Card Protection Metrics: Consumer Approaches to Card Protection Insurance in France

Abstract

Finaccord' s report titled Card Protection Metrics: Consumer Approaches to Card Protection Insurance in France offers detailed and unique insights into the behaviour of French cardholders in the context of card protection insurance. Based on a primary survey of over 1,000 consumers in France carried out in July and August 2008, the research provides valuable data describing the extent to which consumers with debit and / or credit cards take out card protection insurance and clarifying the proportion of uninsured cardholders who value the benefits of the insurance but have simply not got round to acquiring cover. In addition to calculating the percentage of French cardholders possessing card protection insurance, the investigation also analyses the types of policy that they hold (i.e. insurance that they are paying for separately or free cover), the range of benefits that they believe that they derive from their insurance, which distribution channel and interface they use to take out paid-for card protection insurance and whether they buy cover within a week or a month of acquiring a given payment card or at a later stage. Finally, the report measures the degree to which insured cardholders in France are satisfied with their insurance, whether they find it expensive and if they are likely to discontinue it the next time that it comes up for renewal. Key features of this report include: - robust analyses showing the percentage of cardholders that acquire card protection insurance in France, the potential for this proportion to grow further and how cross-selling rates differ between debit cards and credit cards; - unique data describing the proportion of cardholders who understand that the insurance that they possess provides them with particular benefits and services; - accurate statistics illustrating the extent to which sales of card protection insurance in France are made through remote interfaces (i.e. Internet, telephone and post) in addition to through face-to-face contact; - reliable information displaying how quickly cardholders are inclined to purchase card protection insurance once they have acquired a payment card; - valuable insights into the reasons given by French cardholders for not acquiring insurance (for example, because they have not had time, because it is too expensive, because they did not see the benefit).

Table of Contents

0.0 EXECUTIVE SUMMARY 2

• A high proportion of French cardholders are paying for their card protection insurance 2
• There are variations in consumers' likelihood of paying for insurance by age, but not by gender 2
• A significant percentage of uninsured cardholders see the benefit of card protection insurance 3
• There is potential to expand the range of services offered by card protection insurance 3
• Most card protection insurance in France is bought in a face-to-face environment ... 3
• ... at the same time as the payment card itself is acquired 3
• Credit card issuers sell many more policies than would be expected given their share of cards in issue 4
• The French market provides a benchmark for card protection insurance elsewhere in Europe 4

1.0 INTRODUCTION 6

• Research rationale 6
• Consumer research illustrates the differences between Europe' s five most populous markets 6
• Finaccord. 7
• European consumer research 7
• Card protection insurance 7
• European market, partnership and bancassurance research 8

2.0 SURVEY ANALYSIS 10

• Introduction 10
• Percentage of respondents possessing any kind of payment card 12
• Payment cards are almost universal in France, with debit cards to the fore 12
• Percentage of cardholders in possession of card protection insurance 14
• The proportion of cardholders paying for card protection cover in France is comparatively high 14
• Attitudes towards card protection insurance of cardholders without cover 16
• Most of the cardholders who do not have card protection insurance see that it would be beneficial 16
• Risks covered by card protection insurance 17
• Anti-fraud protection is the benefit most commonly provided by card protection insurance 17
• Distribution interfaces used for paid-for card protection insurance 20
• Face-to-face sales dominate the distribution of card protection insurance 20
• Point in time chosen to acquire paid-for card protection insurance 21
• Card protection insurance is sold most effectively face-to-face along with the payment card 21
• Remote sales of card protection insurance can be made long after the original card is acquired 22
• Distribution channels used for paid-for card protection insurance 23
• Credit card issuers out-perform debit card issuers for sales of card protection insurance 23
• Attitudes towards insurance of cardholders with paid-for cover 24
• Very few customers are thinking of discontinuing paid-for cover 24
• although the 25-34 age group is most likely to find it expensive 25

3.0 APPENDIX 27

• Research sample 27
• The research embraces a total of 1,005 respondents in France 27
• Research structure 30

GRAPHICS / TABLES

• Percentage of respondents in France possessing any kind of payment card, 2008 12
• Percentage of respondents in France possessing any kind of payment card, 2008 (data) 13
• Percentage of cardholders in France in possession of card protection insurance, 2008 14
• % of cardholders in France in possession of card protection insurance segmented by gender, age group and annual household income, 2008 (data) 15
• Attitudes towards card protection insurance of cardholders in France without cover, 2008 16
• Risk coverage among insured cardholders in France, 2008 18
• Risk coverage among insured cardholders in France, 2008 (data) 19
• Distribution interfaces used to acquire paid-for card protection insurance in France, 2008 20
• Point in time chosen by cardholders in France to acquire paid-for card protection insurance, 2008 21
• Frequency with which card protection insurance is sold at the same time as the card itself, face-to-face and remote interfaces, France 2008 22
• Distribution channels used to acquire paid-for card protection insurance in France, 2008 23
• Attitudes towards card protection insurance of cardholders in France with paid-for cover, 2008 24
• Cardholders who find paid-for card protection insurance to be important but expensive by age, in France, 2008 25
• Sample breakdown in France by age group and household income band 27
• Sample breakdown in France by geographical location 28