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Creditor Insurance in Portugal

  • April 2014
  • -
  • Finaccord
  • -
  • 23 pages

Finaccord’s report titled Creditor Insurance in Portugal 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 Portugal. Drawing on the results of a survey of 42 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 60 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 Portugal.

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 Portugal 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 Portugal?

- 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 Portugal.

Table Of Contents

Creditor Insurance in Portugal
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 Portugal

Rationale

The report tracks over 60 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

Banking sector consolidation has tended to focus on small and medium-sized entities

Consumer lending market size and growth

Mortgage lending

Mortgage balances outstanding have been drifting back since reaching a peak in 2010...

Non-mortgage lending

…and non-mortgage consumer lending has retreated even more quickly in recent years

Credit and other pay later cards

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

Creditor insurance provision rates, operating models and partnerships

Creditor insurance linked to mortgages

Captive underwriters are used most frequently for mortgage-related creditor insurance...

... although the major competitor of this type may not remain a captive for much longer

Ocidental Seguros is one of two underwriters still classifiable as a joint venture...

... as a consequence of Credit Agricole's sale of its stake in BES Vida...

... the other being that of Barclays and CNP Assurances, which is also active in Spain

Allianz is the most prominent external underwriter in this field by weighted partnership share

Creditor insurance linked to consumer finance

Many partnerships for this form of creditor insurance are the same as those for mortgage-related policies...

... although there are also many distribution relationships specific to consumer finance products

Creditor insurance linked to credit cards

Credit card payment protection insurance is quite commonly marketed by card issuers in Portugal

BES Vida claims the highest weighted share of partnerships in this field...

... which is also characterised by regular use of captive underwrtiers

As well as its captive relationship, Eurovida is also utilised by three unrelated card issuers

Creditor insurance risk coverage

The vast majority of policies include the option to cover temporary incapacity and unemployment

Alternative distribution channels

Creditor insurance is also available from other sources apart from lending institutions...

… including several major insurance companies and a handful of brokers

Creditor insurance market size, growth and forecast

The creditor insurance market is contracting and is likely to continue falling in value...

…with mortgage-related policies performing better than other types of creditor insurance




LIST OF GRAPHICS / TABLES


TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

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

1.0 INTRODUCTION

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

2.0 MARKET ANALYSIS

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

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

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

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

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

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

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

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

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

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

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

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