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  4. > Creditor Insurance in Belgium

Creditor Insurance in Belgium

  • April 2014
  • -
  • Finaccord
  • -
  • 25 pages

Finaccord’s report titled Creditor Insurance in Belgium offers uniquely detailed insights into the market for creditor insurance, sometimes also referred to as payment protection insurance or loan-related insurance, as acquired by individual borrowers in Belgium. Drawing on the results of a survey of 46 lending institutions, the study analyses the distribution of creditor insurance by banks and other lending institutions, how provision rates vary for different lending products, operating models used for arranging creditor insurance, and distribution partnerships weighted by the size of distributors. The PartnerBASE™ dataset that accompanies the report details each of over 70 creditor insurance distribution deals traced by Finaccord. In short, this study will provide you with the definitive guide to current and future opportunities in creditor insurance in Belgium.

Key features of this study and the PartnerBASE™ dataset and market data annexe that accompany it include:

- quantification of creditor insurance market size and growth with a timeline from 2009 to 2013 and onwards to 2017: how much is this market really worth in Belgium and what is its future development potential?

- segmentation of this market both by underlying loan type (differentiating between mortgages, point-of-sale automotive finance, other consumer finance and credit card loans) and by type of cover (differentiating between cover for death / permanent disability and temporary incapacity / unemployment);

- consideration of operating models used for creditor insurance: how advanced is the use of captive and joint venture underwriters by lending institutions in Belgium?

- calculation of weighted provider share of partnerships: Finaccord’s unique quantitative analysis helps to identify which underwriters of creditor insurance hold the relationships that offer the most potential;

- investigation into alternative distribution channels for selling creditor insurance: a number of factors could increase the potential for entities other than the lending institutions themselves to sell creditor insurance in Belgium.

Table Of Contents

Creditor Insurance in Belgium
Table of Contents

Executive Summary

Introduction

Market Analysis

List of Graphics / Tables



0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

This report provides a comprehensive analysis of loan-related insurance policies in Belgium

Rationale

The report tracks 79 separate initiatives for marketing creditor insurance through lending institutions

Methodology

Survey of banks and other lending institutions

Market data

Definitions

Creditor insurance

Mortgages, consumer finance and credit cards

Weighted provider share of partnerships

Operating models

Abbreviations and exchange rates

PartnerBASEâ„¢ and market data annexe

Finaccord



2.0 MARKET ANALYSIS

Banks and other lending institutions covered

Introduction to the banking sector

BNP Paribas is the owner (or co-owner) of several consumer-facing banking entities in Belgium...

... in a market that has seen some important structural changes in recent years...

... such as the acquisition of Citibank Belgium by Credit Mutuel

Further changes to ownership structure seem likely to occur in future

Consumer lending market size and growth

Mortgage lending

Belgium's residential mortgage lending market continues to expand at a fairly healthy rate...

Non-mortgage lending

... although the value of total non-mortgage consumer lending has decreased in real terms

Credit and other pay later cards

The number of credit cards in circulation edged up in both 2012 and 2013

Creditor insurance provision rates, operating models and partnerships

Creditor insurance linked to mortgages

Most mortgage lending institutions have an arrangement for selling related creditor insurance...

… with AG Insurance emerging as the provider with the highest weighted share of partnerships...

... followed by Belfius Insurance, KBC Assurances, ING Life Belgium and Argenta Assurances

Even the most prominent external underwriter is limited to a relatively low weighted share of partnerships

Creditor insurance linked to consumer finance

Most providers of consumer finance are also distributors of associated creditor insurance...

... with many adhering to the same approach as that used for mortgage-related policies

Cardif has built up a total of as many as 14 different partnerships in this arena...

... in a market in which there is no shortage of competing underwriters

Creditor insurance linked to credit cards

Credit card payment protection insurance is commonly marketed by card issuers in Belgium

Captive and joint venture underwriters are also prevalent in this field...

…albeit a few card issuers maintain insurance programs with external underwriters

Creditor insurance risk coverage

Quite a lot of policies in Belgium are only designed to provide cover in the event of death

Alternative distribution channels

Borrowers can also choose to acquire creditor cover directly from underwriters…

…or from insurance or mortgage brokers

Creditor insurance market size, growth and forecast

Mortgage-related creditor insurance accounts for close to 80% of the total market...

... which is forecast to grow at a nominal compound annual rate of 5.5% up to 2017




LIST OF GRAPHICS / TABLES


TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

Creditor insurance gross written premiums in Belgium, segmented by policy and cover type, 2009, 2013 and 2017

1.0 INTRODUCTION

Banks and other lending institutions in Belgium contacted by Finaccord, segmented by type

2.0 MARKET ANALYSIS

Residential mortgage lending balances outstanding in Belgium (absolute and per capita), 2009 to 2013

Consumer non-mortgage lending balances outstanding in Belgium (absolute and per capita), 2009 to 2013

Credit and other pay later cards issued and per capita in Belgium, 2009 to 2013

Key data points for the consumer lending market in Belgium, 2009 to 2013

Provision of creditor insurance linked to mortgages in Belgium, 2014: provision rate, operating models and weighted provider share of partnerships

Provision of creditor insurance linked to consumer finance in Belgium, 2014: provision rate, operating models and weighted provider share of partnerships

Provision of creditor insurance linked to credit cards in Belgium, 2014: provision rate, operating models and weighted provider share of partnerships

Risk coverage of creditor insurance policies in Belgium, segmented by type of underlying product, 2014

Creditor insurance gross written premiums in Belgium, segmented by policy type, 2009, 2013 and 2017

Creditor insurance gross written premiums in Belgium, segmented by cover type, 2009, 2013 and 2017

Creditor insurance gross written premiums in Belgium, segmented by policy and cover type, 2009, 2013 and 2017

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