TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY INTRODUCTION... 3 What is this report about?... 3

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1 TABLE OF CONTENTS 0.0 EXECUTIVE SUMMARY INTRODUCTION... 3 What is this report about?... 3 Distribution partnerships with banks and other lending institutions constitute the focus of this report... 3 Rationale... 3 Across Europe, over 80% of banking entities surveyed are active in this arena to one extent or another... 3 Methodology... 4 Survey of banks and other lending institutions... 4 Market data... 4 Definitions... 6 Investment-related life insurance... 6 Retirement savings... 6 Risk life insurance... 6 Critical illness insurance... 6 Income protection insurance... 7 Accident insurance... 7 Health / hospital cash plans... 7 Medical expenses insurance... 7 Personal motor insurance... 7 Household insurance... 7 Creditor insurance... 8 Mortgages, consumer finance and credit cards... 8 Weighted provider share of partnerships... 8 Operating models... 9 Abbreviations and exchange rates Finaccord MARKET ANALYSIS Banks and other lending institutions covered Introduction to the banking sector The Czech banking sector has remained stable during and in the aftermath of recent financial crises albeit the rate of foreign ownership could lead to significant restructuring Investment-related life insurance and retirement savings Insurance market size and growth Rapidly increasing demand for unit-linked insurance has buoyed the Czech life insurance sector Distribution share of banks Bancassurance provision rates, operating models and partnerships Investment-related life insurance A half of the 32 banks and other lending institutions researched offer investment-related life insurance Product providers include external underwriters, captive underwriters and a single joint venture Aviva possesses an important relationship with UniCredit Bank in this field Banking entities not selling investment-related life insurance are mainly specialised lending institutions Two major relationships are determined by international bancassurance agreements Retirement savings Captive pension funds belonging to the two largest banks are most prominent in this market FINACCORD (11/2011) I

2 ...albeit AXA has established useful partnerships for retirement savings with four entities Performance of key bancassurance underwriters Among bancassurers, Komerční pojišťovna has grown most rapidly in total life insurance Protection-related life insurance Insurance market size and growth The market for protection-related life insurance has enjoyed relatively strong growth in recent years Distribution share of banks Bancassurance provision rates, operating models and partnerships Risk life, critical illness and income protection insurance No Czech banks whatsoever distribute protection-related life insurance Performance of key bancassurance underwriters Accident and health insurance Insurance market size and growth The value of health insurance is likely to overtake that of accident insurance during Distribution share of banks Bancassurance provision rates, operating models and partnerships Accident insurance Accident insurance is marketed by over a third of banking institutions researched in the Czech Republic with a variety of different operating models in evidence banking entities have no apparent scheme in place for accident insurance Medical expenses insurance and health / hospital cash plans Health insurance policies have not been introduced yet as bancassurance products in the Czech Republic Performance of key bancassurance underwriters Underwriters with a focus on bancassurance moved up in total non-life insurance between 2006 and The growth of bancassurance is also evident in an analysis of total non-motor, non-life insurance Personal motor and household insurance Insurance market size and growth As in most countries, household insurance is growing much faster than personal motor insurance Distribution share of banks Bancassurance provision rates, operating models and partnerships Personal motor insurance Most of the larger banks have elected not to distribute personal motor insurance although Komerční Banka does, which is to the benefit of its partner, Česká pojišťovna Three captive brokers and one captive underwriter are active in this bancassurance sector Household insurance All larger banks and mortgage lenders in the Czech Republic have an arrangement for household cover Kooperativa is used in this context by Česká Spořitelna and two other networks Allianz benefits from distribution partnerships in this arena with four banking entities Performance of key bancassurance underwriters Only two bank-owned underwriters are active in motor insurance Creditor insurance Consumer lending market size and growth Mortgage lending Mortgage lending balances per capita doubled between 2006 and 2010 although they remain low Non-mortgage lending Strong growth was also recorded in the non-mortgage lending sector Credit and other pay later cards The number of credit and other pay later cards has fallen sharply relative to the high point of Creditor insurance provision rates, operating models and partnerships Creditor insurance linked to mortgages Mortgage-related creditor insurance is available from all mortgage lending institutions Pojišťovnou České Spořitelny, an external underwriter, is the market leader although many of the other most prominent providers are captive entities and Victoria Volksbanken is classifiable as a joint venture FINACCORD (11/2011) II

3 Creditor insurance linked to consumer finance The leading four providers are as dominant in this field as they are for mortgage-related policies BNP Paribas Cardif has established several partnerships that are specific to consumer finance and several other relationships are in evidence that are relevant only to this field Creditor insurance linked to credit cards Five underwriters are active in creditor insurance related to credit cards among which BNP Paribas Cardif lays claim to the most partnerships Creditor insurance risk coverage All creditor insurance policies identified in the Czech Republic cover the risk of death Alternative distribution channels Simply, a mortgage broker, offers mortgage-related life insurance Creditor insurance market size, growth and forecast Up to 2015, growth is expected to be strongest for mortgage-related creditor insurance FINACCORD (11/2011) III

4 LIST OF GRAPHICS / TABLES 0.0 EXECUTIVE SUMMARY... 1 Overview of bancassurance provision rates for different types of insurance in the Czech Republic, INTRODUCTION... 3 Banks and other lending institutions in the Czech Republic contacted by Finaccord, segmented by type MARKET ANALYSIS Gross written premiums for investment-related life insurance and retirement savings in the Czech Republic, Gross written premiums for investment-related life insurance and retirement savings in the Czech Republic, (data) Bancassurance provision of investment-related life insurance in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Bancassurance provision of retirement savings in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Market share in total life insurance of key bancassurance underwriters in the Czech Republic, (data) Gross written premiums for protection-related life insurance in the Czech Republic, Gross written premiums for protection-related life insurance in the Czech Republic, (data) Gross written premiums for accident and health insurance in the Czech Republic, Gross written premiums for accident and health insurance in the Czech Republic, (data) Bancassurance provision of accident insurance in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Market share in total non-life insurance of key bancassurance underwriters in the Czech Republic, (data) Market share in total non-motor, non-life insurance of key bancassurance underwriters in the Czech Republic, (data) Gross written premiums for personal motor and household insurance in the Czech Republic, Gross written premiums for personal motor and household insurance in the Czech Republic, (data) Bancassurance provision of personal motor insurance in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Bancassurance provision of household insurance in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Market share in total motor insurance of key bancassurance underwriters in the Czech Republic, (data) Residential mortgage lending balances outstanding in the Czech Republic (absolute and per capita), Consumer non-mortgage lending balances outstanding in the Czech Republic (absolute and per capita), Credit and other pay later cards issued and per capita in the Czech Republic, Key data points for the consumer lending market in the Czech Republic, Provision of creditor insurance linked to mortgages in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Provision of creditor insurance linked to consumer finance in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Provision of creditor insurance linked to credit cards in the Czech Republic, 2011: provision rate, operating models and weighted provider share of partnerships Risk coverage of creditor insurance policies in the Czech Republic, segmented by type of underlying product, FINACCORD (11/2011) IV

5 Creditor insurance gross written premiums in the Czech Republic, segmented by policy type, 2007, 2011 and 2015 (forecast) Creditor insurance gross written premiums in the Czech Republic, segmented by cover type, 2007, 2011 and 2015 (forecast) Creditor insurance gross written premiums in the Czech Republic, segmented by policy and cover type, 2007, 2011 and 2015 (forecast) (data) FINACCORD (11/2011) V