Insurance and Assistance linked to Payment Cards and Bank Accounts in India

Aug, 2013   |   32  Pages   |   Finaccord Ltd   |   Format : PDF + Excel database

Insurance and Assistance linked to Payment Cards and Bank Accounts in India investigates the market for insurance and assistance policies linked to banking products in this country. Drawing on the results of an investigation covering 254 individual payment card and bank account products offered by 38 banking institutions and specialised card providers in India, the report analyses the provision of the following broad categories and types of insurance and assistance policy:

- accident / health cover: accidental death insurance, health / hospital cash plans, health assistance, personal accident insurance;

- creditor cover: creditor insurance life / permanent disability, creditor insurance temporary incapacity / unemployment;

- personal / identity protection cover: ATM cash theft insurance, card protection insurance, handbag / wallet insurance, identity protection assistance, identity protection insurance;

- shopping cover: extended warranty, price protection insurance, purchase protection insurance;

- travel cover: travel accident insurance, travel assistance, travel health insurance, travel inconvenience insurance, travel insurance - comprehensive;

- other cover: car hire insurance, home assistance, legal assistance, legal expenses insurance, missed event insurance, mobile gadget insurance, mobile phone insurance, personal liability insurance, road assistance, miscellaneous other insurance and assistance;

- concierge services.

Key features of this study include:

- quantification of the market size and segmentation for insurance and assistance linked to payment cards and bank accounts: approximately how much is the market worth in India, how does it break down by broad category, how much is funded by the banking institutions themselves and how much is paid for separately by customers?

- analysis of the operating models used by banking organisations for insurance and assistance linked to payment cards and bank accounts: to what extent do they use external underwriters as opposed to captive or joint venture providers?

- calculation of provider share of partnerships based on number of relationships and partner size: which providers of insurance and assistance services have been successful in establishing relationships for each broad category of cover with the most significant banking institutions and other card issuers or distributors?

- availability of an accompanying PartnerBASE dataset that details the availability or otherwise of each individual insurance or assistance enhancement to the 254 payment card and bank account products analysed in India.

0.0 EXECUTIVE SUMMARY ...... 1

1.0 INTRODUCTION ........ 2
What is this report about? ......... 2
The provision of 30 forms of niche insurance and assistance is investigated in this study ....... 2
Rationale ... 2
The new research builds upon that pioneered by Finaccord over a period of almost a decade in Europe .... 2
Methodology ........ 4
Primary survey . 4
The research covers 254 specific banking products offered by 38 banks and other organisations ..... 4
Semi-weighted provider share of partnerships...... 5
Market size modelling . 5
Operating models ....... 6
Abbreviations ... 6
Definitions of specific types of insurance and assistance ... 7
PartnerBASE ....... 9
Finaccord  10

2.0 MARKET ANALYSIS .......... 11
Banks and other payment card issuers covered .... 11
Introduction to the banking market .... 11
India's banks have expanded their branch networks substantially in recent years... .... 11
... although a significant proportion of the country's population remains unbanked ...... 11
The Reserve Bank of India follows a policy that generally encourages banking sector consolidation.......... 12
Introduction to the payment card sector ....... 12
The total number of debit cards in circulation grew very strongly between 2009 and 2013 .... 12
Insurance and assistance linked to payment cards and bank accounts  14
Overview of payment card and bank account products analysed ...... 14
Debit cards with bundled cover and packaged accounts are comparatively widespread in India ..... 14
Broad types of insurance and assistance cover . 15
Accident and health policies constitute the most frequently occurring category of packaged cover .. 15
Specific types of insurance and assistance cover ......... 16
Simple creditor cover for life and disability registers the highest availability rate overall.......... 16
Where provided, travel cover is normally restricted to inconveniences such as lost luggage . 16
Purchase protection insurance and health / hospital cash plans are also fairly common........ 17
Provision rates tend to rise slightly if premium products are analysed in isolation ........ 17
Funding mechanisms vary according to the type of insurance or assistance in question ....... 17
Operating models ..... 21
Joint venture underwriters are quite often used for packaged insurance in India... ...... 21
... partly as a consequence of local regulations governing bancassurance activity ...... 21
Competitor share of partnerships ... 23
Accident / health cover: Royal Sundaram is the most visible provider in this field ........ 23
Creditor cover: 12 underwriters are active in the market for credit card payment protection insurance ....... 24
Personal / identity protection cover: CPP has pioneered activity in this area and remains dominant  25
Shopping-related cover: SBI General claims the highest semi-weighted share of partnerships by far ........ 26
Travel-related cover: United India and New India Assurance are the most prominent competitors .. 26
Other cover: Royal Sundaram benefits from its partnership in this sphere with SBI Card ...... 27
Concierge services: International SOS appears to hold a virtual monopoly in this arena ....... 28
Market size ..... 28
One category of insurance is estimated to account for over 50% of the total market value .... 28
Indian banks fund a modest proportion of the total market value themselves ... 29

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY ...... 1

1.0 INTRODUCTION ........ 2

2.0 MARKET ANALYSIS .......... 11
Number of debit and credit cards in India, 2009 to 2013 .. 13
Key metrics for debit and credit cards in India, 2009 to 2013 ...... 13
Specific types of insurance and assistance policy researched, grouped by broad category ... 3
Summary of payment card and bank account products analysed in India, segmented by category, 2013 14
Summary of payment card and bank account products analysed in India, segmented by category, 2013 (table) ...... 15
Relative weight of insurance and assistance policies linked to payment card and bank account products in India, segmented by broad type of cover, 2013 ..... 16
Penetration of specific types of insurance and assistance linked to payment card and bank account products in India, 2013: all products .. 18
Penetration of specific types of insurance and assistance linked to payment card and bank account products in India, 2013: premium products only ..... 19
Split of specific type of insurance and assistance linked to payment card and bank account products in India between automatic cover and cover available for an additional fee, 2013 ......... 20
Operating models used for insurance and assistance policies linked to payment card and bank account products in India, segmented by specific type of cover, 2013 ..... 22
Competitor share of partnerships for accident / health insurance and assistance policies linked to payment card and bank account products in India, 2013 ...... 24
Competitor share of partnerships for creditor insurance policies linked to payment cards in India, 2013 .. 25
Competitor share of partnerships for personal / identity protection insurance and assistance policies linked to payment card and bank account products in India, 2013 ........ 26
Competitor share of partnerships for shopping-related insurance policies linked to payment card and bank account products in India, 2013 ........ 26
Competitor share of partnerships for travel-related insurance and assistance policies linked to payment card and bank account products in India, 2013 ...... 27
Competitor share of partnerships for other insurance and assistance policies linked to payment card and bank account products in India, 2013 .......... 28
Competitor share of partnerships for concierge services linked to payment card and bank account products in India, 2013 . 28
Estimated gross written premiums for insurance and assistance linked to payment cards and bank accounts in India, segmented by broad type of cover, 2013 (USD million) ...... 29
Estimated gross written premiums for insurance and assistance linked to payment cards and bank accounts in India, segmented by cover acquired automatically and cover acquired through payment of an additional fee, 2013 (USD million) ..... 30

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