Creditor Metrics - Finaccord · Creditor Metrics: Consumer Approaches to Loan and Bill Protection...

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Selected Global Markets

Web: www.finaccord.com. E-mail: [email protected]© Finaccord, 2016 1

Creditor Metrics:Consumer Approaches to Loan and Bill

Protection Insurance in Selected Global Markets

Series Prospectus

October 2016

http://www.finaccord.com/

mailto:[email protected]



Prospectus contents

What is the research?

Which titles are available?

What is the rationale?

How does the consumer sample break down?

Which distribution channels are researched?

What is the report structure?

What are the key features of the research?

How can the research be used?

Who can use the research?

What are some of the key findings?

What is the cost and format?

How can the research be purchased?

3

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5

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7

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12-15

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17

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What is the research?

Finaccord’s Creditor Metrics series of reports and data annexes (in Excel format) offers detailed

and unique insights into the behaviour of consumers in the context of loan and bill protection

insurance. It is based on a survey of over 9,000 consumers in Australia, Canada, France, Germany,

Italy, Spain, the UK and the US carried out in July and August 2016.

Comprising both analytical reports and convenient data annexes in Excel format, the research

covers four types of creditor policy: insurance cross-sold in conjunction with mortgages; policies

cross-sold with consumer finance and personal loans; cover linked to credit cards; and bill payment

protection insurance. It measures take-up rates against the relevant audience (i.e. those with the

underlying lending products in the first three cases and all respondents in the fourth) and also

shows the distribution channels and interfaces used by respondents to take out creditor policies.

Distribution channels vary by type of creditor insurance but can include the bank or other institution

making the underlying loan plus a variety of other options as shown on slide 7; distribution

interfaces include face-to-face, online, inbound phone, outbound phone and postal sales.

Finally, the reports analyse claims frequency; for each country, this analysis is for all types of

creditor insurance combined broken out by reason for claim while for all countries combined, a

separate analysis is also given for each of the four types of creditor insurance researched.





Which titles are available?

The Creditor Metrics series is composed of eight separate publications:

• an overview study, providing comparative analyses of the metrics gathered across all eight

countries, as well as the detailed results for each individual country;

• seven country-specific titles, each providing the detailed results of Finaccord’s investigation into

consumer approaches to loan and bill protection insurance in a single country.

The titles of these reports are as follows:


Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Australia

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Canada

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in France

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Germany

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Italy

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Spain

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in the USA

Note that a separate report is not available for the UK as only mortgage-related cover and bill

payment protection insurance were investigated there.



http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-selected-global-markets.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-australia.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-canada.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-france.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-germany.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-italy.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-spain.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-usa.htm



What is the rationale?

Finaccord has developed its Creditor Metrics series of reports in order to fill the gap for detailed and

reliable data regarding consumer behaviour in the under-researched market for loan and bill

protection insurance across the countries in scope. There is no other up-to-date published

information providing insights into consumer approaches to loan and bill protection insurance on an

international basis, in spite of the fact that this is a market that has been characterised by

significant changes in recent years as a result of both an altered macro-economic environment and,

in some cases, regulatory intervention.

An equally important motivation for publishing this series is that creditor insurance, like many other

forms of insurance, continues to experience substantial changes to the way in which it is sold.

Online sales are growing in importance and while banks and other lending institutions are generally

most prominent as distributors for all types of policy other than bill payment protection insurance,

alternative channels are sometimes challenging this dominance.

The information in these studies concerning the frequency with which customers actually use their

policies to make a claim is also valuable. This analysis focuses on the risks that potentially cause a

temporary inability on the part of policyholders to meet regular loan or bill payments, namely

temporary incapacity (as a result of accident or illness), involuntary unemployment and carer time

(i.e. the need to take time off work to care for a relative).

.





How does the consumer sample break down?

The research for this study, which covers over 9,000 consumers across eight countries, was carried

out during July and August 2016. A breakdown of each country’s eventual sample by age and

annual household income is presented below.

SEGMENTATION BY AGE SEGMENTATION BY ANNUAL HOUSEHOLD INCOME

55+

35 – 54

18 – 34

Upper

Middle

Lower

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

AU CA FR DE IT ES UK US AU CA FR DE IT ES UK US





Which distribution channels are researched?

Note: in Canada and the US, ‘financial adviser or broker’ channel also includes independent insurance agents

Channel

Creditor

insurance linked

to mortgages

Creditor

insurance linked

to consumer

finance

Creditor

insurance linked

to credit cards

Bill payment

protection

insurance

Bank or lending institution that granted the loan ✓ ✓

Bank or lending institution that issued the card ✓

Other bank or lending institution ✓ ✓

Financial adviser or broker * ✓ ✓

Insurance company or tied agent - direct ✓ ✓

Electricity or gas company ✓

Telecoms company ✓

Water company ✓

Other ✓ ✓ ✓ ✓





What is the structure of the overview report?

0. Executive Summary: providing a concise evaluation of the report’s key findings.

1. Introduction: describing the rationale for the research.

2. Consumer Overview: this chapter provides a comparative analysis of the eight countries, illustrating: the proportion of all

respondents who, at the time of the research, held creditor insurance linked to a mortgage, a personal loan or consumer finance

contract, a credit card, or bill payment protection insurance; for the first three of these products, this is compared to the

proportion of eligible respondents holding them, namely those with the underlying type of credit; how the age and annual

household income of respondents affected the uptake of these forms of loan and bill protection insurance; the types of cover

held by insured respondents under each policy type, namely death, permanent disability, critical illness, temporary incapacity,

unemployment and carer time; quantification of the relative importance of the possible distribution channels (as shown on slide

7); quantification of the relative importance of the possible distribution interfaces, namely face-to-face, online (differentiating

between sales using tablets or mobile phones as opposed to laptop / desktop computers), inbound phone, outbound phone and

post; the proportion of respondents with creditor insurance who used their policy to make a claim during the 12 months prior to

the survey, with a segmentation by type of claim (temporary incapacity, unemployment and carer time) and by type of policy.

3. Australia: this individual country chapter provides further analysis and discussion of the elements outlined above, along with

some additional analyses (for example, cross-tabulation of distribution channels and interfaces used for buying this type of

cover).

4 - 10: Canada, France, Germany, Italy, Spain, the UK and the US (all contents as for France apart from the UK for which the

analysis is restricted to mortgage-related creditor and bill payment protection insurance).

11: Appendix: offering an outline of the methodology used, plus a full transcript of the online questionnaire.





What are the key features of the research?

Key features of the reports in this series include:

• unique analyses showing penetration rates across eligible respondents for creditor insurance in

each country, and how these percentages vary according to the profile of the respondent;

• data describing the percentage of insured respondents who believe that they hold cover for each of

the six main risks, namely death, permanent disability, critical illness, temporary incapacity,

unemployment and carer time;

• robust statistics illustrating the ways in which loan and bill protection insurance policies are

acquired in each country, including sales by the banks and other institutions making the underlying

loans plus alternative channels such as direct sales by insurance companies and sales by financial

advisers;

• reliable information concerning the importance of online and offline sales for this type of cover,

including a unique split of online sales by type of device used (i.e. regular desktop or laptop

computers, tablets or mobile phones);

• valuable insights into claims frequency for creditor insurance, segmented by reason for making the

claim as well as by country and product.





How can the research be used?

You may be able to use the reports in this series in one or more of the following ways:

• to benchmark your organisation’s performance in creditor insurance: given current uptake in each

country, could your company be selling more of this form of protection?

• to understand the types of policy and cover acquired both by borrowers and, in the case of bill

payment protection insurance, other consumers;

• to evaluate the opportunities for distributing loan and bill protection insurance through channels

other than the banks and other institutions making the underlying loans: to what extent will

borrowers buy through these means?

• to assess the apparent willingness of consumers to purchase this form of cover online; given the

types of device that online buyers report using, what is the scope for marketing more effectively to

this audience?

• to appreciate the claims frequency associated with loan and bill protection insurance, how this

varies by country and according to the reason for making a claim, and what this might mean for the

profitability of your activities in this sector.





Who can use the research?

1. Insurance providers: firms with an interest in loan or bill protection insurance in any of these

countries will be able to arrive at a detailed understanding of the dynamics of this complex

market, which can then be used for strategic planning and for negotiating new distribution

partnerships;

2. Banks and specialised lenders: traditionally, cross-selling creditor insurance has been an

important means by which banking institutions have enhanced the profitability of their core

lending business;

3. Consumer-facing organisations that send regular bills: firms such as electricity, gas, telecoms

and water companies will benefit from this research by appreciating the extent to which they

can viably cross-sell bill payment protection insurance policies to their customers;

4. Management consultancies: are you helping an underwriter or distributor of loan and bill

protection insurance to improve its performance in this sector in Australia, Canada, France,

Germany, Italy, Spain, the UK or the US? If so, this research will provide you with unique

insights into consumer behaviour in these markets.





What are some of the key findings?

Note – country X is defined in the research itself

Source: Finaccord Creditor Metrics Survey

Creditor insurance linked to mortgages

Creditor insurance linked to personal loans /

consumer finance

Creditor insurance linked to credit cards

Bill payment protection insurance

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

Insurance take-up rate

Eligible respondents

% of eligible respondents and insurance take-up rates

21.3%

25.2%

70.5%

100.0%

54.5%

40.0%

16.0%

3.4%

1. In country X, creditor insurance take-up rates are

reportedly highest in conjunction with mortgages




Web: www.finaccord.com. E-mail: [email protected]© Finaccord, 2016

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

13

What are some of the key findings? (cont.)

Note - this data is shown separately for the seven individual countries (i.e. excluding the UK) in the research itself


Death

Permanent disability

Critical illness

Temporary incapacity

Unemployment

Carer time

% of insured borrowers holding each type of cover

2. Across the seven countries where this type of insurance exists, over a third of

insured borrowers with personal loans or consumer finance contracts hold cover

for one or more of critical illness, temporary incapacity and / or unemployment

79.5%

52.1%

36.6%

41.2%

38.8%

8.8%






Note – country Y is defined in the research itself


Channels Interfaces

% distribution split for creditor insurance linked to mortgages

Directly from insurer (or

tied agent) – 29.3%

Financial adviser or

broker – 17.2%Other bank or lending

institution – 6.9%

Bank or lending

institution that granted

the loan – 46.6%

0%

20%

40%

60%

80%

100% Inbound phone – 1.7%

Online (tablet) – 1.7%

Online – laptop or

desktop – 36.2%

Face-to-face – 60.3%

3. In country Y, sales of mortgage-related creditor insurance are occurring

increasingly through channels other than the mortgage lender and online






Key findings from executive summaries in this series include:

• the reported take-up rate for creditor cover linked to mortgages and personal loans / consumer

finance is highest in France although it peaks in Spain for credit card payment protection insurance

and in Germany for bill payment protection policies;

• across all countries other than the UK (where much of the market has ceased to exist due to

regulatory intervention) and for all three types of loan-related creditor insurance, a significant

proportion of insured borrowers hold cover for temporary capacity or unemployment but the

penetration rate for carer cover does not exceed 25% in any case;

• face-to-face sales represent the most significant distribution interface for loan and bill protection

insurance in the vast majority of cases albeit with the notable exceptions of credit card and bill

payment protection insurance in Australia;

• Finaccord's research suggests that claims acceptance rates for creditor insurance are significantly

lower than for other types of cover for which it has previously researched this metric (e.g. extended

warranties for white, brown and grey goods, mobile phone insurance and extended warranties, pet

insurance, travel insurance).





What is the cost and format?

All of the reports in the Creditor Metrics series are available as standard PDF documents and Excel data

annexes. Costs for the various titles in the series and for selected regional and country-specific market

reports on the subject are as follows:

REPORT COST *

USD 4,195

USD 1,195

USD 1,195

USD 1,195

USD 1,195

USD 1,195

USD 1,195

USD 1,195

USD 4,195

USD 1,395

USD 8,395

USD 2,795

USD 895


Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Australia

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Canada

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in France

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Germany

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Italy

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in Spain

Creditor Metrics: Consumer Approaches to Loan and Bill Protection Insurance in the USA

Creditor Insurance in the Asia-Pacific Region

Creditor Insurance in Canada

Creditor Insurance in Europe

Creditor Insurance in Latin America

Creditor Insurance in South Africa

* GST at the prevailing rate will be added to the basic price for Singapore-based buyers except for where the request is

for hard copy only. Costs quoted are for a single office, single country licence only. For corporate user licence options,

please see the next slide for further details. Invoices can be paid in EUR or GBP, at the prevailing exchange rate, if

preferred.



http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-selected-global-markets.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-australia.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-canada.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-france.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-germany.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-italy.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-spain.htm

http://www.finaccord.com/uk/report_creditor-metrics_consumer-approaches-loan-bill-protection-insurance-usa.htm

http://www.finaccord.com/uk/report_creditor-insurance-in-asia-pacific-region.htm

http://www.finaccord.com/uk/report_creditor-insurance-in-canada.htm

http://www.finaccord.com/uk/report_creditor-insurance-in-europe.htm

http://www.finaccord.com/uk/report_creditor-insurance-in-latin-america.htm

http://www.finaccord.com/uk/report_creditor-insurance-in-south-africa.htm



How can the research be purchased?

Simple. Just go to the relevant area of the Finaccord website, create your account (if you do not

have one already) and place your order online. Products paid for online by card will be delivered

immediately by e-mail but please allow up to one working day for delivery by e-mail if you choose to

pay on receipt of invoice.

With regards to the corporate user licence, you will be asked to choose one of the following options:

1. One office, one country: no supplement over and above basic cost of reports ordered

2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered

3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered

4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered

Alternatively, you can place an order by sending your request to [email protected], clearly

stating the product(s) required, associated price(s) and billing details for eventual invoice or card

payment receipt.




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