Presentation: Global Mobile Operator Strategies in Insurance and Assistance

© Finaccord Ltd., 2014 Web: www.finaccord.com, E-mail: info@finaccord.com
Global Mobile Operator Strategies in Insurance and Assistance
1
Global mobile operator strategies
in insurance and assistance
Latin America’s 5th Annual
Microinsurance Summit
10 March 2014

2
What topics does Finaccord cover?
Affinity and partnership marketing
Automotive financial services
Bancassurance: life, non-life and creditor insurance
Commercial non-life insurance brokers
Consumer intelligence
Extended warranties and insurance for white, brown and grey goods
Insurance and assistance linked to payment cards and bank accounts
Mobile gadget and phone insurance
Professional indemnity insurance
Retailer payments, banking, insurance and assistance
Road assistance
Small business insurance
Trade credit insurance
Travel insurance and assistance
For some topics, our coverage is already global (i.e. 40+ countries)

Global Mobile Operators:
Strategies in Payments, Banking,
Insurance and Assistance
• 2012 survey of global mobile network operators, conducted by Finaccord;
• 255 network brands, across 70 countries
• coverage of over 20 separate payment, banking, insurance and assistance
product categories
• aim: how do / can mobile operators generate revenues from financial
services?
3

Product categories investigated
• payments: contactless merchant payments; payments via bank
card / account; payments via mobile phone bill; payments via
network account; talktime / call credit transfer;
• banking: mobile banking (bank current accounts); credit cards (non-
virtual); prepaid cards (non-virtual); personal loans / micro-credits;
• insurance: mobile phone, mobile gadget, bill payment protection,
identity protection, motor, household, travel, accident, health, life;
• assistance: home, legal, medical, road.
4

5
Source: Finaccord Global Mobile Operators reports
Geographical segmentation of
mobile operator brands researched
E&S-E Europe, 33
N&C Europe, 35
S&W Europe, 28
Africa & Middle East, 50
Asia-Pacific, 69
Latin America, 27
North America, 13

6
Multinational telecoms groups with five or
more wholly- or partially-owned subsidiary
brands covered by the research
Number of
subsidiaries
Vodafone
Telefónica
France Télécom
Deutsche Telekom
América Móvil
Hutchison Whampoa
Telenor
TeliaSonera
Etisalat
Qtel
Bharti Airtel
Singapore Telecommunications
Telekom Austria
VimpelCom
23
14
12
10
8
8
8
7
6
6
5
5
5
5

7
Mobile operator brands surveyed in Latin America
Country Brand
Subscribers
(millions)
Country Brand
Subscribers
(millions)
Uruguay Ancel Peru Movistar
Argentina Claro Uruguay Movistar
Brazil Claro Brazil NEXTEL
Chile Claro Mexico NEXTEL
Ecuador Claro Peru NEXTEL
Peru Claro Brazil Oi
Colombia Comcel Argentina Personal
Chile Entel Paraguay Personal
Mexico Iusacell Mexico Telcel
Argentina Movistar Colombia Tigo
Chile Movistar Paraguay Tigo
Colombia Movistar Brazil TIM
Ecuador Movistar Brazil Vivo
Mexico Movistar
1.8
14.1
61.0
3.2
8.0
9.0
29.0
5.6
3.8
16.8
9.5
11.4
4.5
21.0
14.0
1.8
4.0
3.8
0.7
39.4
18.0
1.8
66.9
5.1
3.6
61.4
71.6

8
13.7%
22.4%
22.7%
22.4%
61.6%
27.1%
23.5%
5.9%
5.9%
1.6%
37.9%
28.9%
38.5%
43.2%
67.7%
36.5%
42.4%
19.6%
4.7%
1.2%
0% 20% 40% 60% 80% 100%
Contactless merchant payments
Payments via bank card / account
Payments via phone bill
Payments via network account
Talktime / call credit transfer
Mobile banking (bank current accounts)
Credit card (non-virtual)
Prepaid card (non-virtual)
Consumer finance / micro-credits
Miscellaneous payments / banking
Provision rates for payment and banking products:
all mobile operators surveyed worldwide
Unweighted provision rate
Weighted provision rate

9
0.0%
25.9%
14.8%
11.1%
70.4%
33.3%
59.3%
0.0%
22.2%
0.0%
0.0%
19.4%
2.8%
14.6%
72.7%
31.3%
76.1%
0.0%
9.8%
0.0%
0% 20% 40% 60% 80% 100%
Provision rates for payment and banking products:
mobile operators surveyed in Latin America

Comments about provision rates
for payment and banking products
• Talktime transfer remains the most popular form of mobile payment
– Usable with any handset since @1996
– Perfect product for under-served communities (works with
prepaid phones, works without mobile data connection)
10

11
36.1%
13.3%
4.3%
0.8%
0.8%
2.0%
9.4%
27.2%
13.4%
2.8%
0.8%
0.3%
15.3%
22.3%
0% 20% 40% 60% 80% 100%
Mobile phone insurance
Mobile gadget insurance
Bill payment protection insurance
Identity protection insurance / assistance
Motor insurance
Household insurance
Travel insurance / assistance
Provision rates for insurance and assistance products:
all mobile operators surveyed worldwide (1)

12
8.6%
3.1%
6.3%
5.9%
5.5%
10.2%
7.5%
6.7%
23.1%
4.4%
17.8%
4.0%
4.2%
18.2%
6.9%
7.5%
0% 20% 40% 60% 80% 100%
Accident insurance
Health insurance
Life insurance
Home assistance
Legal assistance
Medical assistance
Road assistance
Miscellaneous insurance / assistance
all mobile operators surveyed worldwide (2)

13
63.0%
25.9%
7.4%
0.0%
3.7%
3.7%
37.0%
63.6%
38.4%
13.4%
0.0%
0.7%
14.6%
31.6%
0% 20% 40% 60% 80% 100%
Identity protection insurance / assistance
Motor insurance
Household insurance
mobile operators surveyed in Latin America (1)

14
18.5%
7.4%
11.1%
48.1%
40.7%
48.1%
55.6%
40.7%
30.6%
16.5%
17.4%
31.4%
31.6%
47.2%
37.4%
33.6%
0% 20% 40% 60% 80% 100%
Accident insurance
Health insurance
Life insurance
Home assistance
Legal assistance
Medical assistance
Road assistance
Miscellaneous insurance / assistance
Source: Finaccord Global Mobile Operators reportsSource: Finaccord Global Mobile Operators reports
mobile operators surveyed in Latin America (2)

15
• Mobile phone insurance (handset protection) is most popular
• Assistance packages are also widespread in Latin America
• Assistance products are becoming potentially significant for mobile
providers (especially where strong interaction with mobiles is
possible, such as with medical, road and travel assistance)
Comments about provision rates for
insurance and assistance products

16
Overview of provision rates for all payment, banking,
insurance and assistance products by region
0% 20% 40% 60% 80% 100%
E&S-E Europe
N&C Europe
S&W Europe
Africa & Middle East
Asia Pacific
Latin America
North America
All countries
Payment / banking alone
Insurance / assistance alone
None
T
Payment / banking and
insurance / assistance

17
Overview of provision rates for all payment and banking
products plus all insurance and assistance products apart
from mobile phone (handset) and gadget insurance by region
0% 20% 40% 60% 80% 100%
E&S-E Europe
N&C Europe
S&W Europe
Africa & Middle East
Asia Pacific
Latin America
North America
All countries
Payment / banking alone
Insurance / assistance alone
None
Payment / banking and
insurance / assistance

• Development of mobile payment and banking products is primary
activity for mobile operators
• Apart from mobile phone (handset) and gadget insurance, initiatives
in insurance and assistance tend to be secondary
18
Comments about overall provision rates

19
0% 20% 40% 60% 80% 100%
External partner
Multiple external partners
Captive partner
Joint venture partner
Internal
Other
Undisclosed
.
Operating models used for payment and banking
products: mobile operators surveyed worldwide

20
Comments about operating models
• Operating models vary by payment and banking product
• Apart from talktime / call credit transfer, external or non-internal
entities are often involved for other services
• Examples include Gemalto, MasterCard, Visa, Western Union etc.

21
Operating models used for insurance and assistance
products: mobile operators surveyed worldwide (1)
0% 20% 40% 60% 80% 100%
Identity protection insurance /
assistance
Motor insurance
Household insurance
External partner
Captive partner
Internal
Other
Undisclosed
[legend tricker]

22
Operating models used for insurance and assistance
products: mobile operators surveyed worldwide (2)
0% 20% 40% 60% 80% 100%
Accident insurance
Health insurance
Life insurance
Home assistance
Legal assistance
Medical assistance
Road assistance
Miscellaneous insurance /
assistance
Total
External partner
Captive partner
Internal
Other
Undisclosed
Series9
Source: Finaccord Global Mobile Operators reportsSource: Finaccord Global Mobile Operators reports

23
• External partnerships dominate, as few mobile operators maintain
captive insurance arms
• The few found tend to specialise in mobile phone (handset)
insurance
• Even mobile operators with captives (e.g. Telefónica, Vodafone)
maintain strong ties with external partners (e.g. ACE, Assurant)
Comments about operating models

24
The European experience: distribution
interfaces used for motor insurance
Source: Finaccord Aggregation Metrics report
0%
20%
40%
60%
80%
100%
Buyers in years
prior to 2012
Switchers and
new buyers,
2008
Switchers and
new buyers,
2012
T
Post
Outbound telephone
Inbound telephone
Online
Face-to-face

25
0% 20% 40% 60% 80% 100%
France
Germany
Italy
Poland
Spain
UK
Average
Laptop or desktop computer Tablet computer Mobile phone T
The European experience: devices
used to buy motor insurance online
Source: Finaccord Aggregation Metrics report

26
• The online channel has seen significant growth and use of mobile
devices to buy insurance online is likely to grow in future
• People are coming to the online channel through mobile devices,
not just ‘switching’ online interfaces
• Tablet costs are dropping and purchases are often viable among
lowest income bands
• Tablets (and smartphones) in many areas represent ‘device +
broadband’ (especially where fixed broadband access is limited)
Comments about the European
experience in motor insurance

27
Finaccord is a leading market research, publishing and consulting company specialising in financial
services. We provide our clients with insight with a particular focus on marketing and distribution
strategies, including affinity and partnership marketing.
Our areas of expertise include: affinity and partnership marketing; automotive financial services;
bancassurance; commercial non-life insurance brokers; consumer intelligence; extended warranties
and insurance for white, brown and grey goods; insurance and assistance linked to payment cards and
bank accounts; mobile gadget and phone insurance; professional indemnity insurance; retailer
payments, banking, insurance and assistance; road assistance; small business insurance; trade credit
insurance; and travel insurance and assistance.
Our international network of consultants is able to deliver information quickly and accurately across a
range of countries worldwide, basing research projects on robust data and knowledge.
Contact us
The Office Farringdon
24 Greville Street
London,
EC1N 8SS
Phone: +44 20 3178 2556
Fax: +44 20 7198 7902
Email: info@finaccord.com
www.finaccord.com

Presentation: Global Mobile Operator Strategies in Insurance and Assistance

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Presentation: Global Mobile Operator Strategies in Insurance and Assistance