Abstract
Finaccord' s report titled Creditor Metrics: Consumer Approaches to Payment
Protection Insurance linked to Credit Cards in Europe, is based on a survey,
carried out by Internet and telephone, of over 6,500 consumers in five major
European markets, all of whom possess at least one of a mortgage, a personal
loan, consumer credit contract, car finance or leasing agreement, or credit
card.
It provides data and analysis that will help banking institutions, insurance
companies and other interested parties to understand the overall
characteristics of the market for insurance linked to credit cards and to
benchmark their own performance in cross-selling these products. The following
are some of the key findings from the report, published on 20th August 2006:
One in four French cardholders possess insurance that protects their card
payments
- when asked whether they possess one or more insurance policies that
protects them in the event that they cannot pay the balance borrowed through
their credit card, cardholders in France are most likely to do so with 40.0%
of cardholders claiming to hold insurance as opposed to a low of 19.3% in
Italy;
- for the same question, intermediate data points of 22.6%, 25.0% and 25.2%
are registered for Germany, Spain and the UK, respectively;
- in essence, these figures represent the percentage of respondents that has
made a conscious decision to protect their card payments through insurance -
however, it probably excludes a number of respondents who hold an insurance
policy oriented towards personal protection (eg. life insurance) but who do
not consider that this is specifically covering their card payments;
In all five countries, many cardholders do not use their card to borrow money
or to defer payments
- among cardholders who consider that their card payments are uninsured, the
highest proportion in each country state that because they do not use the card
to borrow money or defer payments, they do not perceive much benefit in buying
this insurance, the exact percentages being 43.9% in France, 43.5% in Germany,
30.3% in Italy, 32.8% in Spain and 39.1% in the UK;
- once these cardholders have been excluded, among those lacking insurance
who do use the card to borrow money or defer payments, Spanish respondents are
most likely to state that they see the benefit but have not yet got round to
buying insurance while those in France are most likely to venture that they
see the benefit but find the insurance to be too expensive;
- in contrast, in Germany, Italy and the UK, among the same constituency of
cardholders lacking insurance but who do use their card to borrow money or
defer payments, the highest percentage respond that they do not perceive much
benefit in buying this insurance;
- nevertheless, a key finding is that with the exception of the UK, where
the percentage is just 6.8%, between 15% and 30% of respondents lacking
insurance do so purely because they have not yet got round to buying a policy
to protect their credit cards payments rather than because they have any
fundamental objection;
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