Consumer Approaches to Payment Protection Insurance linked to Credit Cards in Europe

Table of Contents

0.0 EXECUTIVE SUMMARY

• One in four French cardholders possess insurance that protects their card payments
• In all five counts., many cardholders do not use their card to borrow money or to defer payments
• German cardholders often insure their card payments indirectly through other protection policies
• Cover in the event of temp. incapacity is least commonly purchased by Spanish cardholders...
• ... while protection for unemployment is most frequently held by their counterparts in the UK
• In France, Italy and Spain, many cardholders believe that they are not paying for their insurance
• German borrowers are most likely to acquire ins. from a source other than the original issuer...
• ... and over 75% of respondents in the UK are prepared to utilise a remote distribution interface
• The success of paid-for policies in the UK enhances the volume of instant. sales of insurance
• UK and Spanish cardholders are most likely to cancel their ins. used to protect card payments

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 respondents holding a credit card
• Respondents in Germany are least likely to possess a credit card
• % of respondents with insurance that protects their credit card payments
• Insurance protecting credit card payments is most widely held by French consumers
• Attitudes towards insurance protecting credit cards of resps. without cover
• Many fail to buy because of objections concerning the expense or utility of the insurance
• Types of insurance used by resps. to protect credit card payments
• A high percentage of German cardholders use other policies to protect card payments
• Risks covered by insurance used by resps. to protect credit card payments
• Borrowers reporting cover for temporary incapacity are least numerous in Spain...
• ... while those in the UK are most likely to be have acquired protection for unemployment
• Insurance used to protect credit card payments - free and paid-for policies
• In France, Italy and Spain, many cardholders believe that their insurance is included for free
• Insurance used to protect credit card payments - distribution channels
• The distribution share of the original card issuers is weakest in Germany
• Insurance used to protect credit card payments - distribution interfaces
• Out-bound tele-marketing of insurance appears to have yielded the most success in Spain
• Insurance used to protect credit card payments - point in time obtained
• Simultaneous sales of insurance to protect credit card payments are weakest in Germany...
• ... although the potential for re-solicitation is apparently highest in Germany
• Attitudes towards insurance protecting credit cards of resps. with cover
• Cardholder enthusiasm for card payment protection insurance is weakest in the UK

3.0 FRANCE

• Introduction
• Research sample
• The research embraces a total of 1,232 respondents in France
• % of respondents holding a credit card
• % of respondents with insurance that protects their credit card payments
• Attitudes towards insurance protecting credit cards of resps. without cover
• Types of insurance used by respondents to protect credit card payments
• Risks covered by insurance used by resps. to protect credit card payments
• Insurance used to protect credit card payments - paid for and free policies
• Insurance used to protect credit card payments - distribution channels
• Insurance used to protect credit card payments - distribution interfaces
• Insurance used to protect credit card payments - point in time obtained
• Attitudes towards insurance protecting credit card of resps. with cover

4.0 GERMANY

• Introduction
• Research sample
• The research embraces a total of 1,210 respondents in Germany
• % of respondents holding a credit card
• % of respondents with insurance that protects their credit card payments
• Attitudes towards insurance protecting credit cards of resps. without cover
• Types of insurance used by respondents to protect credit card payments
• Risks covered by insurance used by resps. to protect credit card payments
• Insurance used to protect credit card payments - paid for and free policies
• Insurance used to protect credit card payments - distribution channels
• Insurance used to protect credit card payments - distribution interfaces
• Insurance used to protect credit card payments - point in time obtained
• Attitudes towards insurance protecting credit card of resps. with cover

5.0 ITALY

• Introduction
• Research sample
• The research embraces a total of 1,222 respondents in Italy
• % of respondents holding a credit card
• % of respondents with insurance that protects their credit card payments
• Attitudes towards insurance protecting credit cards of resps. without cover
• Types of insurance used by respondents to protect credit card payments
• Risks covered by insurance used by resps. to protect credit card payments
• Insurance used to protect credit card payments - paid for and free policies
• Insurance used to protect credit card payments - distribution channels
• Insurance used to protect credit card payments - distribution interfaces
• Insurance used to protect credit card payments - point in time obtained
• Attitudes towards insurance protecting credit card of resps. with cover

6.0 SPAIN

• Introduction
• Research sample
• The research embraces a total of 1,250 respondents in Spain
• % of respondents holding a credit card
• % of respondents with insurance that protects their credit card payments
• Attitudes towards insurance protecting credit cards of resps. without cover
• Types of insurance used by respondents to protect credit card payments
• Risks covered by insurance used by resps. to protect credit card payments
• Insurance used to protect credit card payments - paid for and free policies
• Insurance used to protect credit card payments - distribution channels
• Insurance used to protect credit card payments - distribution interfaces
• Insurance used to protect credit card payments - point in time obtained
• Attitudes towards insurance protecting credit card of resps. with cover

7.0 UNITED KINGDOM

• Introduction
• Research sample
• The research embraces a total of 1,340 respondents in the UK
• % of respondents holding a credit card
• % of respondents with insurance that protects their credit card payments
• Attitudes towards insurance protecting credit cards of resps. without cover
• Types of insurance used by respondents to protect credit card payments
• Risks covered by insurance used by resps. to protect credit card payments
• Insurance used to protect credit card payments - paid for and free policies
• Insurance used to protect credit card payments - distribution channels
• Insurance used to protect credit card payments - distribution interfaces
• Insurance used to protect credit card payments - point in time obtained
• Attitudes towards insurance protecting credit card of resps. 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 credit card, 2006
• % of respondents in five European countries holding insurance that protects their credit card 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 European countries to protect credit card 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)
• Seg. of ins. used by resps. in five Euro. counts. to protect credit card pays. between paid for and free policies, 2006
• Distribution channels used by resps. in five Euro. countries to obtain ins. used to protect credit card payments, 2006
• Distribution interfaces used by resps. in five Eur. countries to obtain ins. used to protect credit card 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 credit card, 2006
• % of respondents in France holding insurance that protects their credit card payments, 2006
• % split of attitudes towards insurance that protects credit card payments of resps. in France without cover, 2006
• Types of insurance used by respondents in France to protect credit card payments, 2006 (1)
• Types of insurance used by respondents in France to protect credit card payments, 2006 (2)
• Risks covered by insurance used by respondents in France to protect credit card payments, 2006
• Seg. of ins. used by resps. in France to protect credit card payments between paid for and free policies, 2006
• Distribution channels used by resps. in France to obtain insurance used to protect credit card payments, 2006
• Distribution interfaces used by resps. in France to obtain insurance used to protect credit card payments, 2006
• Point in time chosen by respondents in France to obtain insurance used to protect credit card payments, 2006
• % split of attitudes towards insurance that protects credit card 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 credit card, 2006
• % of respondents in Germany holding insurance that protects their credit card payments, 2006
• % split of attitudes towards insurance that protects credit card payments of resps. in Germany without cover, 2006
• Types of insurance used by respondents in Germany to protect credit card payments, 2006 (1)
• Types of insurance used by respondents in Germany to protect credit card payments, 2006 (2)
• Risks covered by insurance used by respondents in Germany to protect credit card payments, 2006
• Seg. of ins. used by resps. in Germany to protect credit card payments between paid for and free policies, 2006
• Distribution channels used by resps. in Germany to obtain insurance used to protect credit card payments, 2006
• Distribution interfaces used by resps. in Germany to obtain insurance used to protect credit card payments, 2006
• Point in time chosen by respondents in Germany to obtain insurance used to protect credit card payments, 2006
• % split of attitudes towards insurance that protects credit card payments 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 credit card, 2006
• % of respondents in Italy holding insurance that protects their credit card payments, 2006
• % split of attitudes towards insurance that protects credit card payments of resps. in Italy without cover, 2006
• Types of insurance used by respondents in Italy to protect credit card payments, 2006 (1)
• Types of insurance used by respondents in Italy to protect credit card payments, 2006 (2)
• Risks covered by insurance used by respondents in Italy to protect credit card payments, 2006
• Seg. of ins. used by resps. in Italy to protect credit card payments between paid for and free policies, 2006
• Distribution channels used by resps. in Italy to obtain insurance used to protect credit card payments, 2006
• Distribution interfaces used by resps. in Italy to obtain insurance used to protect credit card payments, 2006
• Point in time chosen by respondents in Italy to obtain insurance used to protect credit card payments, 2006
• % split of attitudes towards insurance that protects credit card 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 credit card, 2006
• % of respondents in Spain holding insurance that protects their credit card payments, 2006
• % split of attitudes towards insurance that protects credit card payments of resps. in Spain without cover, 2006
• Types of insurance used by respondents in Spain to protect credit card payments, 2006 (1)
• Types of insurance used by respondents in Spain to protect credit card payments, 2006 (2)
• Risks covered by insurance used by respondents in Spain to protect credit card payments, 2006
• Seg. of ins. used by resps. in Spain to protect credit card payments between paid for and free policies, 2006
• Distribution channels used by resps. in Spain to obtain insurance used to protect credit card payments, 2006
• Distribution interfaces used by resps. in Spain to obtain insurance used to protect credit card payments, 2006
• Point in time chosen by respondents in Spain to obtain insurance used to protect credit card payments, 2006
• % split of attitudes towards insurance that protects credit card 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 credit card, 2006
• % of respondents in the UK holding insurance that protects their credit card payments, 2006
• % split of attitudes towards insurance that protects credit card payments of resps. in the UK without cover, 2006
• Types of insurance used by respondents in the UK to protect credit card payments, 2006 (1)
• Types of insurance used by respondents in the UK to protect credit card payments, 2006 (2)
• Risks covered by insurance used by respondents in the UK to protect credit card payments, 2006
• Seg. of ins. used by resps. in the UK to protect credit card payments between paid for and free policies, 2006
• Distribution channels used by resps. in the UK to obtain insurance used to protect credit card payments, 2006
• Distribution interfaces used by resps. in the UK to obtain insurance used to protect credit card payments, 2006
• Point in time chosen by respondents in the UK to obtain insurance used to protect credit card payments, 2006
• % split of attitudes towards insurance that protects credit card payments of resps. in the UK with cover, 2006