Insurance and Assistance linked to Payment Cards and Bank Accounts in South Africa investigates the market for insurance and assistance policies linked to banking products in this country. Drawing on the results of an investigation covering 66 individual payment card and bank account products offered by 16 banking institutions and specialised card providers in South Africa, 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 South Africa, 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 66 payment card and bank account products analysed in South Africa.

Table of Contents

Executive Summary

Introduction

Market Analysis

List of Graphics / Tables

 

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

The provision of 30 forms of niche insurance and assistance is investigated in this study

Rationale

The new research builds upon that pioneered by Finaccord over a period of almost a decade in Europe

Methodology

Primary survey

The research covers 66 specific banking products offered by 16 banks and other organisations

Semi-weighted provider share of partnerships

Market size modelling

Operating models

Abbreviations

Definitions of specific types of insurance and assistance

PartnerBASE

Finaccord

 

2.0 MARKET ANALYSIS

Banks and other payment card issuers covered

Introduction to the banking market

South Africa's banking system is characterised by a fairly high degree of concentration

Introduction to the payment card sector

The compound annual growth rate of credit cards in circulation was 5% between 2009 and 2013

Insurance and assistance linked to payment cards and bank accounts

Overview of payment card and bank account products analysed

Credit cards account for close to 90% of the products researched

Broad types of insurance and assistance cover

Creditor insurance and travel-related cover clearly dominate South Africa's market

Specific types of insurance and assistance cover

Creditor insurance is available in conjunction with nearly all credit card products

Provision rates tend to rise if premium products are analysed in isolation

Operating models

Captive underwriters play a fairly important role in the South African market

Competitor share of partnerships

Accident / health cover: two providers are visible in this field

Creditor cover: captive providers dominate this segment

Personal / identity protection cover: Absa Insurance is active in this domain

Shopping-related cover: competition in this area is also limited to two providers

Travel-related cover: Absa Insurance, AIG and Santam are the main competitors

Other cover: AA South Africa provides packaged road assistance for two banking organisations

Concierge services: International SOS is the only visible provider in this sphere

Market size

Creditor insurance accounts for the lion's share of South Africa's total market value...

... with a modest proportion of the total market value funded by the banks themselves

 

LIST OF GRAPHICS / TABLES

TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

Specific types of insurance and assistance policy researched, grouped by broad category

2.0 MARKET ANALYSIS

Number of debit and credit cards in South Africa, 2009 to 2013

Key metrics for debit and credit cards in South Africa, 2009 to 2013

Summary of payment card and bank account products analysed in South Africa, segmented by category, 2013

Summary of payment card and bank account products analysed in South Africa, segmented by category, 2013 (table)

Relative weight of insurance and assistance policies linked to payment card and bank account products in South Africa, segmented by broad type of cover, 2013

Penetration of specific types of insurance and assistance linked to payment card and bank account products in South Africa, 2013: all products

Penetration of specific types of insurance and assistance linked to payment card and bank account products in South Africa, 2013: premium products only

Split of specific type of insurance and assistance linked to payment card and bank account products in South Africa between automatic cover and cover available for an additional fee, 2013

Operating models used for insurance and assistance policies linked to payment card and bank account products in South Africa, segmented by specific type of cover, 2013

Competitor share of partnerships for accident / health insurance and assistance policies linked to payment card and bank account products in South Africa, 2013

Competitor share of partnerships for creditor insurance policies linked to payment cards in South Africa, 2013

Competitor share of partnerships for personal / identity protection insurance and assistance policies linked to payment card and bank account products in South Africa, 2013

Competitor share of partnerships for shopping-related insurance policies linked to payment card and bank account products in South Africa, 2013

Competitor share of partnerships for travel-related insurance and assistance policies linked to payment card and bank account products in South Africa, 2013

Competitor share of partnerships for other insurance and assistance policies linked to payment card and bank account products in South Africa, 2013

Competitor share of partnerships for concierge services linked to payment card and bank account products in South Africa, 2013

Estimated gross written premiums for insurance and assistance linked to payment cards and bank accounts in South Africa, segmented by broad type of cover, 2013 (USD million)

Estimated gross written premiums for insurance and assistance linked to payment cards and bank accounts in South Africa, segmented by cover acquired automatically and cover acquired through payment of an additional fee, 2013 (USD million)