Consumer Approaches to Payment Protection Insurance linked to Personal Loans and Consumer Credit in Europe

Table of Contents

0.0 EXECUTIVE SUMMARY

• Borrowers in Italy are least likely to have insured their loan payments in some shape or form
• ... while those in Germany are most likely to use policies other than loan payment insurance
• Cover in the event of temporary incapacity is most commonly purchased by UK borrowers
• ... while protection for unemployment is least frequently held by their counterparts in Italy
• German borrowers are most likely to acquire ins. from a source other than the original lender
• ... and respondents in the UK are most inclined to utilise a remote distribution interface
• The shorter duration of non-mortgage loans restricts the potential for retrospective cross-selling
• UK borrowers express the least satisfaction with the ins. that they have bought in this context

1.0 INTRODUCTION

• Finaccord
• European consumer research
• Creditor insurance
• Mobile telephone insurance
• Travel insurance
• European market, partnership and bancassurance research
• Research rationale
• Mainstream bancassurance markets are comparatively well documented
• ... whereas creditor insurance is not
• Creditor insurance: a poorly understood "third" bancassurance market?
• The Creditor Metrics series offers vital benchmarking data for lending insts. and underwriters
• Research methodology
• The research embraces a total of over 6,250 respondents across the five countries
• Research strengths and weaknesses
• A mixed Internet and telephone research methodology produces balanced results
• ... that offer a representative picture of consumers with at least one lending product

2.0 EUROPEAN OVERVIEW

• Introduction
• % of resps. holding a personal loan, consumer credit or car finance contract
• Respondents in France and the UK are most likely to possess a non-mortgage loan
• % of resps. with insurance that protects their non-mortgage loan payments
• Italian borrowers are least likely to have bought insurance to protect loan payments
• Attitudes towards ins. protecting non-mort. loans of resps. without cover
• UK borrowers are most likely to perceive this form of insurance as being too expensive
• Types of insurance used by resps. to protect non-mortgage loan payments
• Slightly over a third of insured borrowers in Germany use a loan payment protection policy only
• Risks covered by ins. used by resps. to protect non-mort. loan payments
• Borrowers reporting cover for temporary incapacity are most numerous in the UK
• ... while those in Italy are least likely to be have acquired protection for unemployment
• Insurance used to protect non-mort. loan payments - distribution channels
• The distribution share of the original lenders is strongest in France
• Insurance used to protect non-mort. loan payments - distribution interfaces
• UK borrowers are most inclined to buy this form of insurance through a remote interface
• Insurance used to protect non-mort. loan payments - point in time obtained
• Simultaneous sales of insurance to protect non-mortgage loans are highest in France
• ... while the potential for re-solicitation is apparently highest in Germany
• Attitudes towards insurance protecting non-mort. loans of resps. with cover
• Italian borrowers are most likely to express total satisfaction with this form of insurance

3.0 FRANCE

• Introduction
• Research sample
• The research embraces a total of 1,232 respondents in France
• % of resps. holding a personal loan, consumer credit or car finance contract
• % of resps. with insurance that protects their non-mortgage loan payments
• Attitudes towards insurance protecting loans of respondents without cover
• Types of insurance used by resps. to protect non-mortgage loan payments
• Risks covered by insurance used by respondents to protect loan payments
• Insurance used to protect non-mort. loan payments - distribution channels
• Insurance used to protect non-mort. loan payments - distribution interfaces
• Insurance used to protect non-mort. loan payments - point in time obtained
• Attitudes towards insurance protecting loans of respondents with cover

4.0 GERMANY

• Introduction
• Research sample
• The research embraces a total of 1,210 respondents in Germany
• % of resps. holding a personal loan, consumer credit or car finance contract
• % of resps. with insurance that protects their non-mortgage loan payments
• Attitudes towards insurance protecting loans of respondents without cover
• Types of insurance used by resps. to protect non-mortgage loan payments
• Risks covered by insurance used by respondents to protect loan payments
• Insurance used to protect non-mort. loan payments - distribution channels
• Insurance used to protect non-mort. loan payments - distribution interfaces
• Insurance used to protect non-mort. loan payments - point in time obtained
• Attitudes towards insurance protecting loans of respondents with cover

5.0 ITALY

• Introduction
• Research sample
• The research embraces a total of 1,222 respondents in Italy
• % of resps. holding a personal loan, consumer credit or car finance contract
• % of resps. with insurance that protects their non-mortgage loan payments
• Attitudes towards insurance protecting loans of respondents without cover
• Types of insurance used by resps. to protect non-mortgage loan payments
• Risks covered by insurance used by respondents to protect loan payments
• Insurance used to protect non-mort. loan payments - distribution channels
• Insurance used to protect non-mort. loan payments - distribution interfaces
• Insurance used to protect non-mort. loan payments - point in time obtained
• Attitudes towards insurance protecting loans of respondents with cover

6.0 SPAIN

• Introduction
• Research sample
• The research embraces a total of 1,250 respondents in Spain
• % of resps. holding a personal loan, consumer credit or car finance contract
• % of resps. with insurance that protects their non-mortgage loan payments
• Attitudes towards insurance protecting loans of respondents without cover
• Types of insurance used by resps. to protect non-mortgage loan payments
• Risks covered by insurance used by respondents to protect loan payments
• Insurance used to protect non-mort. loan payments - distribution channels
• Insurance used to protect non-mort. loan payments - distribution interfaces
• Insurance used to protect non-mort. loan payments - point in time obtained
• Attitudes towards insurance protecting loans of respondents with cover

7.0 UNITED KINGDOM

• Introduction
• Research sample
• The research embraces a total of 1,340 respondents in the UK
• % of resps. holding a personal loan, consumer credit or car finance contract
• % of resps. with insurance that protects their non-mortgage loan payments
• Attitudes towards insurance protecting loans of respondents without cover
• Types of insurance used by resps. to protect non-mortgage loan payments
• Risks covered by insurance used by respondents to protect loan payments
• Insurance used to protect non-mort. loan payments - distribution channels
• Insurance used to protect non-mort. loan payments - distribution interfaces
• Insurance used to protect non-mort. loan payments - point in time obtained
• Attitudes towards insurance protecting loans of respondents with cover

GRAPHICS / TABLES

• Sample breakdown across five European countries by age group
• Sample breakdown across five European countries by annual household income
• % of respondents in five European countries holding a pers. loan / cons. cred., 2006
• % of resps. in five Euro. countries holding insurance that protects their pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects mort. payments of resps. in five Euro. countries without cover, 2006
• Types of insurance used by respondents in five Euro. countries to protect pers. loan / cons. cred. payments, 2006
• Risks cov. by ins. used by resps. in five Euro. counts. to protect mort. pays., 2006 (pen. among borrowers with ins.)
• Risks cov. by ins. used by resps. in five Euro. counts. to protect mort. pays., 2006 (pen. among all borrowers)
• Dist. channels used by resps. in five Euro. counts. to obt. ins. used to prot. pers. loan / cons. cred. payments, 2006
• Dist. interfaces used by resps. in five Eur. counts. to obt. ins. used to protect pers. loan / cons. cred. payments, 2006
• Point in time chs. by resps. in five Euro. counts. to obt. ins. used to prot. mortg. pays., 2006 (anal. for borrs. with ins.)
• Point in time chs. by resps. in five Euro. counts. to obt. ins. used to prot. mortg. pays., 2006 (analysis for all borrs.)
• % split of attitudes towards ins. that protects mort. payments of resps. in five European countries with cover, 2006
• Sample breakdown in France by age group, household income band and geographical location
• % of respondents in France holding a pers. loan / cons. cred., 2006
• % of respondents in France holding insurance that protects their pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. pays. of resps. in France without cover, 2006
• Types of insurance used by respondents in France to protect pers. loan / cons. cred. payments, 2006 (1)
• Types of insurance used by respondents in France to protect pers. loan / cons. cred. payments, 2006 (2)
• Risks covered by insurance used by respondents in France to protect pers. loan / cons. cred. payments, 2006
• Dist. channels used by resps. in France to obtain insurance used to protect pers. loan / cons. cred. payments, 2006
• Dist. interfaces used by resps. in France to obtain insurance used to protect pers. loan / cons. cred. payments, 2006
• Point in time chosen by resps. in France to obtain insurance used to protect pers. loan / cons. cred. payments, 2006
• % split of attitudes towards insu. that protects pers. loan / cons. cred. payments of resps. in France with cover, 2006
• Sample breakdown in Germany by age group, household income band and geographical location
• % of respondents in Germany holding a pers. loan / cons. cred., 2006
• % of respondents in Germany holding insurance that protects their pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. pays. of resps. in Germany without cover, 2006
• Types of insurance used by respondents in Germany to protect pers. loan / cons. cred. payments, 2006 (1)
• Types of insurance used by respondents in Germany to protect pers. loan / cons. cred. payments, 2006 (2)
• Risks covered by insurance used by respondents in Germany to protect pers. loan / cons. cred. payments, 2006
• Dist. channels used by resps. in Germany to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• Dist. interfaces used by resps. in Germany to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• Point in time chosen by resps. in Germany to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. pays. of resps. in Germany with cover, 2006
• Sample breakdown in Italy by age group, household income band and geographical location
• % of respondents in Italy holding a pers. loan / cons. cred., 2006
• % of respondents in Italy holding insurance that protects their pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. payments of resps. in Italy without cover, 2006
• Types of insurance used by respondents in Italy to protect pers. loan / cons. cred. payments, 2006 (1)
• Types of insurance used by respondents in Italy to protect pers. loan / cons. cred. payments, 2006 (2)
• Risks covered by insurance used by respondents in Italy to protect pers. loan / cons. cred. payments, 2006
• Distr. channels used by resps. in Italy to obtain insurance used to protect pers. loan / cons. cred. payments, 2006
• Dist. interfaces used by resps. in Italy to obtain insurance used to protect pers. loan / cons. cred. payments, 2006
• Point in time chosen by respondents in Italy to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. payments of resps. in Italy with cover, 2006
• Sample breakdown in Spain by age group, household income band and geographical location
• % of respondents in Spain holding a pers. loan / cons. cred., 2006
• % of respondents in Spain holding insurance that protects their pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. payments of resps. in Spain without cover, 2006
• Types of insurance used by respondents in Spain to protect pers. loan / cons. cred. payments, 2006 (1)
• Types of insurance used by respondents in Spain to protect pers. loan / cons. cred. payments, 2006 (2)
• Risks covered by insurance used by respondents in Spain to protect pers. loan / cons. cred. payments, 2006
• Dist. channels used by resps. in Spain to obtain insurance used to protect pers. loan / cons. cred. payments, 2006
• Dist. interfaces used by resps. in Spain to obtain insurance used to protect pers. loan / cons. cred. payments, 2006
• Point in time chosen by respondents in Spain to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. payments of resps. in Spain with cover, 2006
• Sample breakdown in the UK by age group, household income band and geographical location
• % of respondents in the UK holding a pers. loan / cons. cred., 2006
• % of respondents in the UK holding insurance that protects their pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. pays. of resps. in the UK without cover, 2006
• Types of insurance used by respondents in the UK to protect pers. loan / cons. cred. payments, 2006 (1)
• Types of insurance used by respondents in the UK to protect pers. loan / cons. cred. payments, 2006 (2)
• Risks covered by insurance used by respondents in the UK to protect pers. loan / cons. cred. payments, 2006
• Dist. channels used by resps. in the UK to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• Dist. interfaces used by resps. in the UK to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• Point in time chosen by resps. in the UK to obtain ins. used to protect pers. loan / cons. cred. payments, 2006
• % split of attitudes towards ins. that protects pers. loan / cons. cred. payments of resps. in the UK with cover, 2006