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

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

Finaccord’s report titled Bancassurance in Romania: Life, Non-Life and Creditor Insurance is about the distribution of insurance products through banks and other lending institutions in Romania. 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 47 organisations, it identifies 143 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 Romania;

- 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 Romania;

- 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 Romania.

Inhaltsverzeichnis Marktanalyse - 'Bancassurance in Romania: 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

Investment-related life insurance and retirement savings .. 13

Insurance market size and growth .. 13

Investment-related life insurance and retirement savings have advanced rapidly in recent years .. 13

Distribution share of banks .. 15

Bancassurance provision rates, operating models and partnerships ... 15

Investment-related life insurance 15

Comparatively few banking institutions in Romania sell investment-related life insurance .. 15

BCR Asigurari, owned by Vienna Insurance Group, benefits from its tie with Banca Comerciala Romana 15

Many sizeable banking institutions do not market investment-related life insurance 15

AEGON’s link with Banca Transilvania dates back to an agreement forged in 2007 ... 16

Citibank began marketing ING’s ‘Academica’ and ‘Regal’ policies in 2010 .. 16

Retirement savings .. 16

Arrangements for retirement savings are largely the same as those for investment-related life insurance . 16

Performance of key bancassurance underwriters .. 19

BCR Asigurari de Viata closed the gap on the market leader, ING Asigurari de Viata, in 2010 .. 19

Protection-related life insurance . 20

Insurance market size and growth .. 20

Between 2006 and 2010, protection-related life insurance is likely to have grown by around three quarters . 20

Distribution share of banks .. 21

Bancassurance provision rates, operating models and partnerships ... 21

Risk life insurance 21

Three captive underwriters are apparent in the market for risk life cover sold by banks .. 21

No non-captive underwriter holds more than two bancassurance relationships in this arena .. 22

Several sizeable banking institutions do not market risk life insurance . 22

ERGO’s link with UniCredit ?iriac Bank is part of a wider multi-country bancassurance agreement ... 22

Critical illness insurance and income protection insurance ... 22

Neither policy has been introduced as a bancassurance product in Romania . 22

Performance of key bancassurance underwriters .. 22

Accident and health insurance 24

Insurance market size and growth .. 24

The tiny market for accident and health insurance in Romania has contracted in recent years .. 24

Distribution share of banks .. 25

Bancassurance provision rates, operating models and partnerships ... 25

Accident insurance ... 25

Accident insurance is not commonly marketed by Romanian banks... . 25

... although it is available from several of the larger institutions . 25

Medical expenses insurance ... 28

Only one bank-owned underwriter is active in the market for medical expense insurance .. 28

By weighted share of partnerships, BCR Asigurari is the market leader ... 28

Health / hospital cash plans . 30

The provision rate for health and hospital cash plans is the same as for other accident and health policies... ... 30

... which means that a majority of banks do not market this product . 30

Performance of key bancassurance underwriters .. 32

Key bancassurers secured a combined market share of over 25% in accident insurance in 2010 . 32

BCR Asigurari de Viata reported gross written premiums equal to a 15.90% share of health cover in 2010 .. 33

Personal motor and household insurance 34

Personal motor insurance makes up almost 95% of the combined total market .. 34

Distribution share of banks .. 35

Bancassurance provision rates, operating models and partnerships ... 35

Personal motor insurance 35

Just over a third of banking institutions in Romania sell personal motor insurance .. 35

Many comparatively large banks have not yet launched personal motor insurance 36

Household insurance ... 38

Groupama possesses three exclusive and two shared partnerships for household insurance ... 38

Generali’s six exclusive relationships are with smaller banking institutions .. 38

Only two banks that offer mortgages do not also intermediate household insurance .. 38

Performance of key bancassurance underwriters .. 40

In 2010, BCR Asigurari claimed a market share of total motor insurance of more than 9%... . 40

... with the equivalent figure rising to well over 10% in the case of total property insurance 40

Creditor insurance . 41

Consumer lending market size and growth 41

Mortgage lending . 41

Romania’s mortgage market has advanced strongly but remains in its infancy ... 41

Non-mortgage lending . 42

Although balances fell in 2009 and 2010, the non-mortgage lending sector is significantly larger .. 42

Credit and other pay later cards .. 43

Although they peaked in 2008, credit cards issued in 2010 were still over 60% higher in 2010 than in 2006 . 43

Creditor insurance provision rates, operating models and partnerships ... 44

Creditor insurance linked to mortgages .. 44

All but five mortgage lending institutions in Romania have an arrangement for related creditor insurance . 44

Romania’s second largest bank by retail customer numbers works with two underwriters .. 44

Eight bank-owned captives are apparent in the market for creditor insurance linked to mortgages 45

Creditor insurance linked to consumer finance .. 47

Close to a half of lending institutions offering consumer finance do not sell creditor insurance ... 47

MetLife’s ALICO possesses four exclusive relationships in this domain ... 47

Creditor insurance linked to credit cards . 49

Schemes for credit card payment protection insurance are comparatively thin on the ground 49

Creditor insurance risk coverage . 51

Comprehensive creditor insurance policies are widely available in Romania ... 51

Alternative distribution channels .. 51

Few alternative distribution channels exist for selling creditor insurance in Portugal 51

Creditor insurance market size, growth and forecast . 52

Mortgage-related creditor insurance will provide the main engine for growth up to 2015 52









Tabellenverzeichnis Marktanalyse - 'Bancassurance in Romania: 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 Romania, 2011 ... 2

1.0 INTRODUCTION 3

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

2.0 MARKET ANALYSIS ... 12

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

Gross written premiums for investment-related life insurance and retirement savings in Romania, 2006-2010 (data) ... 14

Bancassurance provision of investment-related life insurance in Romania, 2011: provision rate, operating models and weighted provider share of partnerships 17

Bancassurance provision of retirement savings in Romania, 2011: provision rate, operating models and weighted provider share of partnerships . 18

Market share in total life insurance of key bancassurance underwriters in Romania, 2006-2010 (data) ... 19

Gross written premiums for protection-related life insurance in Romania, 2006-2010 20

Gross written premiums for protection-related life insurance in Romania, 2006-2010 (data).. 21

Bancassurance provision of risk life insurance in Romania, 2011: provision rate, operating models and weighted provider share of partnerships . 23

Gross written premiums for accident and health insurance in Romania, 2006-2010 .. 24

Gross written premiums for accident and health insurance in Romania, 2006-2010 (data) 25

Bancassurance provision of accident insurance in Romania, 2011: provision rate, operating models and weighted provider share of partnerships . 27

Bancassurance provision of medical expenses insurance in Romania, 2011: provision rate, operating models and weighted provider share of partnerships 29

Bancassurance provision of health / hospital cash plans in Romania, 2011: provision rate, operating models and weighted provider share of partnerships 31

Market share in accident insurance of key bancassurance underwriters in Romania, 2006-2010 (data) .. 32

Market share in health insurance of key bancassurance underwriters in Romania, 2006-2010 (data) .. 33

Gross written premiums for personal motor and household insurance in Romania, 2006-2010 34

Gross written premiums for personal motor and household insurance in Romania, 2006-2010 (data) . 35

Bancassurance provision of personal motor insurance in Romania, 2011: provision rate, operating models and weighted provider share of partnerships . 37

Bancassurance provision of household insurance in Romania, 2011: provision rate, operating models and weighted provider share of partnerships . 39

Market share in total motor insurance of key bancassurance underwriters in Romania, 2006-2010 (data) ... 40

Market share in total property insurance of key bancassurance underwriters in Romania, 2006-2010 (data) ... 40

Residential mortgage lending balances outstanding in Romania (absolute and per capita), 2006-2010 ... 41

Consumer non-mortgage lending balances outstanding in Romania (absolute and per capita), 2006-2010 ... 42

Credit and other pay later cards issued and per capita in Romania, 2006-2010 . 43

Key data points for the consumer lending market in Romania, 2006-2010 .. 44

Provision of creditor insurance linked to mortgages in Romania, 2011: provision rate, operating models and weighted provider share of partnerships . 46

Provision of creditor insurance linked to consumer finance in Romania, 2011: provision rate, operating models and weighted provider share of partnerships 48

Provision of creditor insurance linked to credit cards in Romania, 2011: provision rate, operating models and weighted provider share of partnerships . 50

Risk coverage of creditor insurance policies in Romania, segmented by type of underlying product, 2011 ... 51

Creditor insurance gross written premiums in Romania, segmented by policy type, 2007, 2011 and 2015 (forecast) ... 52

Creditor insurance gross written premiums in Romania, segmented by cover type, 2007, 2011 and 2015 (forecast) ... 53

Creditor insurance gross written premiums in Romania segmented by policy and cover type, 2007, 2011 and 2015 (forecast) (data) ... 53

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