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Creditor Insurance in France

  • April 2014
  • -
  • Finaccord
  • -
  • 29 pages

Finaccord’s report titled Creditor Insurance in France 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 France. Drawing on the results of a survey of 74 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 130 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 France.

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 France 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 France?

- 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, including regulatory intervention, could increase the potential for entities other than the lending institutions themselves to sell creditor insurance in France.

Table Of Contents

Creditor Insurance in France
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 France

Rationale

The report tracks 132 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

The French consumer banking sector is fairly concentrated…

…and all major banking groups have set up captive insurance providers

Consumer lending market size and growth

Mortgage lending

Mortgage balances outstanding continue to increase steadily in both nominal and real terms…

Non-mortgage lending

…although the value of total non-mortgage consumer lending has fallen back in recent years

Credit and other pay later cards

The number of credit cards in circulation increased slightly in both 2012 and 2013

Creditor insurance provision rates, operating models and partnerships

Creditor insurance linked to mortgages

The vast majority of mortgage borrowers take out mortgage-related life cover as a minimum

CNP Assurances is easily the most visible provider in terms of weighted share of partnerships

…although the partnership with Groupe BPCE is subject to change from 2016 onwards

... with ACM and Cardif the next most significant competitors

Both Credit Agricole and Groupe BPCE use a hybrid model in this arena

As well as CNP Assurances, external providers include AXA, QUATREM and Swiss Life

Creditor insurance linked to consumer finance

Virtually all providers of consumer finance offer a related creditor insurance policy

CNP Assurances and Sogecap are likely to be market leaders in this arena...

... although Cardif has the highest number of distribution agreements in place…

…in another market which is largely dominated by captive underwriters

In total, approaching 30 legally distinct underwriting entities are active in this arena

Creditor insurance linked to credit cards

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

CNP Assurances again claims the highest weighted share of partnerships in this field...

…and partnerships are mainly similar to those for creditor insurance linked to consumer finance

Only five credit card issuers lack an arrangement in this field

Creditor insurance risk coverage

Cover for death and permanent disability is universal across all types of creditor policy

Performance of key bancassurance underwriters

CNP Assurances underwrites over EUR 2.5 billion of creditor insurance premiums in France...

... in a market in which various attempts have been made by regulators to increase competition...

... with further legislation potentially on its way

Alternative distribution channels

Creditor insurance is available from numerous sources apart from lending institutions...

... including major generalist and specialist underwriters...

... plus both long-established financial intermediaries, such as APRIL, and newer comparison websites

However, lending institutions remain the single most important distribution channel for this policy type

Creditor insurance market size, growth and forecast

Growth in mortgage-related creditor insurance premiums is most robust

Statistics exist to help quantify the market for creditor insurance in France




LIST OF GRAPHICS / TABLES


TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

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

1.0 INTRODUCTION

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

2.0 MARKET ANALYSIS

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

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

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

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

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

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

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

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

Premiums written in total creditor insurance by key bancassurance underwriters in France, 2012

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

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

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

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