Bancassurance in Chile: Life, Non-Life and Creditor Insurance

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Bancassurance in Chile: Life, Non-Life and Creditor Insurance
Published on October 2012

Report Summary

Bancassurance in Chile: Life, Non-Life and Creditor Insurance is a study and related PartnerBASE' dataset examining the provision of
life, non-life and creditor insurance by banks and other lending institutions in Chile.

Drawing on the results of a survey of 54 banking entities in Chile, the study verifies the percentage of organisations investigated that
distribute each of the following 13 types of insurance: accident insurance, creditor insurance related to consumer finance, creditor
insurance related to credit cards, creditor insurance related to mortgages, critical illness insurance, health / hospital cash plans,
household insurance, income protection insurance, investment-related life insurance, medical expenses insurance, personal motor
insurance, retirement savings, and risk life insurance.

For those banking entities that are active in one or more of these fields, the reports ascertain the operating models that they use to
source the type of insurance in question (e.g. external, joint venture or captive underwriters) and the identity of the specific providers
used. This information is then displayed in terms of the weighted share of partnerships of these providers, which takes into account
the number of retail customers of the partner banking entities, thus highlighting those insurance companies that hold the distribution
relationships that offer the most potential.

You may be able to use this report, plus the PartnerBASE' dataset and market data annexes that accompany it, in one or more of the
following ways:

- gain access to a source of information that provides a comprehensive overview of the provision of personal insurance products by all
significant banking entities in Chile;

- identify partnership opportunities for the same personal insurance products that may arise either because a banking institution is not
currently active or because there is scope for replacing an existing initiative;

- understand which underwriters and other product providers have been successful in establishing distribution relationships with the
most important banking entities in Chile;

- assess how the evolving regulatory environment may open up or block opportunities for your organisation to sell through the bank
distribution channel;

- appreciate the magnitude of the opportunity to sell personal insurance products through banks and other lending institutions in Chile.

Overall, in a market in which the distribution share of bancassurers in non-life insurance is higher than that in life insurance, across
the 54 banks and other lending institutions researched in Chile, Finaccord's research identified 241 bancassurance distribution
initiatives for the various types of insurance investigated.

Table of Content

Bancassurance in Chile: Life, Non-Life and Creditor Insurance (From Slideshare) Page 1/8


Table of Contents

Executive Summary
Introduction
Market Background
LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about'
Distribution partnerships with banks and other lending institutions constitute the focus of this report
Rationale
Bancassurance is one of the most important distribution channels for non-life insurance in Chile
Methodology
Survey of banks and other lending institutions
Market data
Definitions
Investment-related life insurance
Retirement savings
Risk life insurance
Critical illness insurance
Income protection insurance
Accident insurance
Health / hospital cash plans
Medical expenses insurance
Personal motor insurance
Household insurance
Creditor insurance
Mortgages, consumer finance and credit cards
Weighted provider share of partnerships
Operating models
Abbreviations and exchange rates
PartnerBASE' and market data annexe
Finaccord

2.0 MARKET BACKGROUND

Banks and other lending institutions covered
Economic background
Chile benefits from a diverse and export-driven economy'
'that has displayed strong GDP growth in recent years
Chile was well prepared for the onset of the financial crisis
The financial sector accounts for around 16% of GDP
In the Index of Economic Freedom, Chile is ranked seventh in the world
Introduction to the banking sector



In terms of number of retail customers, state-owned BancoEstado leads the market'
'albeit Banco Santander is ranked first by banking assets
Co-operative banks play a prominent role in the Chilean banking system'
'which also features a number of credit unions and retail sector card issuers
Several banking institutions are owned wholly or partly by foreign entities
Some merger and acquisition activity has taken place in recent years
Introduction to bancassurance
Bancassurance in Chile is well-developed, in particular for non-life insurance products'
'with captives and joint ventures among the largest underwriters in terms of premiums
Banking organisations are not allowed to sell investment-related life insurance products

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS

Insurance market size and growth
The market for retirement savings experienced rapid growth between 2008 and 2012
In this arena, the involvement of banks is limited to the sale of APVs
Distribution share of banks
Banks are not allowed to distribute investment-related life insurance
Bancassurance provision rates, operating models and partnerships
Investment-related life insurance
Retirement savings
Around one quarter of the banks surveyed in Chile offer retirement products'
...with all but one entity using a captive partner to provide AVPs
Performance of key bancassurance underwriters

4.0 PROTECTION-RELATED LIFE INSURANCE

Premiums for protection-related life cover decreased very slightly in real terms between 2008 and 2012...
... although it remains a much larger market than that for investment-related life insurance
Banks play an important role in the distribution of protection-related life insurance
Risk life insurance
Over half of Chile's banking institutions promote some form of risk life insurance
MetLife and BancoEstado signed a significant partnership agreement in 2004
Zurich and Santander entered into a 25-year strategic distribution arrangement in 2011
Banchile Seguros benefits from both captive and external partnerships
Cardif maintains distribution ties for risk life insurance with six entities
Critical illness insurance
Around one third of banking institutions surveyed are distributors of critical illness insurance
For this type of policy, five bank relationships were attributable to Cardif
Three captive underwriters are active in this market
Income protection insurance
Income protection insurance is rarely sold by banks and the few that do all use the same supplier
The combined market share of key underwriters increased slightly between 2007 and 2011



5.0 ACCIDENT AND HEALTH INSURANCE

Chile's market for health insurance has expanded rapidly in recent years
Accident insurance
Five banks offer accident insurance in conjunction with a joint venture underwriter
By weighted share of partnerships, MetLife is a sector leader thanks to its deal with BancoEstado
28 banking organisations have no apparent scheme in place for accident insurance
Medical expenses insurance
One provider holds a weighted share of bancassurance partnerships in excess of 50%
Health / hospital cash plans
Health or hospital cash plans are less commonly offered through banking organisations...
... with over 40 of the institutions researched having no involvement in this domain
Captives and joint ventures accounted for 15.8% of the total accident insurance market in 2011...
... and their influence in health insurance is even more visible

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE

Household insurance premiums experienced strong growth between 2008 and 2012
Personal accident insurance contracts for motorised vehicles are mandatory in Chile
Personal motor insurance
Over one third of the banking organisations researched offer personal motor insurance...
...with BCI Seguros ranked first among providers by weighted share of partnerships
Chilena Consolidada holds distribution agreements with six banking organisations...
... and RSA with four
Household insurance
The provision rate for household insurance is higher than that for personal motor insurance...
...and MAPFRE is the market leader in terms of weighted share of partnerships
ACE has established distribution partnerships with three banks for household insurance
BCI Seguros accounted for 18.2% of all premiums for motor insurance in 2011...
... although for fire insurance, Penta Security Seguros is the largest key bancassurance underwriter

7.0 CREDITOR INSURANCE

Consumer lending market size and growth
Mortgage lending
Chile's residential mortgage balances grew at a nominal annual rate of 9.2% between 2008 and 2012
Non-mortgage lending
The compound annual growth rate for non-mortgage balances is slightly lower than that for mortgages
Credit and other pay later cards
Card issuers owned by retail groups are dominant in the market for credit cards in Chile



Creditor insurance provision rates, operating models and partnerships
Creditor insurance linked to mortgages
Provision of creditor insurance by mortgage lending institutions is universal
By weighted share of partnerships, Cardif is the most prominent competitor...
'followed by four underwriters affiliated to Chile's largest banks
Creditor insurance linked to consumer finance
Loan payment protection insurance is offered by most lending institutions in Chile...
... with MetLife identifiable as the leading insurer in terms of weighted partnership share
MAPFRE has concluded a significant new distribution agreement with Genworth Financial
Banchile Seguros benefits from its various partnerships in this field with credit unions
Creditor insurance linked to credit cards
Schemes for credit card payment protection insurance are widespread in Chile
For this form of cover, six ties with banking organisations are attributable to Cardif...
... with MetLife also very prominent in this sphere
Creditor insurance risk coverage
The majority of creditor insurance policies incorporate comprehensive coverage
Subsidiaries of banks accounted for over 62% of the creditor life insurance market in 2011'
'with Zurich Santander Seguros leading the market
Cardif and MetLife are the most prominent non-captive underwriters for creditor insurance
Creditor insurance market size, growth and forecast
The total creditor insurance market is likely to be worth more than USD 700 million in 2012...
... with increased mortgage lending expected to boost premiums further up to 2016
Official statistics exist to help quantify the market for creditor insurance in Chile

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY
Overview of bancassurance provision rates for different types of insurance in Chile, 2012
1.0 INTRODUCTION
Banks and other lending institutions in Chile contacted by Finaccord, segmented by type
2.0 MARKET BACKGROUND
Key economic indicators for Chile, 2012
3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS
Gross written premiums for investment-related life insurance and retirement savings in Chile, 2008 to 2012
Gross written premiums for investment-related life insurance and retirement savings in Chile, 2008 to 2012 (data)
Bancassurance provision of retirement savings in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
4.0 PROTECTION-RELATED LIFE INSURANCE
Gross written premiums for protection-related life insurance in Chile, 2008 to 2012
Gross written premiums for protection-related life insurance in Chile, 2008 to 2012 (data)
Bancassurance provision of risk life insurance in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Bancassurance provision of critical illness insurance in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Bancassurance provision of income protection insurance in Chile, 2012: provision rate, operating models and weighted provider share
of partnerships
Market share in total life insurance of key bancassurance underwriters in Chile, 2007 to 2011



5.0 ACCIDENT AND HEALTH INSURANCE
Gross written premiums for accident and health insurance in Chile, 2008 to 2012
Gross written premiums for accident and health insurance in Chile, 2008 to 2012 (data)
Bancassurance provision of accident insurance in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Bancassurance provision of medical expenses insurance in Chile, 2012: provision rate, operating models and weighted provider
share of partnerships
Bancassurance provision health / hospital cash plans in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Market share in accident insurance of key bancassurance underwriters in Chile, 2007 to 2011
Market share in health insurance of key bancassurance underwriters in Chile, 2007 to 2011
6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE
Gross written premiums for personal motor and household insurance in Chile, 2008 to 2012
Gross written premiums for personal motor and household insurance in Chile, 2008 to 2012 (data)
Bancassurance provision of personal motor insurance in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Bancassurance provision of household insurance in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Market share in motor insurance of key bancassurance underwriters in Chile, 2007 to 2011
Market share in fire insurance of key bancassurance underwriters in Chile, 2007 to 2011
7.0 CREDITOR INSURANCE
Residential mortgage lending balances outstanding in Chile (absolute and per capita), 2008 to 2012
Consumer non-mortgage lending balances outstanding in Chile (absolute and per capita), 2008 to 2012
Credit and other pay later cards issued and per capita in Chile, 2008 to 2012
Key data points for the consumer lending market in Chile, 2008 to 2012
Provision of creditor insurance linked to mortgages in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Provision of creditor insurance linked to consumer finance in Chile, 2012: provision rate, operating models and weighted provider
share of partnerships
Provision of creditor insurance linked to credit cards in Chile, 2012: provision rate, operating models and weighted provider share of
partnerships
Risk coverage of creditor insurance policies in Chile, segmented by type of underlying product, 2012
Market share in creditor insurance of key bancassurance and other underwriters in Chile, 2007 to 2011
Creditor insurance gross written premiums in Chile, segmented by policy type, 2008, 2012 and 2016
Creditor insurance gross written premiums in Chile, segmented by cover type, 2008, 2012 and 2016
Creditor insurance gross written premiums in Chile, segmented by policy and cover type, 2008, 2012 and 2016 (data)


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