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Finaccord’s report titled Manufacturer-Branded and Dealer-Intermediated Motor Insurance and Road Assistance in the Asia-Pacific Region amalgamates comprehensive and in-depth research covering ten countries, namely: China, India, Indonesia, Japan, Malaysia, the Philippines, South Korea, Taiwan, Thailand and Vietnam.

Based on a survey of 680 dealers in these countries and an investigation typically covering around 30 manufacturer brands in each territory (although as many as 76 in China), the study delivers unique insights into the market for cross-selling or packaging motor insurance and road assistance in conjunction with sales of new and used passenger cars bought by consumers through the automotive trade distribution channel.

The research also generates data describing the value of the markets for motor insurance and road assistance captured by the automotive trade in each country in terms of both new and on-going policies.

In addition to this unique market data, the survey results measure the extent to which automotive dealers and manufacturer brands actually intermediate motor insurance and road assistance in each country, and can be used to calculate average customer take-up rates at the point of sale, and to understand relationships between manufacturers or importers and external motor insurance and road assistance providers for branded or endorsed programs.

Table Of Contents

Manufacturer-Branded and Dealer-Intermediated Motor Insurance and Road Assistance in the Asia-Pacific Region
0.0 EXECUTIVE SUMMARY 1
New car sales have been rising rapidly across much of the Asia-Pacific region 2
Over USD 34 billion of gross written premiums for motor insurance are sold by the automotive trade. 2
.which makes up more than 40% of all personal motor insurance premiums across the Asia-Pacific region 3
Motor insurance is a core financial product to distribute for most car dealers and manufacturer brands 4
The three leading motor insurers distributing through the automotive trade are all Chinese ones. 5
.while Tokio Marine is the leading non-Chinese underwriter in this sector 6
Road assistance cover distributed by the automotive trade exceeds USD 1 billion in value. 7
. and is a service that is widely available through both dealers and manufacturer brands in most countries 8
Road assistance is frequently packaged with motor insurance in most countries. 9
. although is sold as a stand-alone policy by the majority of car dealers in Japan. 9
.making JAF one of the leaders for road assistance in the Asia-Pacific region 10
Allianz Global Assistance, 24TMS and TVS Automobile Solutions are other leading independent providers 11
1.0 INTRODUCTION 12
What is this report about? 12
The focus of the report is on motor insurance and road assistance distributed by the automotive trade 12
Rationale 12
The provision of financial services is essential to support both car sales and profitability 12
This report offers a unique analysis of the subject in the Asia-Pacific region based on primary research. 12
Methodology 12
Survey of dealers and manufacturers 12
Market data 16
Computation of market data is based on a variety of inputs including the results of the dealer survey 16
External sources 16
Definitions 17
Motor insurance and road assistance 17
Operating models 17
Tied and non-tied providers 18
Abbreviations 18
Exchange rates 18
Graphical analyses 18
PartnerBASE and market data annexe 19
Finaccord 19
2.0 REGIONAL OVERVIEW 21
Passenger vehicle data 21
Car parc 21
There are more than 200 million passenger cars registered in the Asia-Pacific region. 21
.and two thirds of the growth recorded since 2009 has come from China alone 21
New car sales to individuals 22
New car sales rose by a compound annual rate of more than 10% between 2009 and 2013. 22
.with the fastest growth rates recorded in Indonesia and Thailand 22
New car sales in China have been fundamental to growth in the wider Asia-Pacific region 23
Used car sales 25
Japan hosts the largest used car market in the region. 25
.followed by China, India, South Korea and Indonesia 25
Sales by manufacturer groups 28
MANUFACTURER-BRANDED AND DEALER-INTERMEDIATED MOTOR INSURANCE AND ROAD ASSISTANCE IN THE ASIAPACIFIC
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© FINACCORD (2/2015) ii
Across the ten countries Toyota group is the leading manufacturer group… 28
.with five joint ventures based in China featuring in the top ten 28
Motor insurance 31
Survey of automotive dealers 31
Motor insurance is on offer from all car dealers in four of the ten countries surveyed 31
On average, dealers in Taiwan work with the largest number of tied motor insurance providers. 32
.while those in India and Vietnam are most likely to use both tied and non-tied providers 33
Where offered, take-up rates for motor insurance acquired with new cars exceed 90% in five countries. 35
.with dealers reporting a take-up rate below 30% in just two countries 35
Used car buyers are less likely to take out motor insurance at dealerships except in Japan and South Korea 36
Types of motor insurance policy sold by dealers 39
Motor insurance is available in several variants in the Asia-Pacific region. 39
.although dealers in India and Japan only sell comprehensive insurance 39
Manufacturer brand survey results 41
All manufacturer brands in India have an arrangement for motor insurance 41
As a weighted figure, penetration is lowest among manufacturer brands in the Philippines. 41
. which highlights a potential opportunity for development 42
Over half of all manufacturer brands work with more than one external underwriter. 43
.and captive underwriters play a role in China, Indonesia and the Philippines 43
Leading brands in India, South Korea and Thailand have captive or joint venture brokers 43
Market size 46
Nearly 90% of motor insurance premiums sold through the automotive trade can be attributed to new cars. 46
.and China dominates by this market by value 46
Malaysia, Taiwan and Thailand all have markets worth in excess of USD 500 million 46
The automotive trade originates more than 70% of motor insurance in four countries. 49
.with a high point of 76% in Vietnam 49
Competitor dynamics 51
The top 15 motor insurance providers together claim a weighted share of partnerships in excess of 75%. 51
.and 11 of these operate solely in China 51
Three Japanese underwriters and a single European one make up the rest 51
Road assistance 53
Survey of automotive dealers 53
Road assistance is provided automatically with the vast majority of cars sold through dealers 53
Dealers sometimes work with multiple providers of road assistance. 54
.though most of these are tied to manufacturer brands (or their importers) 55
Use of non-tied providers is most prevalent in Japan and the Philippines. 56
. with new car buyers in the former country often buying stand-alone policies 58
As an average across the region, under 60% of all used cars come with road assistance 59
Sources of road assistance distributed by dealers 62
Road assistance can be acquired in several ways in addition to via factory warranties. 62
.most notably as an embedded feature of motor insurance 62
Availability of road assistance via an annual service is most widespread in Malaysia 62
Manufacturer brand survey results 63
Over 90% of manufacturer brands in the Asia-Pacific region have a scheme for road assistance 63
.though the exceptions include major brands in Japan and the Philippines 63
Internal management constitutes the most common operating model among manufacturer brands 65
Market size 67
The combined value of the market for road assistance sold via the automotive trade exceeds USD 1 billion 67
.with over a half of this value concentrated in China 67
Competitor dynamics 70
JAF is likely to be the regional leader even though it is only active in Japan. 70
.while Allianz Global Assistance, ranked second, is present in four countries 70
Taiwan's 24TMS and India's TVS Automobile Solutions also feature in the regional top ten 71
MANUFACTURER-BRANDED AND DEALER-INTERMEDIATED MOTOR INSURANCE AND ROAD ASSISTANCE IN THE ASIAPACIFIC
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© FINACCORD (2/2015) iii
3.0 CHINA 73
Introduction 73
Passenger vehicle data 73
Sales of used cars have grown faster than new car sales between 2009 and 2013 73
Joint venture brands and groups are the leading players in the automotive market 75
Survey of automotive dealers and manufacturer brands 75
Dealer survey results - motor insurance 75
Various types of products can be purchased from the dealers reported selling motor insurance… 75
Allianz was the only foreign insurance company mentioned by dealers 76
Manufacturer brand survey results - motor insurance 78
Anbang Insurance has the largest weighted share of partnerships among manufacturer brands 78
Combined analysis of results - motor insurance 80
Ping An and PICC are likely to be the leading point-of-sale providers of motor insurance 80
Dealer survey results - road assistance 80
Generally, road assistance was provided automatically to buyers of new cars in China 80
Non-tied road assistance services are provided by dealers themselves. 81
Manufacturer brand survey results - road assistance 82
Allianz Global Assistance has established several important partnerships with manufacturer brands 82
Market value 84
Motor insurance market value and segmentation 84
Road assistance market value and segmentation 85
4.0 INDIA 86
Introduction 86
Passenger vehicle data 86
Sales of new cars in India have exceeded 2.5 million for the past four years. 86
.but the growth of used car sales has been both more rapid and more consistent 86
Maruti Suzuki occupies a dominant position in the market for new passenger vehicles 88
Survey of automotive dealers and manufacturer brands 89
Dealer survey results - motor insurance 89
Dealers only market comprehensive insurance policies 89
Around two thirds of dealers use non-tied partners for motor insurance. 90
.of which there are nearly 20 competing underwriters 90
Manufacturer brand survey results - motor insurance 92
Manufacturer brands' partnerships for motor insurance are shared between 15 underwriters. 92
six of which collaborate with Maruti Suzuki. 92
Combined analysis of results - motor insurance 94
A combined analysis points to ICICI Lombard and Bajaj Allianz as the leading point-of-sale providers 94
Dealer survey results - road assistance 95
Road assistance is rarely bundled with products other than factory and extended warranties 95
Road assistance is available in one form or another from the vast majority of car dealers in India 96
Manufacturer brand survey results - road assistance 97
Allianz Global Assistance and MyTVS are likely to be the leading independent providers 97
Market value 99
Motor insurance market value and segmentation 99
Road assistance market value and segmentation 100
5.0 INDONESIA 101
Introduction 101
Passenger vehicle data 101
Sales of new cars in Indonesia more than doubled between 2009 and 2013. 101
. with used car sales also advancing at a healthy rate over the same period 101
MANUFACTURER-BRANDED AND DEALER-INTERMEDIATED MOTOR INSURANCE AND ROAD ASSISTANCE IN THE ASIAPACIFIC
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© FINACCORD (2/2015) iv
Japanese manufacturers dominate the Indonesian market for new vehicle sales 103
Survey of automotive dealers and manufacturer brands 104
Dealer survey results - motor insurance 104
Dealers sell several types of motor insurance since finance providers insist that borrowers are insured 104
There is fierce competition to sell motor insurance through car dealers in Indonesia. 105
. with a total of more than 30 underwriters active in this channel 105
Manufacturer brand survey results - motor insurance 107
In contrast, manufacturer brands' partnerships are dominated by one company, namely Astra Buana 107
Combined analysis of results - motor insurance 109
Astra Buana is therefore the likely market leader for point-of-sale motor insurance on a combined analysis 109
Dealer survey results - road assistance 110
Road assistance is widely available through motor insurance in Indonesia 110
Dealers mostly use manufacturer schemes, motor insurers or their own resources to offer road assistance. 111
Manufacturer brand survey results - road assistance 113
AstraWorld is the leading partner for manufacturers 113
Market value 115
Motor insurance market value and segmentation 115
Road assistance market value and segmentation 116
6.0 JAPAN 117
Introduction 117
Passenger vehicle data 117
Sales of new cars outgrew used car sales between 2009 and 2013 117
Japanese brands and groups dominate the market for new car sales 119
Survey of automotive dealers and manufacturer brands 119
Dealer survey results - motor insurance 119
All motor insurance policies sold through dealers include both liability and other types of cover 119
The Japanese market for dealer-intermediated motor insurance is fairly concentrated 120
Manufacturer brand survey results - motor insurance 122
The main non-tied providers are also the leading tied partners for motor insurance 122
Combined analysis of results - motor insurance 124
Tokio Marine emerges as the market leader when looking across dealers and manufacturer brands together 124
Dealer survey results - road assistance 124
The normal arrangement is for dealers to make road assistance available as a stand-alone product. 124
. and it is rarely packaged automatically with manufacturer brand factory warranties 125
As a non-tied provider, JAF enjoys a near-monopoly position among Japanese car dealers 126
Manufacturer brand survey results - road assistance 128
Most manufacturer brands have an arrangement of one sort or another for road assistance. 128
. although JAF and JRS are the only named external partners 128
Market value 130
Motor insurance market value and segmentation 130
Road assistance market value and segmentation 131
7.0 MALAYSIA 132
Introduction 132
Passenger vehicle data 132
Sales of new cars in Malaysia rose by nearly 20% between 2009 and 2013. 132
.but dealers' sales of used cars have been more volatile 132
Malaysia's domestic manufacturer brands hold over a half of all new car sales 134
Survey of automotive dealers and manufacturer brands 135
Dealer survey results - motor insurance 135
Most dealers sell both comprehensive standard insurance and Islamic insurance 135
MANUFACTURER-BRANDED AND DEALER-INTERMEDIATED MOTOR INSURANCE AND ROAD ASSISTANCE IN THE ASIAPACIFIC
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© FINACCORD (2/2015) v
Nearly 30% of dealers use non-tied partners for motor insurance 136
Manufacturer brand survey results - motor insurance 138
Manufacturer brands' partnerships are shared between as many as 20 underwriters 138
Perodua and Proton both offer dealers a wide choice of insurance partners 138
Combined analysis of results - motor insurance 140
A combined analysis points to Etiqa as a likely market leader for point-of-sale motor insurance 140
Dealer survey results - road assistance 141
Road assistance is widely available with motor insurance in Malaysia 141
The DMM Sales chain of dealerships has set up its own road assistance service. 142
Manufacturer brand survey results - road assistance 143
Asia Assistance Network holds the most important external partnership with a manufacturer brand 143
Market value 145
Motor insurance market value and segmentation 145
Road assistance market value and segmentation 146
8.0 PHILIPPINES 147
Introduction 147
Passenger vehicle data 147
Sales of new cars in the Philippines exceeded 60,000 for the first time in 2013. 147
.and used car sales have been growing even faster 147
Toyota and Mitsubishi hold over half of the new passenger vehicle market between them 149
Survey of automotive dealers and manufacturer brands 150
Dealer survey results - motor insurance 150
Dealers sell both liability-only and comprehensive motor insurance 150
The vast majority of dealers use non-tied partners only for motor insurance. 151
. and these are led

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