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Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 1
Bancassurance Models
Around the World Car dealers and manufacturers as
distribution channels Presentation at the 5th Annual Insurance Distribution
Strategies Forum
Vienna, October 17th – 18th 2013
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 2
Agenda
How important is the automotive channel for motor
insurance?
How large are the markets for creditor and GAP
insurance and extended warranties in comparison?
Should you distribute through manufacturer brands or
dealers?
What is the outlook for distributing insurance through
the automotive channel?
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 3
Questions for you
Q1) Is the automotive trade in decline as a channel for
distributing motor insurance in your market? [Yes / no]
Q2) If yes, which other channels have gained share? [Select
all that apply]
online aggregators
cashback websites
automotive associations
direct sales by insurers
banks
other channels (e.g. retailers)
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 4
Automotive financial services research, 2013
25 European countries
1,350 dealers interviewed across Europe
30 to 40 manufacturer brands covering 99% of new car
registrations per country
Market size estimates
Distribution analysis
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 5
EUR 7.55 billion of motor insurance GWP
originally sold through the automotive channel
Personal motor insurance premiums originally sold through manufacturer
brands and car dealerships (new plus in-force business), Europe, 2012
Source: Finaccord Automotive Financial Services Model
Automotive trade,
EUR 7.55 billion,
7.5%
Other channels,
EUR 93.42 billion,
92.5%
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 6
This channel accounts for 20% or more
of premiums in some countries
Personal motor insurance premiums originally sold through manufacturer brands
and car dealerships (new plus in-force business), selected countries, 2012
Source: Finaccord Automotive Financial Services Model
23.0%
20.1%
10.2%
5.6%
2.6%
2.1%
0.0%
0% 5% 10% 15% 20% 25%
Russia
Norway
Germany
Italy
UK
France
Ireland
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected]
0%
20%
40%
60%
80%
100%
Average (excl. Italy) Italy
Liability onlyNon-liability only
ComprehensiveNon-liability only
Comprehensive
7
Dealers nearly always offer
comprehensive motor insurance
Maximum level of motor insurance coverage
sold by dealers in Europe, 2013
Source: Finaccord Automotive Financial Services Survey
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 8
Creditor insurance, GAP insurance and
extended warranty terms and definitions
Creditor insurance: pays the balance or instalments of a loan or lease in
case of death, disability or unemployment
Restschuldversicherung oder Ratenschutzversicherung
assurance décès, incapcité, invalidité, perte d'emploi
GAP insurance: covers the difference between an insurance payout in
case of complete loss and the outstanding balance on a loan or lease or
price of a new car
GAP-Deckung
garantie perte financière
Extended warranty: covers the cost of repair in case of mechanical failure
after the factory warranty has expired
erweiterte Garantie
extension de garantie
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 9
Creditor, GAP and extended warranties together are
worth three quarters of the motor insurance market
Value of four products sold through the automotive trade, in GWP
and similar revenues (new and in-force business), 2012
Source: Finaccord Automotive Financial Services Model
0
2
4
6
8
10
Motor insurance Others
GAP
Creditor
Extended warranties
EUR billion
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 10
New business for these four products can exceed 2% of
the value of all cars sold by dealers to private customers
GWP and similar revenues (new business only) for motor, creditor, GAP insurance and extended
warranties as % of value of new and used cars sold by dealers to private customers, 2012
Source: Finaccord Automotive Financial Services Model
2.3%
2.0%
1.9%
1.7%
1.4%
0.9%
0.2%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5%
Sweden
Germany
Italy
Spain
UK
France
Ireland
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 11
But there are major country differences again
Negligible creditor insurance in Finland and Romania, and no new
business in Ireland and the UK in 2013
No GAP insurance in six countries and negligible GAP insurance in
another six
Manufacturer brands provide extended warranties internally or
through captives half of the time, restricting the market for external
providers
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 12
The largest market also uses
external underwriters the most
Operating models used by car manufacturer brands for extended
warranties, selected countries and European average (unweighted), 2013
Source: Finaccord Automotive Financial Services Survey
0% 20% 40% 60% 80% 100%
Germany
Average
France
Denmark
External underwriter Internal / captive Other
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 13
Should you sell motor insurance via
dealers or manufacturer brands?
Product sources used by car dealers for motor insurance,
selected countries and European average (unweighted), 2013
Source: Finaccord Automotive Financial Services Survey
0% 20% 40% 60% 80% 100%
Belgium
Germany
Italy
Average
Russia
Manufacturer / importer Dealer (non-tied) Both
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 14
Should you sell extended warranties
via dealers or manufacturer brands?
Product sources used by car dealers for extended warranties,
selected countries and European average (unweighted), 2013
Source: Finaccord Automotive Financial Services Survey
0% 20% 40% 60% 80% 100%
Turkey
Germany
Average
France
Norway
Manufacturer / importer Dealer (non-tied) Both
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 15
Distribution through independent finance houses
A number of finance houses also distribute motor and GAP
insurance plus extended warranties, as well as creditor
insurance
Germany: BDK and Santander Consumer Bank both have
partners for GAP and motor insurance plus extended warranties
France: Cetelem, CGI, Financo, GE Money Bank and Viaxel all
have partners for GAP insurance and extended warranties
Hungary: Erste Bank with Union for motor insurance
Portugal: BBVA with MAPFRE for motor insurance
Russia: Rusfinance Bank with Société Générale Strakhovanie
for GAP insurance
UK: Black Horse with Car Care Plan for extended warranties
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 16
What is the outlook for distributing
insurance through the automotive trade?
RESULTS OF Q1) AND Q2) DISPLAYED HERE
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 17
The competition from online aggregators
Percentage of consumers taking out or renewing motor insurance through online
aggregators, average of France, Germany, Italy, Spain and the UK, 2012 (unweighted)
6.9%
22.4%
0%
10%
20%
30%
40%
50%
Renewals New buyers and switchers
Source: Finaccord Aggregation Metrics
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 18
Additional products in Europe
Driver or passenger accident insurance
Legal protection insurance
Minor damage insurance
Tyre insurance
Vehicle contents
Vehicle running costs insurance
Window insurance (in addition to windscreens)
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 19
Additional products in North America
Wheel and tyre insurance
Multiple levels of extended warranty
major items only, e.g. powertrain
minor items only, e.g. brake pads, headlamps, belts and hoses
Excess wear and tear cover for lease contracts
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 20
Questions for you
Q3) Which type of product do you think has potential for
growth? [Select all that apply]
Cover packaged with motor insurance policies
Cover packaged with finance and leasing
Separate niche insurance products
Car dealers and manufacturers as distribution channels
© Finaccord Ltd., 2013 Web: www.finaccord.com. E-mail: [email protected] 21
Any questions?
Sources and related Finaccord publications:
Consumer Automotive Financial Services in Europe Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal,
Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, Ukraine and the UK
Consumer Automotive Financial Services in Major Global Markets Argentina, Australia, Brazil, Canada, China, India, Indonesia, Japan, Mexico, South
Africa; South Korea, Taiwan and Thailand and the US
Fleet Insurance and Assistance in Europe
Road Assistance in Europe