Bancassurance Models Distribution Channels for Life Insurance: A Global Perspective Around the World 2nd Life Insurance Forum Amsterdam, April 9 th 10 th 2014 Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 1
Agenda Bancassurance as a major distribution channel for life insurance Consumer research: distribution of protection-related life insurance in Europe The global market for creditor / creditor life insurance Summary Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 2
1. Regulations Mediation laws Product regulation Factors that the shape countryspecific distribution landscapes 2. Market characteristics Maturity of the market Consumer behaviour Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 3
The importance of the bancassurance channel Estimated distribution share of bancassurance in total life insurance, 2012 / 2013 100% 80% 60% 40% 20% 0% Turkey Brazil Spain France S. Korea Russia Poland Germany UK Chile Japan Source: Finaccord Global Bancassurance reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 4
The importance of the bancassurance channel Segmentation of 125 retail banking groups between those with captive underwriters, those with joint venture underwriters and those with both captive and joint venture underwriters for life insurance, 2013 None, 39.2% Captive underwriter, 37.6% Captive underwriter + JV underwriter, 8.8% JV underwriter, 14.4% Source: Finaccord Global Bancassurance reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 5
The importance of the bancassurance channel Ranking of banking groups by value of premiums of captive and joint venture underwriters, 2012 Rank Group Premiums (USD billion) 1 Crédit Agricole 29.00 2 ING Group 26.07 3 BNP Paribas 25.47 4 Bradesco 21.13 5 Crédit Mutuel 15.17 6 Lloyds Banking Group 13.13 7 Société Générale 13.09 8 HSBC 13.04 9 NongHyup Bank 9.11 10 Intesa Sanpaolo 7.28 Total of above 172.49 Other retail banking groups in world's top 125 164.52 Source: Finaccord Global Bancassurance reports Grand total 337.01 Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 6
Consumer research: distribution of protection-related life insurance in Europe Survey of over 6,000 consumers in France, Germany, Italy, Poland, Spain and the UK in 2012 Five types of protection-related life insurance: risk life, critical illness, long-term income protection, short-term income protection and funeral expenses insurance Note that investment-related life insurance, retirement savings and creditor insurance not in scope here, hence weaker share of banks as distributors relative to total market Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 7
100% Distribution Channels for Life Insurance: A Global Perspective Consumer research: distribution channels used for protection-related life insurance Insurance company / agent Financial adviser or broker Supermarket or other retailer Insurance aggregator or comparison site Bank or similar institution Other 80% 60% 40% 20% 0% France Germany Italy Poland Spain UK Average Source: Finaccord Life Protection Metrics reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 8
Consumer research: distribution interfaces used for protection-related life insurance (1) Face - to - face Online Inbound telephone Outbound telephone Post t1 100% 80% 60% 40% 20% 0% France Germany Italy Poland Spain UK Average Source: Finaccord Life Protection Metrics reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 9
100% Distribution Channels for Life Insurance: A Global Perspective Consumer research: distribution interfaces used for protection-related life insurance (2) Online (laptop or desktop) Online (tablet) Online (mobile phone) 80% 60% 40% 20% 0% France Germany Italy Poland Spain UK Average Source: Finaccord Life Protection Metrics reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 10
The global market for creditor life insurance Size of the creditor life insurance market in Europe and Latin America, 2012 GWP estimate USD billion 40 37.73 30 20 10 4.78 0 Europe Latin America Source: Finaccord Global Creditor Insurance reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 11
The global market for creditor life insurance Creditor life insurance as percentage of total creditor insurance market, 2012 estimate 100% 80% 73.8% 79.0% 60% 40% 20% 0% Europe Latin America Source: Finaccord Global Creditor Insurance reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 12
The global market for creditor life insurance Creditor insurance market size compound annual growth rates, 2008 to 2012 Creditor life - Europe 4.1% Creditor non-life - Europe - 0.4% Creditor life - Latin America 18.8% Creditor non-life - Latin America 26.3% Source: Finaccord Global Creditor Insurance reports - 10% 0% 10% 20% 30% Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 13
The global market for creditor life insurance Creditor life insurance GWP as % of total protection-related life insurance GWP, 2012 / 2013 100% 95.5% 80% 74.5% 66.7% 60% 56.4% 47.0% 40% 34.0% 20% 21.5% 17.9% 0% Russia Poland Portugal Belgium Spain Brazil France Japan Source: Finaccord Global Creditor Insurance reports Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 14
Summary The importance of distribution channels for life insurance varies from country to country, although banks have prominent position in many market Creditor life insurance is one of the key lines to develop a well functioning life insurance markets in developing countries For protection-related life insurance products direct sales from insurance companies are still the most important channel with face-to-face being the most used interface Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 15
Any questions? Sources and related Finaccord publications: Global Bancassurance: Strategies of the World's Top 125 Retail Banking Groups Creditor Insurance in Europe Creditor Insurance in Latin America Life Bancassurance in the Asia-Pacific Region: Investment-Related Life Insurance and Retirement Savings Life Bancassurance in the Asia-Pacific Region: Protection-Related Life Insurance Life Bancassurance in Europe: Investment-Related Life Insurance and Retirement Savings Life Bancassurance in Europe: Protection-Related Life Insurance Life Bancassurance in Latin America: Protection-Related Life Insurance Bancassurance country reports (covering 30+ different countries in the Asia-Pacific region, Europe and Latin America) Creditor Metrics: Consumer Approaches to Payment Protection Insurance in Europe Life Protection Metrics: Consumer Approaches to Protection-Related Life Insurance in Europe Finaccord Ltd., 2014 Web: www.finaccord.com. E-mail: info@finaccord.com 16