Affinity & Partnership Marketing in Mutual Funds, Life Insurance and Retirement Savings in Italy

Published Date: April 2004 Published By: Finaccord Ltd. Page Count: 130 Order Code: R3434-3 $3,499.00   Online Download   Questions About This Report E-mail a Colleague Printable Page Fax Your Order Description Table of Contents Similar Products 0.0 EXECUTIVE SUMMARY Research background and structure Financial institutions are by far the dominant form of partner… … meaning that insurers and fund managers regularly compete for partnerships In the ins. domain, Aviva, Cattolica and Skandia have been particularly successful Multi-tied partnerships and ‘open architecture’ are common for mutual fund dist.… … with both insurer-owned banks and ind. networks providing additional opportunities Specialised lenders are increasingly active in the fast-growing market for creditor ins The participation of not-for-profit affinity groups is comparatively sparse… … and that of commercial non-financial organisations even more limited… … in part as a consequence of the fragmented nature of consumer markets in Italy … although a notable exception is Le Poste which has experienced dramatic growth Financial sector partners will continue to represent the key to distribution 1.0 INTRODUCTION Finaccord PartnerBASE™ Rationale Methodology Errors, omissions and limit of liability 2.0 STRATEGIES FOR SUCCESS Introduction Why consider affinity and partnership marketing? Affinity and partnership marketing is not a new concept Proprietary distribution channels present limited organic growth potential Not all schemes work but some have been hugely successful Transient relationships mean that incumbents can sometimes be unseated What makes for a successful relationship? Successful affinity and partnership marketing schemes must create three sets of winners All parties need to benefit but the customer remains king Judicious partner selection is a prerequisite for establishing effective schemes Brand or ideological fit can be as important as more concrete selection criteria Strategies for effective affinity and partnership marketing Optimum results will be achievable only if all elements of the marketing mix are attended to Affinity and partnership marketing: the way ahead Financial institutions must emerge from their product silos to create more exciting packages Injecting some fun into financial services will stimulate affinity marketing schemes The future prospects for affinity and partnership marketing should be bright 3.0 MARKET OVERVIEW Introduction Overview of the household savings and investments market in Italy Household savings habits are impacted by weak performance of the equity market Overview of the mutual fund market in Italy Money market funds thrive amid equity market uncertainties Overview of the life insurance market in Italy The life insurance market more than doubles between 1998 and 2003 Overview of the open pension fund market in Italy The value of the open pension fund market remains comparatively tiny Overview of affinity and partnership marketing in Italy Affinity and partnership marketing schemes segmented by financial product Over 2,200 affinity and partnership schemes break down relatively evenly by fin. product Affinity and partnership marketing schemes segmented by type of partner Financial institutions dominate the distribution of consumer financial services in Italy Aff. and partner. mark. in Italy: mutual funds, life ins. and retire. savings Schemes segmented by type of product 774 affinity and partnership marketing schemes traced by Finaccord’s research… Schemes segmented by type of partner … over three quarters of which are attributable to the financial partner category All cases of provision segmented by product and by operating model Multi-tied or fully open distribution systems are most evident for mutual funds 4.0 AFFINITY GROUPS 4.1 Charities Introduction Charity involvement in affinity marketing of financial services is currently limited 4.2 Leisure organisations Introduction The CRAL are increasingly involved in arranging discounts for their members… … a variety of partnerships having been traced for life insurance and retirement savings Life insurance Fondiaria SAI appears to have been active in targeting leisure organisations Unit-linked life insurance Almost one quarter of leisure organisations also offer unit-linked life insurance… Pension plans … the same proportion being active in the intermediation of pension plans 4.3 Professional associations Introduction Professional services have limited involvement in affinity financial services… … occupation-specific pension funds and casse di previdenza fulfilling the role in many cases.53 4.4 Sports organisations Introduction Sports orgs. offer limited prospects beyond policies directly linked to the relevant sport Life insurance Sportass accounts for over three quarters of partnerships for sports-related life insurance … although some private sector ins. have also been able to make headway in this market 4.5 Trade unions Introduction CGIL and CISL dominate the trade union affinity marketing landscape in Italy… … which means that Unipol and Union Vita enjoy strong positions in this segment Life insurance Unipol and Union Vita maintain a virtual duopoly for life ins. marketed through trade unions Open pension funds Union Vita offers open pension funds for CISL members Pension plans Partnering configurations for pension plans are largely the same as for life insurance 5.0 FINANCIAL PARTNERS 5.1 Banks Background Consolidation and rationalisation change the face of retail banking in Italy Bancassurance opportunities may also be apparent in the fast-growing second tier of banks Foreign entrants have made limited headway in the Italian retail banking market Introduction Consideration of 155 banks accounts for the bulk of the market by share of customers The bank channel continues to account for over 50% of life insurance sales… … and is almost completely dominant for mutual fund distribution Mutual funds Mutual fund provision is virtually ubiquitous among Italian banks… … with GPF programs playing an important part in their distribution… … although there is little homogeneity in the operating models used by banks The larger institutions veer towards provision of in-house funds only to retail clients Numerous fund managers compete for bank distribution mandates… … including both domestic investment management entities and overseas entrants Life insurance Life insurance provision is virtually ubiquitous among Italian banks… … a number of the larger banking groups having established joint ventures for the purpose Banca Intesa rolls its bancassurance interests into single joint venture with Generali Unipol maintains its 50% stake in BNL Vita Aviva has created a number of joint venture companies for life insurance in Italy Some joint ventures persist even after the banking partner has been acquired Three of the ‘big six’ banks have established captive life insurers Arca Vita enjoys exclusive distribution for life ins. through a number of ‘banche popolari’… … while Cattolica has cultivated distribution partnerships as well as joint ventures Assimoco Vita, Eurovita and Generali also enjoy a number of exclusive relationships Slightly over 10% of banks work with more than one partner for life insurance Unit-linked life insurance Operating models for unit-linked policies are similar to those used for ordinary life insurance… 81 … although Skandia Vita’s specialisation in this market has allowed it to win many partners. Open pension funds Open pension funds are promoted by over three quarters of Italian banks … with Intesa having been successful in creating dist. agreements with external banks Pension plans Partnerships for pension plans are usually the same as those for life insurance Creditor insurance Creditor insurance constitutes a significant opportunity for life insurers A market worth approximately €1.6bn in Italy in 2002 if defined broadly Creditor insurance, as defined elsewhere in Europe, has made limited inroads in Italy However, fully-fledged creditor insurance is being introduced by pioneers in the market… Loan brokers, including estate agents, are also active in creditor ins. distribution in Italy Most mortgage lenders in Italy offer creditor insurance of one sort or another… … but few payment cards yet carry the option for customers to purchase creditor insurance Unemployment coverage is provided by fewer than 25% of all policies on the market Competitor analysis Single partnerships dominate creditor insurance operating models in Italy… … but a complex web of bancass. agreements impedes the progress of specialist providers Formal joint ventures are an important feature of the Italian bancassurance landscape 5.2 Casse di previdenza Introduction Involvement of the casse di previdenza as distributors in these markets is minimal 5.3 Financial networks Introduction The SIM sector has been subject to substantial rationalisation in recent years Mutual funds All financial networks are active in mutual fund distribution… … a majority working with multiple, external fund managers Life insurance Some financial networks offer partnership opportunities for external life insurers… Unit-linked insurance … similar opportunities being in evidence for unit-linked insurance Open pension funds Crédit Agricole and HDI establish distribution deals with independent financial networks Pension plans Pension plans are offered by 82.1% of financial networks 5.4 Insurers Introduction 5.5 Specialised lenders Introduction Specialised lenders are a diverse category… … with many active in the fast-growing market for loan-related protection policies Net Insurance and Cardif are leading protagonists in the creditor insurance market 6.0 NON-FINANCIAL PARTNERS 6.1 Automotive manufacturers Introduction 6.2 Estate agents Introduction A handful of estate agency networks have established partnerships for life insurance… Life insurance … although penetration rates are well below those for mortgages and household insurance Often, mortgage partners will have established their own relationships for life ins. provision 6.3 Football clubs Introduction Football clubs become more adept in affinity financial services… … although involvement in life insurance and related products remains limited 6.4 Retailers Introduction Retailing markets in Italy are fragmented by European standards… … with the top four retailing groups collectively accounting for less than 10% of total sales…. 116 … although the Bersani legislation removed many licensing requirements and restrictions Carrefour and Mulliez-Auchan lead the foreign conquest of Italy Retailer involvement in fin. services is concentrated in consumer finance and credit cards 6.5 Other non-financial organisations Introduction Le Poste leverages distribution strength in life insurance and mutual funds GRAPHICS / TABLES The affinity and partnership marketing universe Entities contacted for the research, segmented by type The three winners in successful affinity and partnership marketing schemes How to identify an effective partner in affinity and partnership marketing The virtuous circle for effective affinity and partnership marketing Most affinity and partnership marketing schemes conform to a ‘product silo’ approach A new generation of affinity and partnership marketing schemes must deliver a more compelling proposition Segmentation of household savings and investments assets outstanding in Italy, 1998-2003e Segmentation of total mutual fund assets outstanding in Italy, 1998-2003 Segmentation of life insurance gross premium income in Italy, 1998-2003e Segmentation of open pension fund net assets in Italy, Q3 2003 Affinity and partnership marketing schemes in consumer fin. services in Italy: segmentation by type of product Affinity and partnership marketing schemes in financial services in Italy: segmentation by type of partner Aff. and partner. marketing schemes for mutual funds, life ins. and ret Aff. and partner. marketing schemes for mutual funds, life ins. and ret All cases of provision for mutual funds, life ins. and ret. savings in Italy: seg. by product and by op. model Charities in Italy offering financial services other than credit cards Leisure organisations offering life insurance in Italy: penetration, operating models and partner market shares Leisure orgs. offering unit-linked life ins. in Italy: penetration, operating models and partner market shares Leisure organisations offering pension plans in Italy: penetration, operating models and partner market shares Professional associations in Italy offering life insurance and retirement savings products Occupation-specific pension funds in Italy, 2004 Sports organisations offering life insurance in Italy: penetration, operating models and partner market shares Trade unions offering life insurance in Italy: penetration, operating models and partner market shares Trade unions offering open pension funds in Italy: penetration, operating models and partner market shares Trade unions offering pension plans in Italy: penetration, operating models and partner market shares Banks offering mutual funds in Italy: penetration and operating models Importance of external mutual fund providers ranked by number of distribution agreements traced with banks Banks offering life insurance in Italy: penetration, operating models and partner market shares Banks offering unit-linked life insurance in Italy: penetration, operating models and partner market shares Banks offering open pension funds in Italy: penetration, operating models and partner market shares Banks offering pension plans in Italy: penetration, operating models and partner market shares Approximate gross written premiums for creditor insurance in Italy segmented by underlying product, 2002 Lender penetration of creditor insurance policies by product in Italy Risks covered by creditor insurance policies in Italy Operating models for creditor insurance in Italy Partner market shares for creditor insurance in Italy Financial networks offering mutual funds in Italy: penetration and operating models Financial networks offering life insurance in Italy: penetration, operating models and partner market shares Financial networks offering unit-linked ins. in Italy: penetration, operating models and partner market shares Financial networks offering open pension funds in Italy: penetration, op. models and partner market shares Financial networks offering pension plans in Italy: penetration, operating models and partner market shares Specialised lenders offering life insurance in Italy: penetration and operating models Estate agents offering life insurance in Italy: penetration, operating models and partner market shares Football clubs in Italy offering life insurance Retailers in Italy offering financial services other than consumer finance and credit cards Similar Products • North American Insurance Industry 1Q08 Update: It's Not Getting Any Easier TEST Published Nov 2008 by IDC • Claims, Funds Administration & Other Insurance Services in the US - Industry Market Research Report Published Nov 2008 by IBISWorld • The 2008 U.S. Elections and Impact on the Financial Services Industry: What to Watch Published Nov 2008 by IDC • Product and Operations Changes for Success in Selling Insurance to US Hispanic and Asian Populations Published Nov 2008 by TowerGroup • Poland Infrastructure Report Q4 2008 Published Nov 2008 by Business Monitor 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