Finaccord' s report titled Non-Life Bancassurance in Europe: Motor and Household Insurance is the first ever dedicated study of the distribution of motor and household insurance by European retail banks. The research is based on a survey of 670 retail banks and other lending institutions serving consumers in ten territories in Europe: Austria, Belgium, France, Germany, Italy, the Netherlands, the Nordic region (comprising Denmark, Norway and Sweden), Portugal, Spain and the UK / Republic of Ireland.

By means of this investigation, the report sheds unprecedented light on the extent of involvement of banks across Europe in the distribution of motor and household insurance, clarifies the operating models that they use to compete in this market and identifies the external underwriters and brokers with which they work to source motor and household insurance where they are not using a captive or joint venture underwriting entity or internal brokerage unit.

Moreover, the PartnerBASE™ database which accompanies the publication offers a thorough means of researching current practice in bank-oriented distribution of motor and household insurance on a bank-by-bank, country-by-country or product-by-product basis. As such, this report and the associated PartnerBASE™ database constitute the most detailed research into the strategy of banks in motor and household insurance that has ever been completed on a published basis at the pan-European level.

0.0 EXECUTIVE SUMMARY

• Combined, personal motor and household premiums were worth €108.0 billion in 2005
• ... with over 40% of banks active in motor insurance and over 60% in household insurance
• The least developed non-life bancassurance markets are Italy and Sweden
• German banks continue to display an overwhelming preference for tied agency distribution
• Use of brokerage models is fairly common in Austria, the Netherlands, Spain and the UK / Ireland
• Joint ventures for motor and house. policies are most in evidence in France and the Netherlands
• Austria: Wüstenrot Versicherung is the largest of the country' s bank-owned underwriters
• Belgium: bank-owned insurers make important advances in both motor and household insurance
• France: entry into non-life insurance of La Banque Postale could boost the share of bancassurers
• Germany: the ossified nature of distribution partnerships may be stifling innovation
• Italy: although keen to grow in non-life ins., Italian banks may continue to shun motor insurance
• Netherlands: ABN AMRO Schadeverzekering has developed rapidly in recent years
• Nordic region: the launch of Tre Kronor Försäkring in Sweden may help bancass. to develop
• Portugal: bank-owned insurers account for more than 60% of total non-life insurance premiums
• Spain: banks increasingly demonstrate a preference for brokerage or quasi-brokerage models
• UK / Ireland: the captives of HBOS and Royal Bank of Scotland are notable for their innovation
• For a number of reasons, many banks punch below their weight in motor and house.insurance
• ... although they can potentially turn growth in cons. use of remote channels to their advantage
• Growth in web-based aggregators, brokers and price comp. services presents a new challenge

1.0 INTRODUCTION

• Finaccord
• Creditor insurance
• Mobile telephone insurance
• Travel insurance
• PartnerBASE™
• Rationale
• The advance of banks in life insurance and retirement savings is amply documented...
• ... although this report offers the first in-depth review of activity in motor and household insurance
• Methodology
• The research is based on a sample of 680 banks serving retail customers

2.0 EUROPEAN OVERVIEW

• Introduction
• Market size and segmentation
• Growth in house. insurance exceeds that for personal motor insurance between 2001 and 2005
• Gross written premiums for personal motor insurance advance most rapidly in the Nordic region
• Household insurance in Italy is worth less than in the Netherlands, the Nordic region and Spain
• Penetration rates
• Personal motor insurance
• Many small and medium-sized banks in Austria, Germany and Spain promote motor insurance...
• Household insurance
• ... and banks in Italy and the UK display much greater enthusiasm for marketing house. policies
• Operating models
• Personal motor insurance
• Use of single, external partners for personal motor insurance is most widespread in Germany...
• ... while several of the major networks in Belgium, France and the N' lands use captive entities
• Household insurance
• Generally, banks are more likely to use captive or joint venture underwriters for household risks

3.0 AUSTRIA

• Introduction to the banking sector
• The Austrian retail banking market remains comparatively fragmented
• Bank Austria Creditanstalt serves 1.8 million customers in its domestic market
• The Austrian Federation of Trade Unions assumed 100% ownership of BAWAG PSK in 2004
• Like its rivals, Erste Bank has ambitious growth plans in Central and Eastern Europe
• RZB ultimately supports 571 autonomous local credit co-operatives
• Many other banks operate at a local or regional level within Austria...
• ... including several institutions whose primary focus lies on retail lending
• Market overview
• Household insurance gross written premiums exceed €1 billion for the first time in 2005
• Bancassurance
• Taken at face value, Austrian banks appear to have had limited success in non-life insurance...
• ... although much of their business is intermediated by internal and external brokers
• Survey results
• Motor insurance
• Over half of Austrian banks offering motor pols. work with a single, external partner in this field...
• ... although several of the country' s major banking groups possess their own internal brokerage
• Household insurance
• Sparkassen Versicherung is the main provider of household insurance to Austria' s savings banks
• Competitor analysis
• Both Raiffeisen Versicherung and Porsche Versicherung achieve strong premium growth
• ... and Sparkassen Versicherung sees its market share for motor insurance rise to 0.68%

4.0 BELGIUM

• Introduction to the banking sector
• In spite of substantial restructuring, Belgium' s retail banking market remains crowded
• Dexia, Fortis, ING and KBC lead the way...
• ... although numerous medium-sized and small banking ventures challenge their dominance
• Market overview
• The combined market for personal motor and household insurance is worth over €3 billion
• Bancassurance
• Bank branches gain ground across most forms of non-life insurance in Belgium...
• ... and the share of bank-owned insurers in both motor and household insurance is substantial
• Survey results
• Motor insurance
• Ethias underwrites motor insurance for both Crédit Agricole and Dexia...
• ... while the other big three banking groups and Argenta Spaarbank utilise their captives
• Household insurance
• In some instances, the operating models and partnerships are different for household insurance
• Competitor analysis
• Belgium' s bank-owned insurance companies continue to make progress in non-life insurance

5.0 FRANCE

• Introduction to the banking sector
• Mutual and co-operative banks continue to play a substantial role in French retail banking...
• ... albeit merger and acquisition activity have changed the landscape in recent years
• Most foreign entrants fail to make significant headway in the problematic French market
• ... with Abbey, Egg and San Paolo IMI having all withdrawn completely
• Specialised lenders also play an important role in French retail banking...
• ... as do financial services firms belonging to some of the country' s largest retailing groups
• The Crédit Municipal institutions: specialising in low value loans charging low interest rates
• La Poste is playing an increasingly important part in the French retail financial services scene
• Market overview
• Household insurance outgrows personal motor insurance over the 2001-5 period
• Bancassurance
• French banks have achieved only modest growth in non-life insurance in more recent years
• Survey results
• Motor insurance
• All of the main retail banking networks are fully active in the motor insurance market...
• ... with many underwriting motor insurance policies through captive or joint venture entities
• ... although BNP Paribas is tied to Avanssur, a subsidiary of AXA, for this line of insurance
• Household insurance
• HSBC' s joint venture with Swiss Life is active in household insurance, but not motor insurance
• Home surveillance: a new bancassurance policy related to home ownership?
• Home surveillance is characterised by the provision of three main service elements...
• ... although to a considerable extent, the market is still in the process of being defined
• Financial institutions offer a logical route to market for home surveillance...
• ... and distribution partnerships, generally, constitute the key success factor
• Competitor analysis
• Almost all bank-owned insurers in France are expanding their share of non-life insurance...
• ... with Crédit Mutuel' s ACM Iard leading the way for motor insurance...
• ... and Crédit Agricole' s Pacifica for household insurance

6.0 GERMANY

• Introduction to the banking sector
• Commercial banks struggle in the face of savings bank and credit co-operative competition
• Germany' s savings banks: continuing adherence to public sector insurers remains the norm
• R&V is able to meet virtually all the insurance needs of credit co-operative customers
• Foreign entrants show that reasonable returns can be generated from German retail banking
• Germany' s crowded banking sector provides other feasible bancassurance opportunities
• Market overview
• Together, personal motor and house. insurance premiums grow at less than 1.0% per annum
• Bancassurance
• The distribution share of banks in total non-life insurance is unlikely to exceed 10%
• Survey results
• Motor insurance
• Almost two thirds of banks serving consumers offer motor insurance to their customers...
• ... with the vast majority of these acting as a tied agent for a single underwriting partner...
• ... a finding relevant to many private sector banks, as well as savings banks and co-operatives
• A minority of banking institutions have opted for alternative operating models
• Household insurance
• Penetration rates and operating models are broadly similar for household insurance
• Competitor analysis
• R&V Versicherung outgrows its public sector rivals by a considerable margin
• Direct Line expands its business although the pace of change in Germany is slow
• Irrespective of the channels used, it is difficult to advance rapidly in German motor insurance
• R&V Versicherung also outstrips most public sector underwriters in property insurance

7.0 ITALY

• Introduction to the banking sector
• Consolidation and rationalisation change the face of retail banking in Italy...
• ... with a fast-growing second tier of banks ready to challenge the big six groups
• Acquisitions by ABN AMRO and BNP Paribas open the way to further foreign entrants...
• ... although some have gained exposure already through joint ventures in consumer finance
• Smaller specialised lenders service the market for cessione del quinto loans
• Market overview
• The average annual growth rate for both personal motor and household insurance is 4.1%
• Bancassurance
• Italy' s non-life bancassurance channel shows stronger signs of development in 2005...
• ... although its aggregate distribution share is just 3.4% for property insurance
• Banks in Italy are likely to grow their distribution share of both motor and household insurance
• Survey results
• Motor insurance
• Many of the larger Italian banks have been reluctant to enter the motor insurance market...
• ... although Direct Line, Genertel and Zurich each lay claim to important, exc. partnerships...
• ... and several banks offer motor insurance policies through either joint ventures or captives
• Household insurance
• Over 60% of banking entities surveyed are active in distribution of household insurance...
• GPA Assiparos collaborates with Banca Intesa for many forms of non-life insurance
• Eurizon Tutela, a captive belonging to San Paolo IMI, also distributes through Bancoposta
• Credito Valtellinese and Veneto Banca have both developed an internal brokerage system
• Competitor analysis
• Banca Carige possesses the largest bank-owned non-life bancassurer in Italy...
• ... although smaller underwriters operating in this field are achieving more rapid growth
• In motor insurance, only Direct Line and BPB Assicurazioni make serious progress...
• ... although the development of bank-owned underwriters in property ins. is more promising

8.0 NETHERLANDS

• Introduction to the banking sector
• Three financial services giants dominate retail banking in the Netherlands...
• ... albeit a number of smaller institutions fulfil specialist roles in the Dutch market
• Market overview
• Gross written premiums for personal motor insurance in the Netherlands stagnate in 2005
• Bancassurance
• Bank branches distribute around 11.0% of all non-life insurance policies in the Netherlands
• Survey results
• Motor insurance
• Bank distribution of motor insurance is mainly restricted to the larger retail networks...
• ... with both ABN AMRO and Rabobank having sold a stake in captive insurers in recent times
• Household insurance
• Fortis Bank, ING Bank, Postbank and SNS Bank all use a captive model for household policies
• Competitor analysis
• Combined banking and insurance groups account for over 25% of total non-life premiums
• Most of the leading bank-owned underwriters are gaining market share in motor insurance...
• ... with ABN AMRO Schadeverzekering having doubled its market share in property insurance

9.0 NORDIC REGION

• Introduction to the banking sector
• Four pan-Scandinavian banking institutions battle against mainly smaller national competitors
• Danske Bank: the bank lays claim to 465 branches across its five main countries of operation
• Handelsbanken: expansion in the Nordic region achieved through org. growth and acquisitions
• Nordea: a leading financial services group in the Nordic and Baltic regions
• SEB: strategic acquisitions fuel expansion across Northern Europe
• Denmark: GE Money Bank and a series of smaller banks provide the competition
• Norway: Den norske Bank has shielded itself from takeover by merging with Gjensidige
• Sweden: FöreningsSparbanken lays claim to 4.1 million retail banking clients in Sweden...
• ... although the incumbents are being challenged by both retailer banks and foreign entrants
• Market overview
• The combined market for motor and household insurance climbs to €7.24 billion in 2005
• Bancassurance
• Non-life bancassurance is developed in Denmark and Norway in comparison to Sweden...
• ... although FöreningsSparbanken and the Swedish savings banks are stepping up their activity
• Survey results
• Motor insurance
• Few banks in Sweden have elected to enter the motor insurance sector thus far...
• ... although the expansion of Tre Kronor Försäkring promises to change the picture in future
• Codan' s Privatsikring collaborates for motor insurance with three smaller banks in Denmark...
• ... although it competes with several other insurance underwriters for bancassurance mandates
• Household insurance
• Sparbanken Nord' s link with Dina Förs. may change with the launch of Tre Kronor Försäkring
• Competitor analysis
• Topdanmark' s Danske Forsikring cedes market share of total non-life insurance in Denmark
• Terra Skadeforsikring comfortably outpaces Sparebank 1 Skadeforsikring, its larger rival

10.0 PORTUGAL

• Introduction to the banking sector
• Foreign entrants exert a strong influence of the development of the banking market...
• ... with many specialised lending firms belonging to overseas parents
• Market overview
• Household insurance gross premiums written in Portugal totalled just €253.9 million in 2005
• Bancassurance
• Portuguese bancassurance benefits from bank ownership of several of the largest insurers
• Survey results
• Motor insurance
• Motor insurance is provided by almost all of Portugal' s major retail banks...
• ... although few of the country' s specialised lending firms are active in this field
• Only AXA Seguros lays claim to more than one exclusive bancassurance relationship
• Millennium BCP is now classifiable as a joint venture following the sale of a 50% stake to Fortis
• Household insurance
• Over 50% of banking institutions are active in the intermediation of household insurance...
• ... with more use of captive insurers in evidence than for motor insurance
• Competitor analysis
• Bank-owned underwriters in Portugal secure more than 60% of total non-life premiums written

11.0 SPAIN

• Introduction to the banking sector
• The main wave of consolidation in Spanish retail banking has now taken place
• Many of Spain' s savings banks are characterised by an independent, entrepreneurial spirit
• Caser occupies a unique position in the Spanish bancassurance market
• New entrants may provide fresh bancassurance opportunities
• Specialised lenders and auto captives complete the list of potential non-life insurance partners
• Market overview
• The household insurance market surges at an average growth rate per annum of 13.2%
• Bancassurance
• Banking institutions in Spain have made some progress in non-life bancassurance...
• ... and their share of policies distributed may be higher than indicated by the official figures
• Survey results
• Motor insurance
• Over two thirds of consumer-oriented banks in Spain are active in selling motor insurance...
• ... with many having gravitated towards use of multiple partners or a brokerage model
• Zurich' s exclusive partners include Banca Pueyo, Banco Halifax Hispania and Deutsche Bank
• Household insurance
• The vast majority of banking entities surveyed are active in distribution of household insurance
• Only five underwriters hold two or more exclusive bancassurance partnerships in this domain
• A number of the larger banking networks insure household risks through captives
• Biharko Seguros is the joint venture firm utilised by three savings banks in the Basque region
• Competitor analysis
• The majority of non-life bancassurers in Spain are now making significant advances...
• ... including Santander Seguros, which almost quadrupled its market share from 2001 to 2005

12.0 UNITED KINGDOM / IRELAND

• Introduction to the banking sector
• Structural changes to the UK retail banking landscape have reached a hiatus
• New entrants have experienced mixed fortunes
• At the highest level, the market segments into banks, building societies and specialised lenders
• Banks demonstrate little homogeneity in their approach towards establishing partnerships
• Building societies gain market share of retail financial services at the expense of banks
• Specialised lenders are a diverse category...
• ... with many belonging ultimately to larger and better-known financial institutions
• In Ireland, the trad. duopoly of AIB and Bank of Ireland has been challenged by new entrants
• Market overview
• Gross premiums written for household insurance race past €11 billion in 2005
• Bancassurance
• Bank-owned distribution is boosted by the captive operations of HBOS and RBoS...
• ... however, a smaller percentage of customers perceive that they are buying from their bank
• In general, Irish banks display less enthusiasm for non-life bancassurance than those in the UK
• Survey results
• Motor insurance
• Competition from rival distribution channels makes it tough for banks to thrive in motor ins....
• ... with a number of major banking entities having elected not to mount a challenge in this arena
• Royal Bank of Scotland' s captive underwriters provide motor policies to rival banking networks
• HSBC is the largest of the UK banks to prefer a brokerage model for motor insurance
• Household insurance
• Over two thirds of banks in the UK and Ireland intermediate household insurance policies
• Norwich Union' s roster of partnerships is more impressive than that of Royal & SunAlliance
• Royal Bank of Scotland' s insurers are increasingly targeting non-captive distribution ties
• Both AXA Insurance and Legal & General lay claim to valuable relationships in this field
• Lloyds TSB has opted for a mixed operating model, as has the Irish branch of Bank of Scotland
• Competitor analysis
• The non-life business of Royal Bank of Scotland saw market share fall in 2004 and 2005
• ... although it continues to offer a key point of reference in European non-life bancassurance

GRAPHICS / TABLES

• Banks and other lending institutions contacted for the research, segmented by type and by country
• Personal motor and household insurance gross premiums written in Europe, 2001-5
• Personal motor insurance gross premiums written in Europe split by country, 2001-5
• Household insurance gross premiums written in Europe split by country, 2001-5
• Comparison of bank distribution of personal motor insurance in Europe, 2006
• Comparison of bank distribution of household insurance in Europe, 2006
• Comparison of operating models used for personal motor insurance in Europe, 2006
• Comparison of operating models used for household insurance in Europe, 2006
• Gross premiums written for personal motor and household insurance in Austria, 2001-5
• Bank provision of motor insurance in Austria: penetration rates, op. models and partner market shares, 2006
• Bank provision of household insurance in Austria: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in Austria, 2003-5
• Market shares for key bancassurance competitors in motor insurance in Austria, 2003-5
• Gross premiums written for personal motor and household insurance in Belgium, 2001-5
• Bank provision of motor insurance in Belgium: penetration rates, op. models and partner market shares, 2006
• Bank provision of household insurance in Belgium: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in Belgium, 2003-4
• Gross premiums written for personal motor and household insurance in France, 2001-5
• Bank provision of motor insurance in France: penetration rates, op. models and partner market shares, 2006
• Bank provision of household insurance in France: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in France, 2003-4
• Market shares for key bancassurance competitors in motor insurance in France, 2004
• Market shares for key bancassurance competitors in household insurance in France, 2004
• Gross premiums written for personal motor and household insurance in Germany, 2001-5
• Bank provision of motor insurance in Germany: pen. rates, op. models and partner market shares, 2006
• Bank provision of household insurance in Germany: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in Germany, 2001-4
• Market shares for key bancassurance competitors in motor insurance in Germany, 2001-4
• Market shares for key bancassurance competitors in property insurance in Germany, 2001-4
• Gross premiums written for personal motor and household insurance in Italy, 2001-5
• Bank provision of motor insurance in Italy: penetration rates, op. models and partner market shares, 2006
• Bank provision of household insurance in Italy: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in Italy, 2001-5
• Market shares for key bancassurance competitors in motor insurance in Italy, 2001-5
• Market shares for key bancassurance competitors in property insurance in Italy, 2001-5
• Gross premiums written for personal motor and household insurance in the Netherlands, 2001-5
• Bank provision of motor insurance in the Netherlands: pen. rates, op. models and partner mkt. shares, 2006
• Bank provision of household ins. in the Netherlands: pen. rates, op. models and partner mkt. shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in the Netherlands, 2003-4
• Market shares for key bancassurance competitors in motor insurance in the Netherlands, 2003-4
• Market shares for key bancassurance competitors in property insurance in the Netherlands, 2003-4
• Gross premiums written for personal motor and household insurance in the Nordic region, 2001-5
• Bank provision of motor ins. in the Nordic region: pen. rates, op. models and partner mkt. shares, 2006
• Bank provision of household ins. in the Nordic region: pen. rates, op. models and partner mkt. shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in the Nordic region, 2002-5
• Gross premiums written for personal motor and household insurance in Portugal, 2001-5
• Bank provision of motor insurance in Portugal: pen. rates, op. models and partner market shares, 2006
• Bank provision of household insurance in Portugal: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in Portugal, 2001-4
• Gross premiums written for personal motor and household insurance in Spain, 2001-5
• Bank provision of motor insurance in Spain: penetration rates, op. models and partner market shares, 2006
• Bank provision of household insurance in Spain: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in Spain, 2001-5
• Gross premiums written for personal motor and household insurance in the UK, 2001-5
• Bank provision of motor insurance in the UK: penetration rates, op. models and partner market shares, 2006
• Bank provision of household insurance in the UK: pen. rates, op. models and partner market shares, 2006
• Market shares for key bancassurance competitors in non-life insurance in the UK, 2001-5
• Major, exc. affinity and partner. mktg. rels. for pers. non-life ins. in the UK held by RBS Ins. Group, 2006
• Major, exc. aff. and partner. mktg. rels. for pers. non-life ins. in the UK held by RBS Ins. Group, 2006 (cont.)
• Major, exc. aff. and partner. mktg. rels. for pers. non-life ins. in the UK held by RBS Ins. Group, 2006 (cont.)