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March 10, 2008 11:02 ET

Examine the Payment Cards Market in France

LONDON, UNITED KINGDOM--(Marketwire - March 10, 2008) - Reportlinker.com announces that a new market research report related to the Financial services industry is available in its catalogue.

Payment Cards in France 2007

Payment Cards in France is an invaluable guide to one of Europe's most sophisticated card markets. The report provides statistics on market size, competitor market shares and acceptance. It also provides an overview of regulation, competitor activities, product innovation and market forecasts. It concludes with an analysis of the French market.

The focus of the report is on consumer payment cards, as opposed to commercial card products. Data and analysis provided on debit cards, credit cards and deferred debit and charge cards. The report parameters extend to card issuance only. Merchant acquiring and card processing are not covered. Historic market data is presented for 2002-06, with forecasts presented to 2011. Competitor shares for card issuers are presented for 2006.

In 2007, ahead of introduction of rules for Single Euro Payment Area, which aims to free up competition in the payment card industry across the entire EU, Groupement des Cartes Bancaires announced that it will allow card issuers to enter into co-branded partnerships as of January 2008. Deferred debit and charge cards account for the largest share of total transaction values in France. At the end of 2006, the value of these transactions was _206.1 billion, which is equal to 61.7% of the market share. Over the last year contactless payment trials in France saw the introduction of the first EMV-enabled contactless payment card in Europe.

Learn how the French consumer payment card market has developed over the last five years. Understand recent developments in the market in terms of consolidation, new entrants and product innovations. Use of Datamonitor's five year forecasts for the market to plan your future strategy.

Overview 1

Catalyst 1

Summary 1

Executive Summary 2

The UK private motor insurance market started to harden at the end of 2006 2

Private motor insurance GWP contracted by 0.9% in 2006 as the market only hardened late in the year 2

Underwriting losses expanded in 2006, driven by high costs and lower net revenue 2

Distribution of personal lines insurance shifted towards partnerships with banks and brands in 2006 2

The partnership channel gained market share from brokers in the motor insurance market in 2006 2

The telephone remained the largest platform for arranging a motor policy in 2007 but the internet platform is growing fast 2

Conditions remained competitive in 2006, leading some to exit the market 3

The competitive nature of the private motor market caused some insurers to exit the market 3

Market leader RBSI maintained its grip on the private motor market in 2006 3

The market is forecast to reach Pounds Sterling 12.5 billion by 2012 and regain profitability in 2009 4

The UK private motor insurance market is forecast to be worth Pounds Sterling 12.5 billion in 2012 4

The private motor insurance market is forecast to reach profitability in 2009 4

Table of Contents 5

Table of figures 6

Table of tables 7

Market Context 8

Introduction 8

The UK private motor insurance market started to harden at the end of 2006 and grew in 2007 8

The market hardened late in 2006, which led to strong gains in premium income for 2007 8

UK private motor insurance GWP increased to an estimated Pounds Sterling 10.1 billion in 2007 as the market hardened 8

Private motor insurance GWP contracted by 0.9% in 2006 as the market only hardened late in the year 8

The comprehensive and non-comprehensive segments both declined in 2006, but rebounded in 2007 9

Comprehensive motor GWP suffered the worst contraction of the three private lines in 2006 9

Non-comprehensive premium income suffered as fewer motorists chose this cover 10

The motorcycle market was the only part of private motor to increase in 2006, although it contracted in 2007 12

Late rises in premium rates and low growth in private car numbers depressed GWP in 2006 14

Private motor insurance premium rates recovered late in 2006 and have climbed in 2007 14

Comprehensive premium rates grew towards the end of 2006 and continued to increase in 2007 14

Non-comprehensive premium rates increased significantly in 2006, but trailed the comprehensive market in 2007 14

The UK private vehicle parc continued to grow slowly in 2006 18

Private car numbers increased in 2006, although the rate of growth has slowed 18

New registrations for private cars declined in 2006 18

Although the private car parc is aging it remains mostly modern in composition 20

Motorcycle numbers continue to climb, although growth has slowed 22

Underwriting losses expanded in 2006, driven by high costs and lower net revenue 23

The private motor underwriting result deteriorated in 2006 23

Increases in total outgoings were driven by higher commissions and reserving, despite lower claims costs 25

Commissions and expenses rose 3.1% in 2006, while insurers reserved more than they released 25

Net claims costs fell in 2006, moderating the increase in total outgoings 26

Claims inflation continue to plague the market, but accident and theft rates have fallen 27

Overall claims inflation increased significantly in 2006 27

Bodily injury claims are more expensive than other claims 28

Falling road traffic accident rates will have given insurers some respite on their claims bills 30

Road traffic accident numbers have declined over the last nine years 30

Road traffic accidents have declined even as car numbers have increased, representing a fall in frequency 31

Casualty rates have fallen steadily, mirroring the decline in road traffic accidents in 2006 33

Theft rates continue to fall, representing a positive trend for private motor insurers 34

A number of initiatives aimed at cost savings were undertaken in 2006 and 2007 36

The IFB has been very active in the investigation of professional fraud over the year it has been in operation 36

The tightening up of MID requirements should drive down uninsured driving leading to savings for insurers 37

Insurers remain divided over whether rehabilitation offers real savings on claims costs 37

With the arrival of Copart, recycled parts can assist insurers in curbing repair costs 38

Insurers have pushed online distribution of motor insurance certificates and could save up to Pounds Sterling 11m a year 38

Commercial motor GWP declined in 2006, but the market increased its underwriting profit 38

The commercial motor market contracted slightly more than the private market in 2006 38

The total motor market's underwriting loss increased marginally to Pounds Sterling 204m in 2006 39

Despite being in a soft market, commercial motor improved its profitability in 2006 41

Customer Focus 44

Introduction 44

Distribution of personal lines insurance shifted towards partnerships with banks and brands in 2006 44

The partnership channel gained market share from brokers in the motor insurance market in 2006 44

Aggregators have become important to motor insurance distribution 45

The telephone remained the largest platform for arranging a motor policy in 2007 but the internet platform is growing fast 46

The telephone and face-to-face platforms have been declining steadily 46

More consumers are turning to the internet to arrange their motor policies 46

Retention rates vary by age of consumer and platform used to arrange insurance 48

The majority of motor consumers will stay with the same provider at the time of renewal 48

More than a third of consumers who purchased their motor insurance online switched provider at renewal 50

Consumers purchasing their motor policies face-to-face, by phone or via post are unlikely to change provider 51

Switching providers is more prevalent among younger consumers 52

Price remained the main reason for taking out a motor policy across platforms and ages 54

Consumers purchasing a policy via the internet are more likely to be motivated by cheaper quotes than others 54

Consumers over the age of 55 are less sensitive to price than younger consumers 56

The way in which consumers seek information about motor insurance varies relative to age 58

Previous experience is the most popular source of information and is used more as a consumer gets older 58

Younger consumers are more likely to use web sources 59

Television advertisements are used by 14% of consumers overall 59

Mailshots, brochures and broker advice are mainly used by older people 59

Advertising for motor insurance products remained dominated by the television campaigns of direct insurers in 2006 62

Motor insurance advertising increased by 2.3% in 2006 to almost Pounds Sterling 200 million 62

Advertising is dominated by insurers, but brokers narrowed the gap in 2006 62

Most of the top 10 motor advertisers in 2006 are direct insurers 65

The spend of the top 10 grew slightly in 2006, driven mainly by the substantial increases of four motor insurance advertisers 65

The top 10 motor advertisers focus on television advertising, reflecting the need for direct insurers in particular to build up brand awareness 66

Most of the largest motor advertisers spent the majority of their budgets on television advertising in 2006 66

Direct mail advertising is used by most of the top 10 to complement their television campaigns 66

Press, outdoor and radio advertising were used sparingly by the top 10 motor insurance advertisers in 2006 67

The smaller advertising budgets of advertisers ranked 11-20 were more evenly split between television and direct mail 68

The list of advertisers ranked 11-20 contains a more varied mix of providers 68

Direct mail was the most favored medium among advertisers ranked 11-20 68

Television advertising was also very important to competitors ranked 11-20 in 2006 69

Advertisers ranked 11-20 spent smaller amounts on marketing in radio, the press and outdoor 69

Television remains the most important medium for motor insurance providers 71

Direct mail remains an important advertising medium, having increased as a proportion of motor insurers budgets 72

Direct Line remains the leader in brand awareness in 2007 73

Competitive Dynamics 77

Introduction 77

Two insurers exited the private motor market in 2006 and 2007 77

Provident sold its motor book to GMAC in May 2007 77

Legal & General ceased underwriting new private motor policies in 2006 77

The top 10 private motor insurers lost market share in 2006, although the market remained highly consolidated 77

Market leader RBSI maintained its grip on the private motor market in 2006 77

The top 10 private motor insurers lost market share in 2006 79

A number of the largest private motor insurers grew market share in 2006, despite competitive conditions 81

Direct Line's GWP remained stable in 2006 81

Royal & SunAlliance raised its market share and increased premium income in 2006 81

Fortis grew its private motor insurance market share in 2006 due to an increase in policy numbers 82

NIG grew its presence in the motor insurance market, gaining market share and GWP in 2006 82

Competitive conditions resulted in some top 10 players losing market share in 2006 82

The market leader, Norwich Union, lost the most market share of the top 10 in 2006 82

Churchill lost market share in 2006 as its non-comprehensive book contracted severely 82

Zurich's private motor GWP declined in 2006, leading to a contraction in market share 83

CIS's market share contracted in 2006 due to lower premium income 83

Two players, UKI and esure, saw no change in market share between 2005 and 2006 83

esure joined the top 10 private motor insurers despite decreasing private motor premium income 83

UKI saw its market share increase in 2006, though premium income declined 83

Mid-tier private motor insurers retained market share overall in 2006 84

Only a few private motor insurers in the 11-20 bracket managed to increase market share in 2006 84

AXA's private motor book rebounded in 2006 increasing by a substantial 43.5% in GWP terms 84

The NFU Mutual experienced modest premium income growth in 2006 85

Aioi Motor & General increased market share and premium income in 2006 85

Five mid-tier insurers lost market share in 2006 85

LV's market share declined by 0.3 percentage points in 2006 as it allowed premium income to contract 85

Provident's book continued to contract in 2006 as it sought to exit the UK private motor market 85

Groupama's private motor insurance book declined in 2006 86

HSBC experienced a decline in its private motor account in 2006 86

Allianz's GWP declined by more than 10% in 2006 86

Two mid-tier insurers saw minor declines in premium income but maintained market share in 2006 86

Highway's private motor book experienced a contraction in 2006, but maintained market share 86

MMA's market share remained stable although GWP reduced by 3.3% in 2006 87

Most of the top 10 insurers write some non-comprehensive and commercial business 89

Comprehensive premium income dominated the books of the largest private motor insurers 89

Six of the top 10 private motor insurers also write commercial motor insurance 91

The largest private motor insurers also tend to be the largest total motor insurers 93

The average loss ratio among the top 10 UK motor insurance providers declined in 2006 with AXA, Norwich Union and Churchill recording the biggest improvements 94

In 2006, the average loss ratio of the top 10 UK motor insurers fell by 3.3 percentage points to 71.1% 94

AXA, Norwich Union and Churchill recorded the strongest loss ratio reductions 94

Four insurers recorded loss ratio deterioration 95

The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006, with Churchill, AXA, NIG and Royal & SunAlliance recording above-average reductions 97

The average expense ratio of the top 10 UK motor insurers declined by 0.7 percentage points in 2006 97

Churchill, AXA, NIG and Royal & SunAlliance recorded above-average expense ratio decline 97

Norwich Union, Zurich and NFU Mutual recorded the highest increases in their expense ratios 98

The average combined ratio of the top 10 motor insurers fell by four percentage points in 2006, with AXA and Churchill seeing significant declines 100

The average combined ratio of the top 10 motor insurers declined by four percentage points in 2006 100

AXA and Churchill recorded significant reductions in combined ratio in 2006 101

NIG, Direct Line and Zurich recorded combined ratio increases 101

Future Decoded 104

Introduction 104

Private motor GWP is forecast to reach Pounds Sterling 12.5 billion by 2012 under neutral market conditions 104

A hardening market in 2008 and 2009 should result in significant premium rate growth 104

The UK private motor insurance market is predicted to be worth Pounds Sterling 12.5 billion in 2012 105

The private motor insurance market is forecast to reach profitability in 2009 107

Under optimal conditions the private motor market will reach Pounds Sterling 12.9 billion by 2012 109

Less competition could allow for greater price increases in 2008 and 2009 109

The market will grow by over 10% in 2008 allowing it to reach a value of Pounds Sterling 12.9 billion in 2012 110

With less competitive pricing the market will produce three years of profits 112

In the pessimistic scenario GWP will only reach Pounds Sterling 12.4 billion in 2012 as competition keeps premium inflation down in 2008 114

More intense competition will keep premium rate increases low according to the pessimistic scenario 114

The private motor insurance market will only reach a value of Pounds Sterling 12.4 billion in 2012 in the pessimistic scenario 115

Underwriting losses will continue throughout the forecast period in the pessimistic scenario 117

The total motor market, under neutral conditions, will reach a value of Pounds Sterling 16.6 billion in 2012 119

The total motor market is forecast to grow at 4.3% a year in the forecast period 119

The total market is forecast to return an underwriting profit in 2008 121

APPENDIX 124

Supplementary data 124

New registrations of cars and light goods vehicles by taxation class 124

Definitions 125

Premium income measures 125

Earned premiums 125

Gross Premium 125

Net Premium 125

Written premiums 125

Other definitions 126

Channel 126

Direct insurer/writer 126

Brokers 126

Bancassurers 126

Brandassurers 126

Platform 126

2005-06 definitions for line of business 126

Motor 126

Total private motor 126

Total commercial motor 127

Private motor comprehensive 127

Private motor non-comprehensive 127

Motorcycle 127

Fleets 128

Commercial vehicles (non-fleet) 128

Pre-2005 definitions for lines of business 128

Motor 128

Methodology 129

Primary and secondary research 129

Market size 129

Changes in market size information 129

Market size methodology 129

Lloyd's players and underwriting result figures 129

Competitor data 130

CIS 130

GWP versus GEP reporting 130

Home-Foreign, overseas and facultative reinsurance business 131

Advertising statistics 131

Isis MORI methodology and contacts 131

Sample design 132

Further reading 132

Ask the analyst 133

Datamonitor consulting 133

Disclaimer 133

List of Tables

Table 1: UK private motor insurance premium income, 2002-06, (Pounds Sterling m) 9

Table 2: Comprehensive/non-comprehensive split of the UK private car parc, 1996-2006e 12

Table 3: UK private motor insurance premium income by line of business 2002-07e, (Pounds Sterling m) 13

Table 4: Average quarterly premiums for UK comprehensive and non-comprehensive insurance, 2002-07 17

Table 5: Cars licensed in Great Britain by body type, 1996-2006 18

Table 6: New private car registrations in Great Britain by body type as a percentage of the total private car parc, 2002-06 20

Table 7: Age composition of 2006 car parc, 2006 21

Table 8: Number of motorcycles and new registrations in Great Britain, 2002-06, (000s) 23

Table 9: UK private motor underwriting result, 1996-2006, (Pounds Sterling m) 25

Table 10: Detailed private motor underwriting account in the UK, 2002-06, (Pounds Sterling m) 26

Table 11: UK net claims as a proportion of total outgoings, 2002-06, (Pounds Sterling m) 26

Table 12: Average motor claims costs, 2002-06, (Pounds Sterling) 28

Table 13: UK Average claims cost of bodily injury claims notified two years previous, 2002-06, (Pounds Sterling) 29

Table 14: Total number of road accidents in the UK, 1996-2006, (000s) 31

Table 15: Road traffic accidents relative to registered vehicles in Great Britain 1996-2006, (000s) 33

Table 16: Deaths, seriously and slightly injured casualties resulting from UK road traffic accidents, 2002-06 34

Table 17: Theft of and from motor vehicles in the UK, 1996-2006/7 36

Table 18: UK motor insurance premium income, 2002-06, (Pounds Sterling m) 39

Table 19: UK motor insurance underwriting account 1996-2006, (Pounds Sterling m) 41

Table 20: UK private and commercial motor underwriting results, 1996-2006, (Pounds Sterling m) 43

Table 21: Motor insurance GWP distribution by channel, 2002-06 46

Table 22: Distribution of private motor insurance, by platform, 2003-07 48

Table 23: Private motor retention rates, 2003-07 50

Table 24: Propensity to switch motor provider and likelihood of getting other quotes, by distribution platform, 2007 52

Table 25: Private motor retention rates by age, 2003-07 54

Table 26: Motivations for taking out a motor insurance policy, by distribution platform, 2007 56

Table 27: Reasons for choosing current motor insurance policy by age, 2007 58

Table 28: Sources of information for motor policy, by age, 2007 62

Table 29: Advertisement spending by type of insurance provider, 2006 64

Table 30: Top 10 motor insurance advertisers, 2004-06 66

Table 31: Top 10 motor insurance advertisers' spend by media, 2006 68

Table 32: Motor insurance advertisers' spending by media, 2006 71

Table 33: Top 10 TV advertisers, 2006 72

Table 34: Top 10 direct mail advertisers, 2005-6 73

Table 35: Top 10 motor insurers by advertising spend and brand awareness of motor insurers, 2007 75

Table 36: Top 10 insurance providers by spontaneous recognition, 2007 76

Table 37: Top 10 UK private motor insurers' market share in 1996, 2005 and 2006 79

Table 38: Top 10 UK private motor insurers by market share, 2002-06 81

Table 39: Top 10 UK private motor insurers by premium income, 2002-06, (Pounds Sterling 000s) 84

Table 40: UK private motor insurers ranked 11-20 by market share, 2002-06 88

Table 41: UK private motor insurers ranked 11-20 by premium income, 2002-06, (Pounds Sterling 000s) 89

Table 42: Top 10 UK private motor insurers' comprehensive and non-comprehensive shares of total GWP, 2005-06, (Pounds Sterling 000s) 91

Table 43: Top 10 UK private motor insurers' GWP split by private and commercial, 2006, (Pounds Sterling 000s) 92

Table 44: Top 10 UK motor insurers' GWP split by private and commercial, 2006, (Pounds Sterling 000s) 94

Table 45: Change in premium income compared to change in loss ratio, top 10 UK motor insurers, 2005-06 97

Table 46: Change in premium income compared to change in expense ratio, top 10 UK motor insurers, 2005-06 100

Table 47: Change in premium income compared to change in combined ratio, top 10 UK motor insurers, 2005-06 103

Table 48: Key variables affecting private motor insurance GWP, neutral scenario, 2002-12f 105

Table 49: UK private motor insurance GWP forecast, neutral scenario, 2002-12f 107

Table 50: UK private motor insurance underwriting account forecast, neutral scenario, 2002-12f, (Pounds Sterling m) 109

Table 51: Key variables affecting private motor insurance GWP, optimistic scenario, 2002-12f 110

Table 52: UK private motor insurance GWP forecast, optimistic scenario, 2002-12f 112

Table 53: UK private motor insurance underwriting account forecast, optimistic scenario, 2002 -12f, (Pounds Sterling m) 114

Table 54: Key variables affecting private motor insurance GWP, pessimistic scenario, 2002-12f 115

Table 55: UK private motor insurance GWP, pessimistic scenario, 2002-12f 117

Table 56: UK private motor insurance underwriting account forecast, pessimistic scenario, 2002-12f, (Pounds Sterling m) 119

Table 57: Total UK motor insurance GWP 2002-12f, neutral scenario, 2002-12f 121

Table 58: UK total motor insurance underwriting account, 2002-12f (Pounds Sterling m) 123

Table 59: Cars and light goods vehicles registered by taxation class, 1996-2006, (000s) 125

List of Figures

Figure 1: The percentage of consumers arranging their motor insurance online in the UK has been increasing steadily since 2003 3

Figure 2: The top 10 UK insurers controlled more of the market in 2006 than in 1996 4

Figure 3: The UK private motor insurance market grew in 2007 as premium rates hardened 9

Figure 4: Fewer vehicles had non-comprehensive cover in the UK in 2006 11

Figure 5: The main UK private motor lines once again declined in 2006 before recovering in 2007 13

Figure 6: Both sectors of the UK private motor market experienced significant premium rate inflation in 2007 15

Figure 7: UK comprehensive premium rates increased significantly in 2007 16

Figure 8: New private cars in Great Britain have declined in number since 2002 19

Figure 9: Less than a third of the UK car parc was older than 12 years old in 2006 21

Figure 10: In Great Britain, growth in motorcycle numbers has been slowing since 2005 22

Figure 11: The UK underwriting result deteriorated sharply in 2006 24

Figure 12: Average motor claims costs have risen every year since 2002 in the UK 27

Figure 13: The average UK claims cost for bodily injury claims was higher than for other claim types in 2006 29

Figure 14: UK road accidents peaked in 1997 and have fallen ever since 30

Figure 15: Accidents in the UK have fallen despite a steady increase in the number of vehicles 32

Figure 16: Casualties continued to decline across all categories in 2006 34

Figure 17: Theft of and from motor vehicles continued to decline in 2006/7 35

Figure 18: Commercial motor was the weaker market in 2006 declining more than private motor 39

Figure 19: The UK motor insurance market reported a loss of Pounds Sterling 204m in 2006 40

Figure 20: The UK private and commercial motor underwriting results diverged after 2001 42

Figure 21: The partnership channel has increased its share of the private motor market in recent years 45

Figure 22: The percentage of consumers arranging their motor insurance online has been increasing steadily since 2003 47

Figure 23: Around three quarters of motor insurance consumers stay with the same company at renewal 49

Figure 24: Consumers purchasing their motor insurance online were more likely to change their insurance provider in 2007 51

Figure 25: Older consumers were more likely to stay with their current providers in 2007 53

Figure 26: Obtaining a cheaper quote was the most common reason for choosing a provider across all distribution platforms in 2007 55

Figure 27: Reputation was a factor more valued by older consumers than younger ones in 2007 57

Figure 28: Use of web-based materials was most common among young consumers in 2007 60

Figure 29: Most older consumers value previous experiences with providers in 2007 61

Figure 30: Insurers dominate advertising spend for motor insurance, but brokers' spend grew in 2006 63

Figure 31: Television remained the medium of choice for most of the top 10 advertisers in 2006 67

Figure 32: Television and direct mail account for almost 90% of spending by advertisers ranked 11-20 69

Figure 33: Spontaneous consumer awareness of motor insurers against advertising expenditure, 2006 74

Figure 34: The top 10 insurers controlled more of the market in 2006 than in 1996 78

Figure 35: Norwich Union remained the single largest insurer in the UK market in 2006 80

Figure 36: Insurers in the 11-20 segment showed very little difference in market share in 2006 87

Figure 37: None of the top 10 insurers wrote a substantial part of their business in the non-comprehensive market 90

Figure 38: Most of the top 10 UK private motor insurers also maintain a presence in the commercial market 92

Figure 39: The top 10 UK private insurers dominate the top motor rankings due to the size of their private books 93

Figure 40: While the average loss ratio of the top 10 UK motor insurers fell in 2006, NIG and Direct Line saw increases in their ratios 96

Figure 41: Norwich Union saw the biggest increase in private motor expense ratio in 2006 99

Figure 42: NIG saw the biggest increase in combined ratio in 2006 102

Figure 43: Private motor GWP is forecast to grow significantly in 2008 and 2009 106

Figure 44: Private motor is forecast to make a small profit in 2009 108

Figure 45: Less competition allows for a stronger rally in comprehensive premium income and higher private motor GWP in the optimistic scenario 111

Figure 46: In the optimistic scenario stronger premium growth results in three years of underwriting profits 113

Figure 47: In the pessimistic scenario, GWP growth is expected to be subdued from 2008 onwards 116

Figure 48: In the pessimistic scenario, the market fails to reach a profit in the forecast period 118

Figure 49: After four years of declines, the total motor market is expected to begin growing again in 2008 120

Figure 50: The UK motor market is forecast to be profitable for a total of four years starting in 2008 122

Figure 51: New cars and light goods have declined again as a proportion of the total parc 124

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