Presentation on theme: "UFC-Que Choisirs campaigns on « Small Insurances » November 15th 2013."— Presentation transcript:
UFC-Que Choisirs campaigns on « Small Insurances » November 15th 2013
A growing number of small insurances in France A recent proliferation of small insurances : – On goods : smartphones, computers, bikes, washing machine… – On services : bank cards, flight and train cancelation, travel cancellation, water supplies… – But also : cats and dogs, wedding (!), etc. A lot of people already equipped : – A 3 billion euros market at least, fastly growing – Poll from the recent French federation of small insurances : – 81% of French consumers declare having at least 1 small insurance – 2,4 small insurance per French consumers …and its only a declarative poll, whereas one of the main characteristic of these insurance is to be missold (i.e without transparency) Two main characteristics…: – Sold by non-professional insurers (ex : in phone stores, in supermarket) – Accessory of a good or a service : the consumer dont come to buy the insurance, but the good or the service 2
A lot of complaints from consumers 3 During the sell : – Sells without the consumers consent : for example, bundled with the good – Sells without verification of the use for the consumer – An idealized presentation : if you listen to the seller, no exclusion in the contract! – The contract is only available after signature…no way to verify the assertions When using the insurance : Very large exclusions with a huge possibility of interpretation by the insurance manager. Ex : (Phone) for pickpocketing you have to be aware of the theft immediately to be reimbursed. Requalification by the insurance manager to fit in the exclusions « Low cost » repairing services When the consumer tries to terminate the insurance : In France, two legal rules : one protecting the consumer, one not… …guess which of the two is chosen by these insurances? A growing sector + a lot of complaints = an action from UFC-Que Choisir!
An action in two times 4 Due to the very large scope of small insurances, we concentrated on the archetypicals insurances, in two times : –December 2012 : phone insurances One of the most important small insurance ( 500 M), thousands of complaints Christmas : 2 millions phones sold –June 2013 : cards and water supplies insurances Cards : an insurance bundled in bank packages, owned by the majority of French consumers Water supplies : sold at a distance, without any verification by the professional of the use for the consumer June 2013 : beginning of the discussions on Consumer Protection law in the French Parliament Impose the issue during the discussions
What we discovered : phone insurances (1/2) 5 Contracts study : a lot of exclusions that make the consumer protected… ….Only in cases that nearly never exist (25% of real accidents are well-covered) ! Comparison with the statistics : ex for theft...Only in cases that nearly never exist in facts 25% of real accidents are well- covered !
What we discovered : phone insurances (2/2) An organisation of the market that facilitate complains –Attenuation of responsabilities between : Retailer : only sells the product he orderd to insurance company, so can promise « miracles » Manager : the consumer contact when a problem arrives, not tyed by what the seller said. Its aim is to avoid « too much » indemnisation. Insurance : creates the product, and pays when manager says A 80% margin for professionals! –Estimation based on accidents statistics, datas from professional press, etc. Consumers : 18% of pay-back Retailer : between 20% and 50% of the premium (hold the market) Manager : between 10 and 30% of the premium Insurance : only 10 to 15%
What we discovered : insurances for fraud by card An insurance massively sold : –Aim of the insurance : protect against fraud on payments –Sold by banks via packages, that equip at least 55% of French consumers Poor presentation of the package + of the insurance by bank employees An interest that disappeared : –Since 2009, PSD : bank must cover all remote fraud, which is the huge majority of frauds in France –+ Filings of complaints to the Police decrease (and no covering whithout complaining) –But not change in the practices, and no change in the prices! At least, a 94% margin! : –2007 : leak in the press of the results of Crédit Agricole on this insurance… –…and this huge margin was before the PSD!
What we discovered : water leaks insurance Insurance covering leaks « between water meter and house walls » -Useless for tenants (covered by the owner insurance), and flats owners (covered by their house insurance or co-ownership insurance) -Usefull for Less than 46% of French consumers : owners of houses with water meter in the garden Massive mailing campaings, without any targeting -The 1st retailer declares sending 40 millions mail/year… A confusion between water bills and insurance - Retailers (independant firms) use water suppliers logo + clients file + Use of ambiguous terms : f.e, « To be paid before march 21st» As for card insurance, a recent law limiting consumers responsability for waters leaks… …And one more time, a very profitable insurance for retailers : -Only 16% paid back to consumers!
A successful campaign 9 In media : an easy topic that interests journalists in search of scandals (cf. margins) and ways for consumers to save money - + No contesting of our figures by the professionals of the sector With members of Parliament : the mother-was-victim effect –Many MPs know relatives victims of this type of insurance No need to convince them of the necessity to regulate this sector Integration in the draft law on Consumer Protection -Creation of a cooling-off period (with conditions that we want to suppress) -Facilitation of terminating the contract (whenever you want after 1 year in the contract) Also professionals reaction -Insurers syndicate, insurance mediator now want to clean the sector