Research and Markets: Creditor Insurance in Eastern and South-Eastern Europe

DUBLIN--(BUSINESS WIRE)-- Research and Markets (http://www.researchandmarkets.com/research/694ec0/creditor_insurance) has announced the addition of the "Creditor Insurance in Eastern and South-Eastern Europe" report to their offering.

Creditor Insurance in Eastern and South-Eastern Europe offers uniquely detailed insights into the market for creditor insurance, sometimes also referred to as payment protection insurance or loan-related insurance, in eight countries. While creditor insurance was worth slightly over 400 million in gross written premiums in the region in 2006, including coverage for life and permanent disability as well as the temporary disability and unemployment elements, rapid growth in retail lending and credit card markets should see it develop quickly in future years. Indeed, with sustainable growth likely in many markets and with profit margins relatively high, creditor insurance remains an attractive business for both lending institutions and underwriters to cultivate. Drawing on the results of a survey of over 290 lending institutions in eight countries (Bulgaria, Croatia, Greece, Romania, Russia, Slovenia, Turkey and Ukraine), the report analyses the provision of creditor insurance by lending institutions, variances in provision by underlying lending product, operating models for provision of creditor insurance and partnership configurations. Moreover, the PartnerBASE database that accompanies the report details each of the c. 420 creditor insurance marketing initiatives traced by Finaccord. Together, the report and database will provide you with the definitive guide to current and future opportunities in creditor insurance in Eastern and South-Eastern Europe.

You may be able to use this report and the PartnerBASE that accompanies it in one or more of the following ways:

• appreciate the magnitude of the opportunity in creditor insurance in Eastern and South-Eastern Europe - this has the potential to develop rapidly in future years;
• assess the extent to which the provision of temporary incapacity and unemployment modules within creditor insurance policies is gaining ground in Eastern and South-Eastern Europe;
• identify partnership opportunities for creditor insurance and how these may differ between opportunities for administration and underwriting;
• understand the supply structure for creditor insurance in Eastern and South-Eastern Europe and whether specialists are winning business by virtue of their focused approach;
• gain insight into the presence in Eastern and South-Eastern Europe of leading creditor insurance market participants including AIG, Aviva, Cardif and Uniqa.

Key Topics:

0.0 EXECUTIVE SUMMARY

• Creditor insurance in Eastern and South-Eastern Europe is worth in excess of 400 million
• although Greece alone accounts for a significant proportion of this market total
• and the percentage attributable to policies covering temporary risks remains very low
• Most policies classifiable as creditor insurance possess relatively basic characteristics
• Even when adjusted for inflation, retail lending balances have been growing at a breakneck speed
• with the markets of Ukraine and Romania having made the most progress over the 2002-6 period
• Credit and other pay later cards, too, have accelerated to around 60 million in issue
• The supply structure for creditor insurance partnerships is generally fluid and fragmented
• although leading international specialists are beginning to establish a regional presence
• A number of factors will propel the regions creditor insurance market forwards in the future
• with more advanced policies backed up by improved cross-selling likely to be important features
• Consumer metrics gathered in Europes five largest markets may prove instructive in this respect

1.0 INTRODUCTION

• Rationale
• Mainstream bancassurance markets in Europe are comparatively well documented
• whereas creditor insurance is not for a variety of reasons
• Creditor insurance: a poorly understood third bancassurance market?
• Finaccord
• PartnerBASE
• Methodology
• The vast majority of lending institutions in the region are classifiable as banks
• Definitions

2.0 REGIONAL OVERVIEW

• Introduction
• Inflation rates
• Relatively high rates of inflation must be accounted for when analysing local lending markets
• Market analysis - lending
• In deflated terms, the regions combined market is growing at an average annual rate of 38.6%
• Romania and Ukraine achieve the highest deflated average annual growth in mortgage balances
• Russia overtakes Greece in 2005 to become the regions largest non-mortgage retail credit market
• Growth rates for total retail lending balances differ substantially from country to country
• Average retail lending balances per capita for the region reach a modest 713.0 in 2006
• with mortgage lending account for less than 50% of this figure
• Rapid growth in non-mortgage lending in Greece helps it to overtake Slovenia in per capita terms
• Non-mortgage credit declines as a proportion of total retail lending in all countries except Greece
• Turkey accounts for 54.1% of total credit and other pay later cards issued in the region in 2006
• with the rapidly growing Russian market likely to have overtaken the mature Greek market
• although cards issued in Turkey are at least double the number in Russia
• In terms of credit and other pay later cards per capita, Greece remains ahead of Turkey
• Market analysis - creditor insurance
• A lack of definitional clarity and a dearth of data make creditor insurance difficult to measure
• with other comparable forms of protection policy often marketed by lending institutions
• Broadly defined, the market is worth slightly in excess of 400 million in gross written premiums
• although only a small proportion is due to insurance for temporary incapacity and unemployment
• Mortgage-related policies represent the largest component of the market when defined broadly
• There is ample scope for creditor insurance to advance in Eastern and South-Eastern Europe
• especially given the known market size in more affluent European economies
• The use of multiple partners for creditor insurance is most widespread in Russia and Ukraine
• Consumer data - benchmarks from Europes five largest markets
• Mortgage borrowers are most likely to contract insurance to protect loan repayments
• Customers often protect their loan repayments indirectly through other types of protection policy
• Even in developed countries, only a minority of borrowers are insured against unemployment
• The original lending entities and card issuers are in pole position to cross-sell creditor insurance
• Most sales of creditor insurance are realised in a face-to-face environment
• and at the same time that the underlying lending facility is being arranged
• While some consumers find creditor insurance to be expensive, very few are totally dissatisfied

3.0 CREDITOR INSURANCE IN EASTERN AND SOUTH-EASTERN EUROPE

• Customer take-up rates
• Acquisition of creditor insurance is made compulsory by a majority of banks offering mortgages
• Competitor analysis - creditor insurance
• Most banks collaborate with a variety of insurers when it comes to sourcing creditor insurance
• although captive insurance entities are utilised in a minority of cases
• Several Ukrainian banks are tied to a single bancassurance partner
• and Uniqa Life may well become the preferred partner of Raiffeisen Bank Aval
• Future outlook
• For some years, the image of Ukraines insurance sector has been marred by prior mis-selling
• although development potential is now emerging, especially for the key 20-40 age bracket

For more information visit http://www.researchandmarkets.com/research/694ec0/creditor_insurance

Research and Markets
Laura Wood, Senior Manager
[email protected]
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716

Source: Research and Markets