protection insurance is marketed to borrowers; if so, in association with which underlying lending products? if so, which risks are covered? if so, how through an external underwriter, multiple external underwriters, an external broker, a joint venture underwriter, a captive underwriter or a combination of these approaches? if so, who are the insurance providers used in each product category? As such, and combined with additional secondary research into both alternative distribution channels and regulatory developments, this constitutes an update to the most thorough and comprehensive research into the subject available for Europe. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 4
How do lending institutions surveyed break down? UK, 129 Turkey, 41 Switzerland, 87 Austria, 91 Belgium, 62 Czech Republic, 57 Denmark, 61 Telecoms / utilities firm, 391 Automotive captive, 133 Sweden, 91 Finland, 48 Spain, 95 France, 106 Bank, 591 Slovakia, 38 Russia, 87 Romania, 58 Portugal, 48 Poland, 78 Norway, 56 Germany, 163 Italy, 122 Netherlands, 65 Specialised lender / retail sector card issuer, 405 Savings bank, 60 Co-operative bank / credit union, 45 Building society, 68 For a full list of the organisations contacted for the research and included in PartnerBASE, please contact Finaccord. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 5
What is the structure of the report? Executive Summary: providing a concise evaluation of the principal findings of the report. Introduction: offering rationale, description of methodology and some definitions. European Overview: including an overview of both the creditor and lifestyle protection insurance market and underlying retail lending markets in Europe, comparing and contrasting the recent development of the mortgage, consumer finance and credit card sectors in each country covered. Analysis of the creditor insurance market includes its segmentation by country, underlying lending product and cover type in 2012, 2016 and with a forecast to 2020, and identification of the eight largest groups in each of these fields by weighted share of partnerships. Also included is a summary of the risks covered by creditor and lifestyle protection insurance policies. Specific country chapters (20): an in-depth analysis of the market for creditor and lifestyle protection insurance in each country including: introduction to the banking sector; analysis of the consumer lending and credit card markets; investigation into provision of creditor and bill protection insurance by the organisations researched and risks typically covered; overview of operating models used for provision of these types of insurance; analysis of the weighted share of partnerships of underwriters; size, segmentation and growth rate of gross premiums written for creditor and lifestyle protection insurance with data spanning 2012, 2016 and 2020. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 6
What are the key features of the research? Key features of this report include: quantification of the value, segmentation and growth of markets for creditor and lifestyle protection: how much are these markets worth and what is their future development potential? consideration of operating models used for creditor and lifestyle protection insurance: how does the use of captive and joint venture underwriters by distributors differ between countries? calculation of weighted provider share of partnerships: Finaccord s unique quantitative analysis identifies which underwriters of creditor and bill protection insurance hold the relationships that offer the most potential; analysis of the many types of creditor and lifestyle protection insurance policy marketed in each country and how the risks covered vary from one distributor to another; investigation into alternative distribution channels for selling creditor insurance: a number of factors, including regulatory intervention, are increasing the potential for entities other than lending institutions to sell creditor insurance in certain countries. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 7
How can the research be used? You may be able to use this report, plus the PartnerBASE and market data file that accompany it, in one or more of the following ways: appreciate the magnitude of the opportunity in creditor and lifestyle protection insurance in Europe and how this breaks down between policies cross-sold in conjunction with mortgages, point-of-sale automotive finance, other consumer finance, credit cards and household bills; identify partnership opportunities for these types of insurance and prioritise them according to the potential that they offer as defined by the size of distributors retail customer base; understand the supply structure for creditor and lifestyle protection insurance in Europe and whether specialists are winning business by virtue of their focused approach; assess the extent to which the provision of temporary incapacity and unemployment modules within these insurance policies is commonplace in different European countries; gain insight into the presence of leading creditor insurance market participants including Allianz, APRIL, Assurances du Crédit Mutuel, Aviva, AXA, BNP Paribas Cardif, CNP, Crédit Agricole Assurances, CreditLife International, MetLife, Société Générale Insurance and Talanx. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 8
How can the PartnerBASE be used? Select country Choose product type Identify insurance providers Organisation Country Category Product type Product offered? Operating model Partner(s) IberCaja Spain Bank Bill payment protection No IberCaja Spain Bank Creditor insurance - consumer finance Yes External underwriter Caser IberCaja Spain Bank Creditor insurance - credit cards No IberCaja Spain Bank Creditor insurance - mortgages Yes External underwriter Caser Iberdrola Spain Telecoms / utilities firm Bill payment protection Yes External underwriter MetLife Iberdrola Spain Telecoms / utilities firm Creditor insurance - consumer finance n/a Iberdrola Spain Telecoms / utilities firm Creditor insurance - credit cards n/a Iberdrola Spain Telecoms / utilities firm Creditor insurance - mortgages n/a Look up specific organisations Choose operating model Note - The PartnerBASE also includes fields showing the category of organisation, its UHC (where part of a major group) and the UHCs that own or co-own (in the case of joint ventures) the partners used for each product type. Source: Finaccord Creditor and Lifestyle Protection Insurance in Europe PartnerBASE Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 9
Who can use the research? 1. Insurance providers: this research is a unique guide to a significant segment within the consumer insurance market in Europe - be fully appraised of what developments in creditor and lifestyle protection insurance markets could mean for your organisation; 2. Providers of third-party administration services: due to its specialised characteristics, insurers sometimes outsource the administrative processes associated with creditor and lifestyle protection insurance, thereby creating opportunities for third-party providers; 3. Banks, other lending institutions and utilities / telecoms firms: how does your organisation s ability to cross-sell creditor and bill payment insurance compare with its peer group in Europe and could you use a captive insurer to underwrite third-party insurance risks? 4. Regulatory and trade bodies: appreciate market and competitor dynamics in up to 20 countries across Europe from an authoritative, comprehensive and transparent information source about this generally under-researched subject; 5. Management consultancies: are you helping an insurance company with its bancassurance strategy or evaluating how it can develop in creditor and lifestyle protection insurance? Understand the current status of this market in Europe, saving time and effort on researching the subject yourself. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 10
What are some of the key findings? 1) Total consumer lending balances in Europe have been growing steadily and exceeded EUR 9 trillion for the first time in 2016 EUR trillion 10 8 Other 6 4 2 0 2012 2013 2014 2015 2016 Netherlands Switzerland France Germany UK Source: Finaccord analysis of central bank data Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 11
What are some of the key findings? (cont.) 2. AXA Partners is likely to be the leader in the Swedish market for creditor insurance related to consumer finance CREDITOR INSURANCE RELATED TO CONSUMER FINANCE IN SWEDEN: BANK PROVISION RATE AND OPERATING MODELS CREDITOR INSURANCE RELATED TO CONSUMER FINANCE IN SWEDEN: WEIGHTED PROVIDER SHARES OF BANCASSURANCE PARTNERSHIPS % of organisations offering product, and operating models used 100% 80% 60% 40% legend trick Undisclosed Other External broker JV underwriter Captive underwriter Multiple external underwriters Weighted Weighted provider provider share share of of partnerships, %% Crawford & Company, 2.3% Länsförsäkringar, 5.0% SEB Pension och Försäkring, 5.0% Handelsbanken Liv, 8.2% Lloyd's of London, 2.3% other, 6.1% AXA Partners, 39.2% 20% External underwriter 0% Product offered Operating model (see legend) Swedbank Försäkring, 13.5% Source: Finaccord Creditor and Lifestyle Protection Insurance in Europe PartnerBASE Cardif Nordic, 18.4% Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 12
What are some of the key findings? (cont.) 3. Dominated in value terms by mortgage-related policies, the market for creditor insurance in France has continued to grow at a steady pace in recent years and is forecast to carry on doing so Gross premiums written (EUR billion) 12.5 10.0 7.5 5.0 2.5 Series5 Policies related to bill payments Series4 Policies related to credit cards Series3 Policies related to other consumer finance Series2 Policies related to point-of-sale automotive finance Series1 Policies related to mortgages 0.0 2012 2016 2020 Source: Finaccord Creditor and Lifestyle Protection Insurance in Europe Model Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 13
What are some of the key findings? (cont.) 4. Key findings from the executive summary of the report include: the value of the market for creditor and lifestyle protection insurance across the 20 countries investigated in Europe is likely to have been around EUR 40.9 billion in terms of gross premiums written in 2017; at EUR 9.4 billion in 2017, France is the largest of the 20 markets considered, accounting for around 23.0% of the total, followed by Germany with premiums of around EUR 6.7 billion; as for the split by type of cover, Finaccord estimates a breakdown of the market between EUR 30.0 billion attributable to cover for death, permanent disability and critical illness, and EUR 10.9 billion due to cover for temporary incapacity and unemployment by 2020, Finaccord predicts that gross written premiums for all forms of creditor and lifestyle protection insurance across the 20 countries will have increased to around EUR 45.4 billion, equivalent to a nominal compound annual growth rate of 3.6%; however, in addition to the on-going possibility of regulatory intervention in certain countries, a comparatively new threat to creditor insurance is apparent in the shape of a new generation of online lending institutions deploying the latest technologies (i.e. fintech ) to reach and serve borrowers as these lenders do not normally intermediate creditor insurance, this means that cross-selling opportunities could reduce if borrowers migrate in substantial numbers to them. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 14
What is the price? Reports in this series are available as standard PDF documents. The PartnerBASE datasets and market data files that accompany them at no further charge are in Excel format. Prices for these reports are as follows: CREDITOR (AND LIFESTYLE PROTECTION) INSURANCE IN... Argentina USD 895 Greece USD 895 Portugal USD 1,195 Asia-Pacific Region USD 4,195 Hong Kong USD 895 Romania USD 1,195 Austria USD 1,195 India USD 895 Russia USD 1,395 Belgium USD 1,195 Indonesia USD 895 Slovakia USD 1,195 Brazil USD 895 Italy USD 1,395 South Africa USD 895 Canada USD 1,395 Japan USD 895 South Korea USD 895 Chile USD 895 Latin America USD 2,795 Spain USD 1,395 China USD 895 Malaysia USD 895 Sweden USD 1,195 Colombia USD 895 Mexico USD 895 Switzerland USD 1,195 Czech Republic USD 1,195 Netherlands USD 1,195 Thailand USD 895 Denmark USD 1,195 Norway USD 1,195 Turkey USD 1,195 Europe USD 8,395 Peru USD 895 UK USD 895 France USD 1,395 Philippines USD 895 Vietnam USD 895 Germany USD 1,395 Poland USD 1,195 For Singapore-based clients, GST at the prevailing rate will be added to the basic price. Costs quoted are for a single site user licence only. For a corporate user licence, please see the next slide for further details. Invoices can be paid in EUR or GBP, at the prevailing exchange rate, if preferred. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 15
How can the research be purchased? Simple. Just go to the relevant area of the Finaccord website, create your account (if you do not have one already) and place your order online. Products paid for online by card will be delivered immediately by e-mail but please allow up to one working day for delivery by e-mail if you choose to pay on receipt of invoice. With regards to the corporate user licence, you will be asked to choose one of the following options: 1. One office, one country: no supplement over and above basic cost of reports ordered 2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered 3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered 4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered Alternatively, you can place an order by sending your request to order@finaccord.com, clearly stating the product(s) required, associated price(s) and billing details for eventual invoice or card payment receipt. Finaccord, 2018 Web: www.finaccord.com. E-mail: info@finaccord.com 16