Global Retailer Insurance: Affinity Schemes in Supermarkets and Other Stores
Finaccord, May 2010, Pages: 210
Global Retailer Insurance: Affinity Schemes in Supermarkets and Other Stores, published in April 2010, is a report about the involvement of retailers around the world in the distribution of standalone motor insurance, household insurance, accident insurance, dental insurance, other health insurance, travel insurance, pet insurance and life insurance, as part of a growing trend in financial services sometimes referredto as ‘brandassurance’.
Major retail brands were found to be active in this arena in 35 of the 65 countries researched. Namely, these are Argentina, Australia, Belgium, Brazil, Canada, Chile, Colombia, Czech Republic, Ecuador, Estonia, Finland, France, Germany, Hungary, India, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, Netherlands, New Zealand, Peru, Portugal, Romania, Russia, Singapore, South Africa, South Korea, Spain, Switzerland, Thailand, the UK and the USA, hence chapters for each of these are included in the publication.
In fact, the study provides a comprehensive and detailed overview of the worldwide market for insurance sold to consumers by supermarkets, department stores and other types of retail chain. Moreover, the PartnerBASE™ database that accompanies the report details each of the 847 marketing initiatives traced by Finaccord for the lines of consumer insurance investigated, including the operating models and insurance providers used.
A number of factors, some of which are specific to financial services and some to retailing, provide ample justification for the development of this report and the sister reports covering other topics in retailer banking and insurance worldwide. With regards to financial services, this rationale can be broken down between what might be characterized as ‘traditional’ retailer financial services (i.e. cob d d/ branded / store cards and consumer finance / personalloans) and ‘non-traditional’ retailer financial services (i.e. insurance, mortgages and savings accounts).
Concerning ‘non-traditional’ retailer financial services, it can be asserted that in much of the world, consumers are changing the way in which they acquire financial services and demonstrating an increasing willingness to use alternative distribution systems, including major non-financial brands such as large retailers. Moreover, the successful precedent of retailer insurance in markets such as Chile and the UK is encouraging major retail brands in other countries to challenge the traditional distribution systems with their own ‘brandassurance’ propositions
Furthermore, it should be acknowledged that successful retailers in less developed markets are growing rapidly as an increasing proportion of consumers allocate their expenditure to formal retailing concepts. In addition, a mature environment for retailing in the more developed markets signifies that retailers need to investigate new means of achieving revenue growth which can include insurance products, in particular
Key features of this report include:
- in-depth consideration of retailer provision of mainstream insurance: 232 major retail brands drawn from 106 retailing groups in 35 countries out of the 65 researched were active in ‘brandassurance’ by the first quarter of 2010;
- identification of the operating models and brokers or underwriters used for 847 individual insurance product marketing initiatives instigated by major retailers;
- consideration of the involvement as insurance intermediaries of major retail brands from retailing categories including department stores, DIY chains, health and beauty outlets, online or home shopping specialists, and supermarkets;
- disclosure of number of policies sold for leading protagonists in retailer insurance including El Corte Inglés, Falabella, Loblaw Companies and Tesco;
- background commentary and data concerning the broader banking and payment card operations of major retail chains that have developed insurance propositions.
0.0 EXECUTIVE SUMMARY
Insurance is being sold to customers by well over 200 major retail brands worldwide drawn from over 100 retailing groups, some of which operate through multiple brands
Chile is the country in which major retailers have the greatest involvement in this sphere
Motor and household insurance account for almost 40% of the 847 product initiatives identified
Department stores, cash and carry outlets and supermarkets have the highest rates of involvement
Around the world, retailers utilize a diverse range of operating models for selling insurance
Underwriting joint ventures are visible only in France, India and, from later in 2010, in the UK and Finaccord identified only a handful of insurers classifiable as captive underwriters
The influence of retail brands as distributors of insurance and other financial services is likely to increase driven in part by dynamics in the underlying retail markets in part by the interest of insurance providers in developing new distribution channel and in part by the increasing willingness of consumers to purchase insurance from retailers
1.0 INTRODUCTION
Rationale
Retailer financial services can be broken down between ‘traditional’ and ‘non-traditional’ services
Retailers can take advantage of changes in consumer finance and payment card markets
Chile and the UK provide successful precedents for retailers interested in selling insurance
The evolution of the retailing market itself is also favourable to the integration of financial services
Product definitions
The focus of the research lies on stand-alone insurance policies rather than packaged cover
Methodology
Finaccord’s research covers 6,280 major retail brands worldwide
Finaccord
2.0 GLOBAL OVERVIEW
Introduction
Retailer insurance
232 retail brands drawn from 106 retailer groups distribute insurance to their customers
Walmart, Carrefour and Falabella have the broadest geographical spread of insurance schemes
Chile can justifiably claim to be the world’s foremost market for retailer insurance
Initiatives in motor and household insurance make up almost 40% of all retailer programs
Much activity is concentrated among department stores, cash and carry chains and supermarkets
Around the world, retailers utilize a diverse range of operating models for selling insurance
By the end of 2010, underwriting joint ventures will be present in France, India and the UK - with insurers classifiable as captive underwriters visible in a broader range of countries
The evidence of consumer research in the UK
Supermarkets and other retailers in the UK wield most influence in pet insurance - and they are also active as distributors for many other types of policy - although their future prospects appear to vary from one type of insurance to another - and the influence of online aggregators has altered the dynamics for selling motor insurance
3.0 ARGENTINA
Introduction
Insurance
Falabella is seeking to grow its book of insurance policyholders in Argentina - both for mainstream insurance policies and for niche forms of insurance and assistance
4.0 AUSTRALIA
Introduction
Insurance
Thus far, mainstream retail brands in Australia have chosen not to enter the insurance market - although two specialist distributors to rural clients are active in both insurance and banking
5.0 BELGIUM
Introduction
Insurance
Carrefour and Inter Partner Assistance collaborate for the sale of travel assistance policies
6.0 BRAZIL
Introduction
Insurance
Seven major retail chains in Brazil promote mainstream forms of insurance of the types researched
The activity of Lojas Riachuelo is assisted by a cardholder base numbering in excess of 15 million
The vast majority of other major retail brands in Brazil also possess their own payment cards
7.0 CANADA
Introduction
Insurance
Five retailing groups in Canada had developed insurance propositions by the first half of 2010
For regulatory reasons, the activities of the HBC Insurance Agency vary by region across Canada
Through PC Financial, the Loblaw Companies grouping is active in both insurance and banking
The insurance proposition of London Drug is limited to the states of Alberta and British Columbia
Retailer schemes are spread across a number of providers, including several specialist firms
8.0 CHILE
Introduction
Insurance
Many of Chile’s major retail groups have established captive insurance brokerages - with those of Cencosud and Falabella known to intermediate a substantial volume of policies
Several retailers have also introduced innovative niche insurance and assistance formulae
The insurance operations of major retail brands in Chile are supported by sister banking arms
The origins of Falabella’s involvement in Chile’s financial services arena date back to 1980
Cencosud’s Banco Paris saw its asset base shrink by over 15% during 2009
Over a half of transactions generated by Ripley’s payment card are due to Ripley’s own stores
9.0 COLOMBIA
Introduction
Insurance
Carrefour, Droguerías Cafam and Falabella are all active as distributors of insurance
10.0 CZECH REPUBLIC
Introduction
Insurance
A handful of Czech retailers have started offering mainstream insurance products
11.0 ECUADOR
Introduction
Insurance
Like comparable retail formats in Chile and Peru, Casa Tosi has begun selling insurance
12.0 ESTONIA
Introduction
Insurance
Stockmann has introduced accident and travel insurance in association with If P&C Insurance
13.0 FINLAND
Introduction
Insurance
Stockmann is also a pioneering protagonist in retailer insurance in Finland - having built a base of around 1.5 million customers carrying its loyalty card
14.0 FRANCE
Introduction
Insurance
Several major retail chains in France offer mainstream lines of insurance to their customers - with Carrefour likely to have established the largest portfolio of policyholders
Banque Casino has selected Groupama as its partner for non-life insurance policies
Banque Accord claimed in excess of six million customers worldwide by the middle of 2009
Over 80% of the staff of the S2P joint venture are deployed in Carrefour’s hypermarkets
15.0 GERMANY
Introduction
Insurance
Insurance sales through retailers take place in a climate of legal uncertainty
Retailers offer motor insurance more frequently than any other insurance product
Most retailers offering household insurance opt for single partnerships
hagebaumarkt co-operates with Victoria in the area of accident insurance
Travel insurance is offered less frequently by retailers than other insurance products
Ratio sells life insurance in collaboration with two major underwriters
16.0 HUNGARY
Introduction
Insurance
Four Hungarian retail chains are active in the distribution of mainstream insurance products
Providers include brokers such as April CEE Development and MAI Insurance Brokers
17.0 INDIA
Introduction
The Indian retail sector continues to growth at an extraordinary pace - although for foreign retail companies, India remains a difficult country to enter and traditional local vendors still account for the vast majority of total sales
Insurance
Several Indian retailers are involved in the marketing of mainstream insurance products
Apollo Munich Health is aiming for a market share of health insurance premiums of 5% by 2014
The Future Generali joint venture plans to expand distribution through retail brands during 2010
Religare Insurance Broking is one of India’s largest insurance brokers
Several other insurance firms working with retailers are themselves joint ventures
18.0 INDONESIA
Introduction
Since the opening of the retail sector in 1998 the market has seen intense competition
After having escaped the effects of the global recession, retailers look set for further growth
Insurance
Two major Indonesian retail brands have entered the mainstream insurance arena
19.0 IRELAND
Introduction
Insurance
Tesco collaborates with subsidiaries of Aviva for both motor insurance and life insurance
20.0 ITALY
Introduction
Insurance
Retailer provision of insurance in Italy is limited to special offers for loyalty card customers - although there are grounds for believing that it will develop beyond this in future
21.0 JAPAN
Introduction
Insurance
Insurance distribution schemes are in evidence among several major retailer brands in Japan - with activities in this arena usually co-ordinated through a captive broker or agency
AEON Insurance Service was created as a single insurance brokerage in February 2008
AEON, Rakuten and Seven & I Holdings have all developed mainstream banking entities
AEON Credit Service was originally founded in June 1981 - and had amassed total assets of ¥854.2 billion by the time of its most recent financial report
The company possesses over 20 million cardholders in total - and launched WAON, its own e-money currency, in April 2007
AEON Credit Service is active in eight other countries in the Asia Pacific region
Rakuten Bank is one of several fast-growing financial entities belonging to Rakuten
IY Card Service is the principal card issuing entity within Seven & I Holdings - and is responsible for managing the group’s nanaco e-money initiative
Seven Bank manages an extensive network of around 14,000 ATMs
22.0 MALAYSIA
Introduction
Insurance
Jusco is active in the promotion of both motor insurance and travel insurance
23.0 MEXICO
Introduction
Insurance
Whether measured by brands or groups, retailer insurance is an influential concept in Mexico
Banco Azteca has built up a network of more than 1,500 branches in under ten years
Seguros Azteca Daños, the non-life underwriter, experienced rapid growth in 2009
Banco Walmart is an even more recent venture than Banco Azteca
24.0 NETHERLANDS
Introduction
Insurance
Three Dutch retailers are using their brands to promote insurance products
25.0 NEW ZEALAND
Introduction
Insurance
One major retailer is active in the distribution of a number of mainstream insurance products
Sovereign and IAG New Zealand are the respective market leaders in life and non-life insurance
26.0 PERU
Introduction
Insurance
Four retailing groups are active as distributors in the Peruvian insurance sector - three of which benefit from the activities of captive banking operations
Selling through retail outlets adds up to an important marketing option for Interseguro
27.0 PORTUGAL
Introduction
Insurance
Four major retail brands in Portugal are being leveraged to promote insurance products
28.0 ROMANIA
Introduction
Insurance
Carrefour re-enters the insurance arena by means of a distribution tie with OttoBroker
29.0 RUSSIA
Introduction
Insurance
Several insurance marketing initiatives are visible among major Russian retail brands... although Finservice Bank, part-owned by Sedmoi Continent, has not yet entered this market
30.0 SINGAPORE
Introduction
Insurance
One major supermarket in Singapore offers three mainstream insurance products
31.0 SOUTH AFRICA
Introduction
Insurance
Six retailer groups are involved in the distribution of insurance in South Africa
Clicks offers a health insurance policy specifically designed for people who suffer from HIV
Life insurance products sold by South African retail brands are typically low value policies
Edgar Financial Services offers a range of insurance policies suited to the local market... with this activity managed by FG Financial Services in the case of the Foschini Group
Woolworths sold a controlling stake in its financial services entity to Absa Bank in 2008 ... helping the Barclays subsidiary to become the country’s second largest credit card issuer
Auto & General acts as both an underwriter and a broker
Hollard has identified retailers as a key driver for sales growth in South Africa
Guardrisk Insurance presents itself as the world’s leading ‘cell captive’ insurance group
32.0 SOUTH KOREA
Introduction
Insurance
Several major retail brands are involved in the distribution of insurance in South Korea
Dongbu has signed up two retail partners for the promotion of motor insurance
Homeplus has established relationships with two underwriters of health insurance
For life insurance, Lotte Mart collaborates with two external providers
33.0 SPAIN
Introduction
Insurance
Four major retailing groups are active in the distribution of insurance products
Seguros El Corte Inglés has built up a portfolio of more than 1.5 million policies
34.0 SWITZERLAND
Introduction
Insurance
Four significant retail chains in Switzerland are active in the distribution of insurance - including Fressnapf, which through epona is the only one to offer pet insurance
35.0 THAILAND
Introduction
The Thai retail sector is characterized by high degree of foreign penetration - but the regulatory and political situation continues to create uncertainty
Insurance
Both Carrefour and Tesco have launched an extensive range of insurance policies in Thailand
36.0 UK
Introduction
Insurance
As many as 25 major retail brands are involved in the promotion of insurance policies - with no clear consensus emerging with regards to the preferred operating model
Tesco is aiming to double its volume of customers with a motor or household policy
Tesco’s deal with Friends Provident is based on a simple, speedy application and quote process
As a result of its affinity broking activity, BDML Connect has become a significant competitor
Arguably, aggregators have made ‘brandassurance’ a less compelling concept than it once was
37.0 USA
Introduction
Insurance
A number of retail brands market motor, household, pet or life insurance to their customers
Kroger Personal Finance has been active in financial services, including insurance, since 2004
Retailers face the barrier of state-by-state regulation when it comes to selling insurance
GRAPHICS / TABLES:
Major retailers covered by the research segmented by category and by region
% of major retailers worldwide offering any form of mainstream insurance split by region, 2009 / 2010
% of major retailers worldwide offering any form of mainstream insurance split by country, 2009 / 2010
Overview of retailer provision of mainstream insurance in worldwide by type of policy, 2009 / 2010
% of major retailers worldwide offering any form of mainstream insurance by category of retailer, 2009 / 2010
% split of schemes for mainstream insurance offered by major retailers worldwide by operating model and region,2009 / 2010
% split of schemes for mainstream insurance offered by major retailers worldwide by operating model and region,2009 / 2010 (data)
Major retailers worldwide distributing motor insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing motor insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing motor insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing motor insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing household insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing household insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing household insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing accident insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing accident insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing dental insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing other health insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing other health insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing travel insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing travel insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing pet insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing pet insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing life insurance: operating models and partners, 2009 / 2010
Major retailers worldwide distributing life insurance: operating models and partners, 2009 / 2010 (continued)
Major retailers worldwide distributing life insurance: operating models and partners, 2009 / 2010 (continued)
% of consumers in the UK acquiring insurance through supermarkets and all other types of retailer combined,2009, 2007, 2005 and previous years compared (data)
Retailer provision of insurance in Argentina: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Argentina: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Australia: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Australia: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Belgium: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Belgium: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Brazil: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Brazil: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Canada: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Canada: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Chile: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Chile: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Colombia: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Colombia: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in the Czech Republic: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in the Czech Republic: provision rates, operating models and partner marketshares, 2009 / 2010
Retailer provision of insurance in Ecuador: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Ecuador: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Estonia: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Estonia: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Finland: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Finland: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in France: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in France: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Germany: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Germany: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Hungary: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Hungary: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in India: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in India: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Indonesia: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Indonesia: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Ireland: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Ireland: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Italy: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Italy: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Japan: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Japan: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Malaysia: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Malaysia: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Mexico: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Mexico: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in the Netherlands: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in the Netherlands: provision rates, operating models and partner market shares,2009 / 2010
Retailer provision of insurance in New Zealand: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in New Zealand: provision rates, operating models and partner market shares, 2009/ 2010
Retailer provision of insurance in Peru: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Peru: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Portugal: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Portugal: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Romania: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Romania: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Russia: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Russia: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Singapore: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Singapore: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in South Africa: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in South Africa: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in South Korea: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in South Korea: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Spain: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Spain: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in Switzerland: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Switzerland: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in Thailand: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in Thailand: provision rates, operating models and partner market shares, 2009 /2010
Retailer provision of insurance in the UK: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in the UK: provision rates, operating models and partner market shares, 2009 / 2010
Retailer provision of insurance in the USA: provision rates by type of insurance, 2009 / 2010
Retailer provision of insurance in the USA: provision rates, operating models and partner market shares, 2009 / 2010
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