finaccord uniglobal presentation, 22-05-14

© Finaccord Ltd., 2014 Web: www.finaccord.com, E-mail: [email protected]

Global Trends in Distribution Systems Used for Insurance

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Global Trends in Distribution

Systems Used for Insurance

UNIGLOBAL 8th Annual Insurance

Distribution Forum

22nd May 2014



2

Agenda

Defining the distribution universe for insurance products

traditional channels

non-traditional channels

channels and interfaces

International perspectives in insurance distribution

car dealers and manufacturers

mobile phone network operators

retailers

Any questions?



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Defining the distribution universe for

insurance products: traditional channels

Direct sales

Insurance agents

Insurance brokers / financial advisers



4


insurance products: non-traditional channels

Financial partners

Commercial partners

Not-for-profit affinity partners

Sector-specific partners

Aggregators

Worksite



5


insurance products: financial partners

Financial partners

Commercial partners



Aggregators

Worksite

Banks and similar institutions

Credit unions

Specialised lenders

Other insurance companies



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insurance products: commercial partners

Automotive associations (e.g. AA, ADAC)

Cashback websites

Electricity, gas and water companies

Football and other sports clubs

Loyalty schemes

Media entities

Post Office

Supermarkets and other retailers

Telecoms companies

Financial partners

Commercial partners



Aggregators

Worksite



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Defining the distribution universe for insurance

products: not-for-profit affinity partners

Charities

Educational institutions

Professional associations

Sports organisations

Trade unions

Financial partners

Commercial partners



Aggregators

Worksite



8


insurance products: sector-specific partners

Airlines

Automotive clubs

Car dealers

Car manufacturers

Estate agents

Pet owners' clubs

Travel companies

Vets

Financial partners

Commercial partners



Aggregators

Worksite



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insurance products: channels and interfaces

Direct sales

Insurance agents

Insurance brokers / financial advisers

Financial partners

Commercial partners



Aggregators

Worksite

Traditional channels

Non-traditional channels

CHANNELS

INTERFACES

Face-to-face

Online Laptop / desktop

Tablet

Mobile phone

Inbound phone

Outbound phone

Post



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insurance products: generally speaking...

- Non-traditional distribution channels are gaining ground against traditional ones,

especially for insurance bought by consumers, because:

> they are often more effective (in terms of cost of use, customer contact /

knowledge, technology etc.)

> they often have a strong incentive to expand in insurance (e.g. because it

offers higher margins than their core business);

- online sales are gaining ground against all other distribution interfaces, especially

for insurance bought by consumers.



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International perspectives in insurance

distribution: car dealers and manufacturers (1)

- Global research covering around 2,500 car dealers and over 120 manufacturer

brands in more than 40 countries worldwide;

- coverage of motor insurance, extended warranties, GAP insurance and niche (e.g.

minor damage) insurance plus road assistance and prepaid service contracts (plus

finance and leasing) marketed to consumers in conjunction with passenger car

purchase (i.e. not fleets or commercial vehicles);

- valuation of insurance, warranty and assistance policies sold to consumers via car

dealers and manufacturers (split between new and used cars).



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Total insurance, warranty and assistance GWP and other revenues sold via

automotive trade as % of value of sales of new and used cars to consumers

6.6% 6.5% 6.4%

5.1%

4.4% 4.3%4.1%

3.6%

2.3% 2.1%

0.0%

1.5%

3.0%

4.5%

6.0%

7.5%

Source: Finaccord Global Consumer Automotive Financial Services reports



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Segmentation of total insurance, warranty and assistance GWP and other

revenues sold via automotive trade to consumers buying new and used cars

0%

20%

40%

60%

80%

100%Other policies *

Extended warranties

Motor insurance


* Other policies include creditor,

GAP and niche (e.g. minor

damage) insurance plus road

assistance and prepaid service

contracts



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Insurance, warranty and assistance (excluding motor insurance) GWP and other revenues

sold via automotive trade as % of value of sales of new and used cars to consumers


2.2%

0.6%

3.1%2.9%

3.6%

1.5%

4.1%

2.9%

2.3%

1.6%

0%

1%

2%

3%

4%

5%



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distribution: mobile phone network operators (1)

- Global research covering 255 mobile phone network operator brands across 70

countries worldwide;

- coverage of accident, bill payment protection, health, household, identity protection,

life, mobile gadget, mobile phone, motor, and travel insurance plus home, legal,

medical and road assistance, and miscellaneous other insurance and assistance;

- 125 mobile phone network operator brands drawn from 78 telecoms groups act as

distributors of insurance or assistance products in scope, with 307 individual product

initiatives in total.



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Unweighted provision rate

Weighted provision rate

36.1%

13.3%

4.3%

0.8%

0.8%

2.0%

9.4%

27.2%

13.4%

2.8%

0.8%

0.3%

15.3%

22.3%

0% 20% 40% 60% 80% 100%

Mobile phone insurance

Mobile gadget insurance

Bill payment protection insurance

Identity protection insurance / assistance

Motor insurance

Household insurance

Travel insurance / assistance

Source: Finaccord Global Mobile Operators: Strategies in Insurance and Assistance report

% of mobile operator brands worldwide

offering insurance / assistance type

Note: weighted data weights provision

rate in accordance with number of

mobile subscribers serviced by each

active mobile phone network operator



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Accident insurance

Health insurance

Life insurance

Home assistance

Legal assistance

Medical assistance

Road assistance

Miscellaneous insurance / assistance

Source: Finaccord Global Mobile Operators: Strategies in Insurance and Assistance report

% of mobile operator brands worldwide

offering insurance / assistance type

8.6%

3.1%

6.3%

5.9%

5.5%

10.2%

7.5%

6.7%

23.1%

4.4%

17.8%

4.0%

4.2%

18.2%

6.9%

7.5%

0% 20% 40% 60% 80% 100%

Unweighted provision rate

Weighted provision rate

Note: weighted data weights provision

rate in accordance with number of

mobile subscribers serviced by each

active mobile phone network operator



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International perspectives in

insurance distribution: retailers (1)

- Global research covering over 6,300 major retail brands in 60 countries worldwide;

- focus on 'mainstream' insurance and assistance, namely accident, dental, health,

household, life, motor, pet, travel and other insurance plus assistance products;

- creditor insurance linked to consumer finance, extended warranties, 'product

insurance' for electronic goods and insurance or assistance linked to retailer payment

cards are not included in analysis;

- 259 major retail brands drawn from 150 retail groups act as distributors of insurance

or assistance products in scope, with 1,095 individual product initiatives in total;

- these are all up from previous research from 2010 when equivalent figures were

232, 106 and 847, respectively.



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4.1%

3.1%

3.6%

4.8%

10.8%

3.9%

7.3%

3.0%

4.5%

4.1%

0% 5% 10% 15%

Total

Online only

Offline only

Mixed

South Africa

North America

Latin America

Europe

Australasia

Asia-Pacific

Source: Finaccord Global Retailer Insurance and Assistance report

% of major retail brands offering insurance or assistance products

Note: insurance and assistance

products in scope are accident, dental,

health, household, life, motor, pet, travel

and other insurance plus assistance

products. Creditor insurance linked to

consumer finance, extended warranties,

'product insurance' for electronic goods

and insurance or assistance linked to

retailer payment cards are not included

in analysis.



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% of major retail brands offering insurance or assistance products

4.1%

9.3%

3.5%

3.7%

2.7%

3.0%

1.9%

1.7%

11.2%

1.1%

1.4%

0% 5% 10% 15%

Total

Supermarket / hypermarket

Sporting goods

Speciality

Health / beauty

Fuel

Fashion

DIY / furniture / home

Department store / variety

Consumer electronics

Books and media

Note: insurance and assistance

products in scope are accident, dental,

health, household, life, motor, pet, travel

and other insurance plus assistance

products. Creditor insurance linked to

consumer finance, extended warranties,

'product insurance' for electronic goods

and insurance or assistance linked to

retailer payment cards are not included

in analysis.



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Motor insurance, 15.4%

Household insurance, 15.3%

Life insurance, 14.4%

Accident insurance, 14.0%

Health insurance, 11.5%

Other insurance, 8.5%

Travel insurance, 6.7%

Pet insurance, 5.4%

Assistance, 4.6%

Dental insurance, 4.3%



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Any questions?



Finaccord is a leading market research, publishing and consulting company specialising in financial

services. We provide our clients with insight with a particular focus on marketing and distribution

strategies, including affinity and partnership marketing.

Our areas of expertise include: affinity and partnership marketing; automotive financial services;

bancassurance; commercial non-life insurance brokers; consumer intelligence; extended warranties

and insurance for white, brown and grey goods; home emergency insurance and assistance;

insurance and assistance linked to payment cards and bank accounts; mobile gadget and phone

insurance; professional indemnity insurance; retailer payments, banking, insurance and assistance;

road assistance; small business insurance; trade credit insurance; and travel insurance and

assistance.

Our international network of consultants is able to deliver information quickly and accurately across a

range of countries worldwide, basing research projects on robust data and knowledge.

Contact us

The Office Farringdon

24 Greville Street

London,

EC1N 8SS

Phone: +44 20 3178 2556

Fax: +44 20 7198 7902

Email: [email protected]

www.finaccord.com

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finaccord uniglobal presentation, 22-05-14

Economy & Finance