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Bancassurance in Turkey: Life, Non-Life and Creditor Insurance
Finaccord, November 2011
PUBLICATION OVERVIEW
Finaccord’s report titled Bancassurance in Turkey: Life, Non-Life and Creditor Insurance is about the distribution of insurance products through banks and other lending institutions in Turkey.
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 34 organisations, it identifies 238 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 Turkey;
- 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 Turkey;
- 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 Turkey.
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
Investment-related life insurance and retirement savings
Insurance market size and growth
Contributions to individual pension contracts have grown rapidly since their introduction in 2003
Distribution share of banks
While already dominant, Turkish banks extended their distribution share in life insurance in 2010
Bancassurance provision rates, operating models and partnerships
Investment-related life insurance
Comparatively few Turkish banks distribute investment products in a life insurance ‘wrapper’
Vakif Emeklilik holds a distribution partnership with Tekstil Bank in addition to its parent Vakifbank
Banks with no arrangement for investment-related life insurance include several significant institutions
Retirement savings
More banks offer retirement savings products than investment-related life insurance
Several bank-owned pension companies also act as non-captive providers to separate banks...
... including Garanti Emeklilik ve Hayat as well as Anadolu Hayat Emeklilik and Vakif Emeklilik
Banks with no retirement savings proposition are generally smaller institutions
MetLife has entered into a 15-year distribution partnership with Denizbank
Performance of key bancassurance underwriters
Bank-owned captives and joint ventures accounted for over 80% of total life insurance in 2010
Protection-related life insurance
Insurance market size and growth
The value of Turkish protection-related life insurance is set to exceed EUR 1 billion in 2011
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Apart from Aviva, the most prominent underwriters for this product mainly act in a captive capacity
Banks with no arrangement for risk life insurance are mainly smaller institutions
Critical illness insurance
Over a third of banks and other lending institutions promote critical illness insurance
Income protection insurance
Comparatively few Turkish banking institutions promote income protection insurance
Accident and health insurance
Insurance market size and growth
The value of Turkey’s accident and health market exceeded EUR 1 billion for the first time in 2010
Distribution share of banks
Almost a half of accident insurance premiums are distributed through the bancassurance channel
Bancassurance provision rates, operating models and partnerships
Accident insurance
Accident policies are very frequently a component of the insurance offering of Turkish banks
In addition to its captive tie with Isbank, Anadolu is also used as one of several providers by two other banks
Ageas acquired a 31% stake in Aksigorta during the first quarter of 2011
MetLife has entered into a 15-year distribution partnership with Denizbank
Medical expenses insurance
Close to a half of banking institutions in Turkey sell medical expenses insurance
Both AXA and Eureko hold significant non-captive distribution partnerships in this field
Health / hospital cash plans
Comparatively few Turkish banking institutions promote health or hospital cash plans
Performance of key bancassurance underwriters
Bank-owned captives and joint ventures took over a quarter of personal accident insurance in 2010
Yapi Kredi Sigorta holds a market share in health insurance of close to 20%
Personal motor and household insurance
Insurance market size and growth
Household insurance makes up less than 10% of the combined total market
Distribution share of banks
Turkish banks prosper in property insurance but struggle to make headway in motor insurance
Bancassurance provision rates, operating models and partnerships
Personal motor insurance
Most banking institutions in Turkey have an arrangement in place for selling personal motor insurance
AXA has established exclusive or shared partnerships with as many as seven banks
In addition to Anadolu and Ziraat Sigorta, four other captive underwriters operate in this market
Household insurance
AXA’s drive to create bancassurance partnerships in Turkey is also evident in household insurance
Performance of key bancassurance underwriters
Bank-owned captives and joint ventures accounted for over a third of total motor insurance in 2010...
... and also took a very significant share of business in household insurance
Creditor insurance
Consumer lending market size and growth
Mortgage lending
Growth in Turkish mortgage lending balances accelerated in 2010
Non-mortgage lending
The non-mortgage consumer credit sector is also making strong progress
Credit and other pay later cards
Turkey’s market for credit and other pay later cards is one of the largest in Europe
Creditor insurance provision rates, operating models and partnerships
Creditor insurance linked to mortgages
Creditor insurance is sold by all Turkish banking institutions that also offer mortgages
The leading five underwriters are all captive or joint venture entities
Non-captive competitors include AXA, Chartis, Groupama, Isik and NEOVA
Creditor insurance linked to consumer finance
All but three entities offering non-mortgage loans have an arrangement for related creditor policies
By weighted share of partnerships, the top five insurers are the same as for mortgage-related cover
Creditor insurance linked to credit cards
Credit card payment protection insurance is available from ten out of 24 card issuers in Turkey
Creditor insurance risk coverage
Cover for temporary incapacity and unemployment is available from some but not all banks
Alternative distribution channels
Creditor insurance market size, growth and forecast
By 2015, Turkish creditor insurance may be worth over ten times its value in 2007
LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY
Overview of bancassurance provision rates for different types of insurance in Turkey, 2011
1.0 INTRODUCTION
Banks and other lending institutions in Turkey contacted by Finaccord, segmented by type
2.0 MARKET ANALYSIS
Gross written premiums for investment-related life insurance and retirement savings in Turkey, 2006-2010
Gross written premiums for investment-related life insurance and retirement savings in Turkey, 2006-2010 (data)
Distribution share of banks in life insurance and pensions in Turkey, 2009 and 2010 (data)
Bancassurance provision of investment-related life insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of retirement savings in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Market share in total life insurance of key bancassurance underwriters in Turkey, 2006-2010 (data)
Gross written premiums for protection-related life insurance in Turkey, 2006-2010
Gross written premiums for protection-related life insurance in Turkey, 2006-2010 (data)
Bancassurance provision of risk life insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of critical illness insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of income protection insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Gross written premiums for accident and health insurance in Turkey, 2006-2010
Gross written premiums for accident and health insurance in Turkey, 2006-2010 (data)
Distribution share of banks in total non-life, accident and health insurance in Turkey, 2009 and 2010 (data)
Bancassurance provision of accident insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of medical expenses insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of health / hospital cash plans in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Market share in personal accident insurance of key bancassurance underwriters in Turkey, 2006-2010 (data)
Market share in health insurance of key bancassurance underwriters in Turkey, 2006-2010 (data)
Gross written premiums for personal motor and household insurance in Turkey, 2006-2010
Gross written premiums for personal motor and household insurance in Turkey, 2006-2010 (data)
Distribution share of banks in total non-life, motor and property insurance in Turkey, 2008-2010 (data)
Bancassurance provision of personal motor insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Bancassurance provision of household insurance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Market share in total motor insurance of key bancassurance underwriters in Turkey, 2006-2010 (data)
Market share in household insurance of key bancassurance underwriters in Turkey, 2006-2010 (data)
Residential mortgage lending balances outstanding in Turkey (absolute and per capita), 2006-2010
Consumer non-mortgage lending balances outstanding in Turkey (absolute and per capita), 2006-2010
Credit and other pay later cards issued and per capita in Turkey, 2006-2010
Key data points for the consumer lending market in Turkey, 2006-2010
Provision of creditor insurance linked to mortgages in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Provision of creditor insurance linked to consumer finance in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Provision of creditor insurance linked to credit cards in Turkey, 2011: provision rate, operating models and weighted provider share of partnerships
Risk coverage of creditor insurance policies in Turkey, segmented by type of underlying product, 2011
Creditor insurance gross written premiums in Turkey, segmented by policy type, 2007, 2011 and 2015 (forecast)
Creditor insurance gross written premiums in Turkey, segmented by cover type, 2007, 2011 and 2015 (forecast)
Creditor insurance gross written premiums in Turkey segmented by policy and cover type, 2007, 2011 and 2015 (forecast) (data)
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