Marktanalyse - Bancassurance in Belgium: Life, Non-Life and Creditor Insurance

Marktanalyse - 'Bancassurance in Belgium: Life, Non-Life and Creditor Insurance'

Finaccord’s report titled Bancassurance in Belgium: Life, Non-Life and Creditor Insurance is about the distribution of insurance products through banks and other lending institutions in Belgium. Types of insurance considered are: investment-related life insurance and retirement savings; risk life insurance, critical illness insurance and income protection insurance; accident insurance, medical expenses insurance and health / hospital cash plans; personal motor insurance and household insurance; and creditor insurance for mortgages, consumer finance and credit cards.

Based on a survey of 48 organisations, it identifies 165 bancassurance distribution initiatives across these types of insurance, and highlights the operating models and product providers used in the vast majority of cases. Moreover, it analyses these bancassurance agreements in terms of ‘weighted partnerships’ which take into account the size of the retail customer base of the banking institutions distributing these policies, thereby differentiating between the most important relationships and those that are comparatively minor.

In addition, with the exception of creditor insurance, for which historic, current and forecast market size data is provided for 2007, 2011 and 2015, the report also sizes the market for the various types of insurance investigated in terms of gross written premiums between 2006 and 2010, provides a general introduction to the banking sector, comments upon the general influence of the bank distribution channel for these types of insurance, and presents available data for key bancassurance underwriters, including captives, joint ventures and other dedicated bancassurance underwriters.

You may be able to use this report and the PartnerBASE™ dataset that accompanies it in one or more of the following ways:

- gain access to a source of information that provides a comprehensive overview of the provision of a range of personal insurance products by a majority of significant banking entities in Belgium;

- identify partnership opportunities for these types of insurance that may arise either because a banking institution is not currently active or because there is scope for replacing an existing initiative;

- understand which underwriters and other product providers have been successful in establishing distribution relationships with the most important banking entities in Belgium;

- assess the background to the most significant bancassurance deals, differentiating between those that originate from long-term or strategic objectives and those that are more transient;

- appreciate the magnitude of the opportunity to sell different types of life, non-life and creditor insurance through banks and other lending institutions in Belgium.

Inhaltsverzeichnis Marktanalyse - 'Bancassurance in Belgium: Life, Non-Life and Creditor Insurance'



TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY ... 1

1.0 INTRODUCTION 3

What is this report about? .. 3

Distribution partnerships with banks and other lending institutions constitute the focus of this report ... 3

Rationale 3

Across Europe, over 80% of banking entities surveyed are active in this arena to one extent or another 3

Methodology . 4

Survey of banks and other lending institutions . 4

Market data . 4

Definitions . 6

Investment-related life insurance .. 6

Retirement savings 6

Risk life insurance .. 6

Critical illness insurance . 6

Income protection insurance . 7

Accident insurance . 7

Health / hospital cash plans ... 7

Medical expenses insurance . 7

Personal motor insurance .. 7

Household insurance . 7

Creditor insurance .. 8

Mortgages, consumer finance and credit cards ... 8

Weighted provider share of partnerships .. 8

Operating models ... 9

Abbreviations and exchange rates .. 10

Finaccord 10

2.0 MARKET ANALYSIS ... 12

Banks and other lending institutions covered .. 12

Introduction to the banking sector .. 12

Structurally, Belgium’s banking and insurance sectors are very closely linked . 12

Dexia’s banking and insurance operations were nationalised in October 2011 12

Investment-related life insurance and retirement savings .. 14

Insurance market size and growth .. 14

Falling sales of individual unit-linked policies and capitalisation bonds cause the overall market to stagnate 14

Distribution share of banks .. 15

Banks are dominant in individual life insurance, especially for single premium contracts 15

Bancassurance provision rates, operating models and partnerships ... 16

Investment-related life insurance 16

All of Belgium’s mainstream retail banks offer investment-related life insurance... ... 16

…and around half of those do so in conjunction with a captive or joint venture provider . 16

The leading providers of investment-related life insurance include AG Insurance and ING…. 16

…and AXA operates with a number of external banking partners as well as with AXA Bank itself . 16

Many providers are active in this area, but several are limited to having just one distributor bank .. 17

Retirement savings .. 19

The provision of retirement savings is virtually identical to that of investment-related life cover… .. 19

…although three banks make use of different insurance providers for this type of cover… 19

…and Crédit Mutuel subsidiary BKCP partners with a mix of captive and external underwriters 19

Performance of key bancassurance underwriters .. 21

On a combined basis, the market share in total life insurance of key Belgian bancassurers has plateaued .. 21

Protection-related life insurance . 22

Insurance market size and growth .. 22

Growth in protection-related life insurance in Belgium derives primarily from group business. 22

Distribution share of banks .. 23

Bancassurance provision rates, operating models and partnerships ... 23

Risk life insurance 23

Around one quarter of relevant banking entities in Belgium offer this type of cover . 23

AG Insurance acts as a joint venture underwriter for two key distributors… . 23

…whereas many leading (and often captive) insurers maintain just one partnership .. 24

Critical illness insurance ... 26

Only one specialist bank is found to be offering this type of protection-related life cover… . 26

…and this instance may simply be the result of its clients’ particular insurance-related needs ... 26

Income protection insurance ... 28

All of the major Belgian retail banks offer stand-alone income protection policies… 28

…and distribution partnerships for this type of cover mirror those used for risk life insurance . 28

Performance of key bancassurance underwriters .. 30

Accident and health insurance 30

Insurance market size and growth .. 30

Health insurance expands quite strongly while accident insurance stagnates . 30

Distribution share of banks .. 32

The distribution share of banks in accident and health insurance has increased marginally ... 32

Bancassurance provision rates, operating models and partnerships ... 33

Accident insurance ... 33

Most ‘accident insurance’ in Belgium is, in fact, simply a form of third-party liability cover ... 33

KBC Assurances and AG Insurance dominate the weighted provider rankings… ... 33

…and external providers Mercator Verzekeringen and Vanbreda Risk & Benefits also feature .. 33

Medical expenses insurance ... 35

Less than a quarter of banking institutions distribute this this type of health insurance 35

Once again, this market is dominated by captive partners such as AG Insurance and KBC Assurances... ... 35

…but DKV and Fidea Assurances hold relationships with two Crédit Agricole subsidiaries 35

Health / hospital cash plans . 37

Cover is available from Ethias Bank and self-employed specialist Bank J. Van Breda & Co .. 37

Performance of key bancassurance underwriters .. 39

On a combined basis, the market share in total non-life insurance of key Belgian bancassurers is stable... .. 39

...although is somewhat lower for non-work accident insurance... 40

...and lower still for health insurance ... 41

Personal motor and household insurance 42

Insurance market size and growth .. 42

The market for household insurance is growing more rapidly than that for personal motor cover ... 42

Distribution share of banks .. 44

The distribution share of banks in household insurance has increased steadily in recent years . 44

Bancassurance provision rates, operating models and partnerships ... 45

Personal motor insurance 45

The majority of personal motor policies distributed by banks are underwritten on a captive basis .. 45

AG Insurance holds the highest weighted share of partnerships .. 45

AXA is active in this market, as both a captive (to AXA Bank) and an external insurance partner .. 45

Fidea Assurances and Mercator Verzekeringen each partner with one Crédit Agricole subsidiary 45

Banque de la Poste - Bank van De Post is the largest banking institution with no arrangement in this field ... 46

Household insurance ... 48

The provision of household insurance by Belgian banks is similar to that for personal motor insurance... . 48

... albeit ING Belgium utilises both its captive underwriter plus Mensura, an external partner... .. 48

... and Banca Monte Paschi Belgio is active in this field, but not in personal motor insurance. 48

Performance of key bancassurance underwriters .. 50

Bank-owned underwriters account for a substantial market share of total motor liability insurance... . 50

... which is somewhat lower for total motor damage insurance... .. 51

... but significantly higher for total property insurance. 52

Creditor insurance . 53

Consumer lending market size and growth 53

Mortgage lending . 53

Mortgage lending balances rose at a consistently strong rate between 2006 and 2010 .. 53

Non-mortgage lending . 54

Non-mortgage lending balances remained steady between 2008 and 2010 ... 54

Credit and other pay later cards .. 55

In 2010, there were 0.41 credit and other pay later cards per capita in Belgium .. 55

Creditor insurance provision rates, operating models and partnerships ... 56

Creditor insurance linked to mortgages .. 56

Captive and joint venture insurers account for more than half of all partnerships in this area… .. 56

…giving providers such as AG insurance and ING a substantial share of the market . 56

Several smaller mortgage lending institutions also possess captive insurance underwriters .. 57

Even the most prominent external underwriter holds less than 5% of weighted partnerships . 57

Creditor insurance linked to consumer finance .. 59

Over three quarters of non-mortgage credit providers promote creditor insurance .. 59

By weighted share of partnerships, Cardif is ranked second in this field in Belgium... . 59

... as a result of its relationships with a significant proportion of specialised lenders 59

In total, over 20 underwriters compete for mandates in loan payment protection insurance ... 60

Creditor insurance linked to credit cards . 62

Card-related creditor insurance is available from a half of Belgian credit card issuers investigated 62

The majority of leading underwriters have just one partnership in this area… .. 62

…whereas Cardif underwrites policies for both Fimaser and Buy Way Personal Finance .. 62

Creditor insurance risk coverage . 64

Many policies in Belgium are only designed to provide cover in the event of death . 64

Alternative distribution channels .. 65

Borrowers can also choose to acquire creditor insurance directly from insurers or through brokers ... 65

Creditor insurance market size, growth and forecast . 65

Growth in creditor insurance premiums is forecast to moderate slightly between 2011 and 2015 .. 65









Tabellenverzeichnis Marktanalyse - 'Bancassurance in Belgium: Life, Non-Life and Creditor Insurance'



LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY ... 1

Overview of bancassurance provision rates for different types of insurance in Belgium, 2011 . 2

1.0 INTRODUCTION 3

Banks and other lending institutions in Belgium contacted by Finaccord, segmented by type . 4

2.0 MARKET ANALYSIS ... 12

Gross written premiums for investment-related life insurance and retirement savings in Belgium, 2006-2010 .. 14

Gross written premiums for investment-related life insurance and retirement savings in Belgium, 2006-2010 (data) ... 15

Distribution share of banks in total life, individual life and group life insurance in Belgium, 2006-2009 (data) ... 15

Bancassurance provision of investment-related life insurance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships 18

Bancassurance provision of retirement savings in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 20

Market share in total life insurance of key bancassurance underwriters in Belgium, 2006-2010 (data) . 21

Gross written premiums for protection-related life insurance in Belgium, 2006-2010 .. 22

Gross written premiums for protection-related life insurance in Belgium, 2006-2010 (data) ... 23

Bancassurance provision of risk life insurance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 25

Bancassurance provision of critical illness insurance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 27

Bancassurance provision of income protection insurance in Belgium,, 2011: provision rate, operating models and weighted provider share of partnerships 29

Gross written premiums for accident and health insurance in Belgium, 2006-2010 31

Gross written premiums for accident and health insurance in Belgium, 2006-2010 (data) . 31

Distribution share of banks in total non-life, personal non-life, accident and health insurance in Belgium, 2006-2009 (data) .. 32

Bancassurance provision of accident insurance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 34

Bancassurance provision of medical expenses insurance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships 36

Bancassurance provision of health / hospital cash plans in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships 38

Market share in total non-life insurance of key bancassurance underwriters in Belgium, 2006-2010 (data) ... 39

Market share in non-work accident insurance of key bancassurance underwriters in Belgium, 2009-2010 (data) . 40

Market share in health insurance of key bancassurance underwriters in Belgium, 2009-2010 (data) 41

Gross written premiums for personal motor and household insurance in Belgium, 2006-2010 .. 42

Gross written premiums for personal motor and household insurance in Belgium, 2006-2010 (data) ... 43

Distribution share of banks in total non-life, personal non-life, motor and household insurance in Belgium, 2006-2009 (data) .. 44

Bancassurance provision of personal motor insurance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 47

Bancassurance provision of household insurance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 49

Market share in total motor liability insurance of key bancassurance underwriters in Belgium, 2009-2010 (data) . 50

Market share in total motor damage insurance of key bancassurance underwriters in Belgium, 2009-2010 (data) . 51

Market share in total property insurance of key bancassurance underwriters in Belgium, 2009-2010 (data) ... 52

Residential mortgage lending balances outstanding in Belgium (absolute and per capita), 2006-2010 53

Consumer non-mortgage lending balances outstanding in Belgium (absolute and per capita), 2006-2010 ... 54

Credit and other pay later cards issued and per capita in Belgium, 2006-2010 ... 55

Key data points for the consumer lending market in Belgium, 2006-2010 ... 56

Provision of creditor insurance linked to mortgages in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 58

Provision of creditor insurance linked to consumer finance in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships 61

Provision of creditor insurance linked to credit cards in Belgium, 2011: provision rate, operating models and weighted provider share of partnerships . 63

Risk coverage of creditor insurance policies in Belgium, segmented by type of underlying product, 2011 64

Creditor insurance gross written premiums in Belgium, segmented by policy type, 2007, 2011 and 2015 (forecast) ... 66

Creditor insurance gross written premiums in Belgium, segmented by cover type, 2007, 2011 and 2015 (forecast) ... 66

Creditor insurance gross written premiums in Belgium, segmented by policy and cover type, 2007, 2011 and 2015 (forecast) (data) ... 66

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