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Creditor Insurance in Germany

  • June 2014
  • -
  • Finaccord
  • -
  • 27 pages

Finaccord’s report titled Creditor Insurance in Germany 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 Germany. Drawing on the results of a survey of 125 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 200 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 Germany.

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 Germany 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 Germany?

- 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 Germany.

Table Of Contents

Creditor Insurance in Germany
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 Germany

Rationale

The report tracks over 200 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 German banking market can be divided into three main categories...

... namely, private sector banks...

... plus public sector and co-operative banks

Taken as a whole, the co-operative banks possess the most retail branches in Germany

Consumer lending market size and growth

Mortgage lending

Mortgage balances outstanding increased gently between 2009 and 2013…

Non-mortgage lending

… while the value of total non-mortgage consumer lending diminished slightly

Credit and other pay later cards

The number of credit cards in circulation is set to break the 30 million barrier in 2014

Creditor insurance provision rates, operating models and partnerships

Creditor insurance linked to mortgages

Mortgage-related creditor insurance in Germany in normally sourced from external underwriters

PB Lebensversicherung and Allianz benefit from important strategic partnerships in this arena

R+V is utilised by the majority of co-operative banks

Zurich has extended its distribution relationship with Deutsche Bank in Germany through to 2022

Provinzial is the public sector insurer used most frequently by savings banks

In total, there are around 30 product providers active in this segment of German creditor insurance

Creditor insurance linked to consumer finance

Out of 113 providers of consumer finance, 108 have an arrangement for related creditor insurance

Many partnerships in this sphere are identical to those for mortgage-related creditor insurance...

...albeit Cardif has a much stronger position in this field

Credit Life International has made some changes to its approach to the German market

ProTect is a specialised underwriter for unemployment cover to the saving banks

Distribution relationships held by ERGO and Talanx (via TARGO Versicherung) are also strategic

Seven institutions employ a captive underwriter for loan payment protection insurance

Creditor insurance linked to credit cards

Relatively few credit card issuers have an arrangement for related payment protection insurance

Creditor insurance risk coverage

Mortgage-related creditor insurance in often configured as a risk life policy including critical illness

Alternative distribution channels

Creditor insurance can also be acquired directly through a number of insurance companies...

...with several insurance brokers also active in this arena

Consumer research shows that mortgage-related policies are often bought via alternative channels

Creditor insurance market size, growth and forecast

Policies linked to mortgages account for the majority of the market value...

...and are also expected to deliver the strongest growth up to 2017




LIST OF GRAPHICS / TABLES


0.0 EXECUTIVE SUMMARY

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

1.0 INTRODUCTION

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

2.0 MARKET ANALYSIS

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

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

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

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

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

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

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

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

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

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

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

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