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Bancassurance in Sweden: Life, Non-Life and Creditor
Finaccord, November 2011
PUBLICATION OVERVIEW
Finaccord’s report titled Bancassurance in Sweden: Life, Non-Life and Creditor Insurance is about the distribution of insurance products through banks and other lending institutions in Sweden.
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;
- creditor insurance for mortgages, consumer finance and credit cards.
Based on a survey of 48 organisations, it identifies 236 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.
REASONS TO BUY
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 Sweden;
- 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 Sweden;
- 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 Sweden.
0.0 EXECUTIVE SUMMARY
1.0 INTRODUCTION
What is this report about?
Distribution partnerships with banks and other lending institutions constitute the focus of this report
Rationale
Across Europe, over 80% of banking entities surveyed are active in this arena to one extent or another
Methodology
Survey of banks and other lending institutions
Market data
Definitions
Investment-related life insurance
Retirement savings
Risk life insurance
Critical illness insurance
Income protection insurance
Accident insurance
Health / hospital cash plans
Medical expenses insurance
Personal motor insurance
Household insurance
Creditor insurance
Mortgages, consumer finance and credit cards
Weighted provider share of partnerships
Operating models
Abbreviations and exchange rates
Finaccord
2.0 MARKET ANALYSIS
Banks and other lending institutions covered
Introduction to the banking sector
In 2011, SBAB received permission to commence banking operations
Swedbank either owns or co-operates closely with the majority of local savings banks
Sweden’s banking sector remains in relatively good health
Investment-related life insurance and retirement savings
Contributions to traditional and unit-linked capital insurance policies have caused the market to grow
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Investment-related life insurance
Captive subsidiaries of the large banks are dominant in this bancassurance sector...
... with only two product providers acting as non-captive partners
Banking entities with no involvement in this sector are mainly specialised lending institutions
Retirement savings
The partnerships for retirement savings are nearly identical to those for investment-related life insurance
Performance of key bancassurance underwriters
On a combined basis, bancassurers hold over 40% of Sweden’s total life insurance market
Protection-related life insurance
Insurance market size and growth
Gross written premiums for protection-related life insurance have declined consistently in recent years
A small but growing market exists for critical illness and income protection insurance
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Swedbank Försäkring is used as an exclusive provider by the majority of local savings banks...
... in a bancassurance market that is largely dominated by captive underwriters...
... albeit with one deal attributable to each of four non-captive competitors
Critical illness insurance
Only one banking institution markets any form of critical illness insurance
Income protection insurance
Provision rates for income protection insurance are almost as high as those for protection-related life cover
Cardif Nordic benefits from partnerships with Swedbank and most local savings banks
Most policies provide long-term cover paying up to 90% of the customer’s income in case of illness
Performance of key bancassurance underwriters
Accident and health insurance
Insurance market size and growth
The accident and health insurance market displays volatile characteristics...
... as a consequence of the impact of AFA Försäkring
However, many segments of this market, including children’s insurance, are growing quite strongly
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Accident insurance
Accident insurance is commonly marketed by banking institutions in Sweden
Two captives and three non-captives feature among the top five providers
Several banks offer specialised forms of accident insurance including children’s insurance...
... and policies specifically for pregnant women
Medical expenses insurance
Medical expenses insurance is rarely offered by Swedish banks...
Health / hospital cash plans
... and health / hospital cash plans are also not commonly available
Performance of key bancassurance underwriters
Personal motor and household insurance
Insurance market size and growth
The combined market achieved a significant increase in premiums in 2010
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Personal motor insurance
Folksam’sTre Kronor Försäkring holds a preferred partnership with Swedbank and local savings banks
Moderna Försäkringar has established a partnership with ICA Banken in addition to Nordea Bank
Household insurance
Partnerships in this bancassurance sector are largely similar to those for personal motor insurance...
... albeit If Skadeförsäkring picks up unique deals with SBAB Bank and Sparbanken Öresund
Performance of key bancassurance underwriters
Creditor insurance
Consumer lending market size and growth
Mortgage lending
Mortgage lending balances grew at a consistent rate between 2006 and 2010
Non-mortgage lending
... albeit non-mortgage lending barely grew at all
Credit and other pay later cards
Credit and other pay later cards issued exceeded the ten million threshold for the first time in 2010
Creditor insurance provision rates, operating models and partnerships
Captive underwriters owned by the largest banks are most prominent in this field...
...albeit Genworth Financial has established a number of significant relationships
Creditor insurance linked to consumer finance
Genworth Financial and Cardif Nordic are the leading product providers in this segment...
... although several other captive and non-captive specialists are also in evidence
Creditor insurance linked to credit cards
Four underwriting competitors are active in this market...
... albeit Marsh is prominent as a broker by virtue of its partnership with EnterCard
Creditor insurance risk coverage
The vast majority of creditor insurance policies in Sweden offer comprehensive cover
Alternative distribution channels
Borrowers can also acquire payment protection cover from a number of loan brokers
Creditor insurance market size, growth and forecast
While still quite robust, growth in the Swedish creditor insurance market will slow between 2011 and 2015
LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY
Overview of bancassurance provision rates for different types of insurance in Sweden, 2011
1.0 INTRODUCTION
Banks and other lending institutions in Sweden contacted by Finaccord, segmented by type
2.0 MARKET ANALYSIS
Gross written premiums for investment-related life insurance and retirement savings in Sweden, 2006-2010
Gross written premiums for investment-related life insurance and retirement savings in Sweden, 2006-2010 (data)
Bancassurance provision of investment-related life insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of retirement savings in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Market share in total life insurance of key bancassurance underwriters in Sweden, 2006-2010 (data)
Gross written premiums for protection-related life insurance in Sweden, 2006-2010
Gross written premiums for protection-related life insurance in Sweden, 2006-2010 (data)
Bancassurance provision of protection-related life insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Gross written premiums for accident and health insurance in Sweden, 2006-2010
Gross written premiums for accident and health insurance in Sweden, 2006-2010 (data)
Bancassurance provision of accident insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of medical expenses insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of health / hospital cash plans in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Gross written premiums for personal motor and household insurance in Sweden, 2006-2010
Gross written premiums for personal motor and household insurance in Sweden, 2006-2010 (data)
Bancassurance provision of personal motor insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of household insurance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Residential mortgage lending balances outstanding in Sweden (absolute and per capita), 2006-2010
Consumer non-mortgage lending balances outstanding in Sweden (absolute and per capita), 2006-2010
Credit and other pay later cards issued and per capita in Sweden, 2006-2010
Key data points for the consumer lending market in Sweden, 2006-2010
Provision of creditor insurance linked to mortgages in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Provision of creditor insurance linked to consumer finance in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Provision of creditor insurance linked to credit cards in Sweden, 2011: provision rate, operating models and weighted provider share of partnerships
Risk coverage of creditor insurance policies in Sweden, segmented by type of underlying product, 2011
Creditor insurance gross written premiums in Sweden, segmented by policy type, 2007, 2011 and 2015 (forecast)
Creditor insurance gross written premiums in Sweden, segmented by cover type, 2007, 2011 and 2015 (forecast)
Creditor insurance gross written premiums in Sweden segmented by policy and cover type, 2007, 2011 and 2015 (forecast) (data)
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