Auto insurance market is a highly coveted by a wide variety of actors: limited liability companies or mutual groups, but also banks, some without intermediary dealing with their customers while others use the services of general agents or brokers. Decided required by law, motor insurance is often not collected from consumers who have a great sensitivity tariffs. The market is therefore delivers a fierce price war. To preserve their margins, insurers must compete inventiveness.

Axa and Macif compete for first place
Six players exceed, in 2005, one billion euros turnover in auto insurance. The international group Axa dominates the market with 2 billion euros of premiums collected, even though it was only second in terms of number of contracts sold (about 4.2 million out fleets of companies and motorcycles). A difference is explained by its economic model: sales are conducted by a network of 3,800 general agents who receive a margin on each contract, even increasing its price.

On the contrary, Macif, mutual group without an intermediary, a practice lower prices and ranks first in terms of sales volume with about 4.7 million contracts, for a turnover of 1.7 billion euros . So qu’Axa has managed to preserve its market share, Macif has suffered from price wars on his heart activity (40% of its turnover is done on the car).

The approximation of three mutual threat leaders
The group Groupama-GAN, born of the merger of two insurers in 1998, ranks third in both value and volume. But this place is also coveted by all trained by Maaf Assurances and MMA. Distinctes commercially, these brands have decided to pool their resources since 2000, under the structure Covéa. Additionnés, the results of Maaf and MMA and exceed those of Groupama.

In 2006, another player of the World mutual Covéa has also joined the group Azur-GMF. The synergies should begin to read in the results of 2007. The consolidated turnover of these three actors then exceed that of leader Axa.

The mutual Maif, originally reserved for officials of National Education since 1988 but opened to the rest of the population, ranks fifth with nearly 3 million contracts sold. Overdue for tariff purposes, Maif benefits instead of one of the lowest rates of termination of the contract. AGF, limited liability company acquired by German giant Allianz of insurance in 1997, came sixth with 2.5 million vehicles insured.

A price war which slows
In recent years, the market for auto insurance was hit by a phenomenon of deflation, fuelled by the government, concerned that declining mortality on the roads would result in a reduction in insurance premiums for motorists. But the price war that has been delivered insurers french steam. “The rates reported for 2007 are down only 2%, against 5 to 10% in 2005 and 2006, and they are often ad marketing,” says Cyril Chartier-Kastler, vice-president of Solving International, consulting firm which conducts an annual study on the insurance sector.

Indeed, if it is justified by the fall in the number of claims, falling prices pose problems for insurers profitability. “The number of fatalities on the road is reduced but not that serious injuries which are more expensive to the insurer,” says Cyril Chartier-Kastler. Not counting the rising costs of repair material and medical care, and the increase in payments for damages decided by the courts. Given this inflation of claims, reinsurers, which are turning to insurers to cover a portion of their risks, are also increasing their premiums. An extra cost which reduces the margins of insurance companies.

The escalation marketing to preserve margins
To solve this equation raised against them, insurers are required to compete innovation in marketing. Everyone will guarantee its exclusive option, mainly geared towards improving the service provided to the insured: guarantee for mechanical breakdowns immobilizing the vehicle, assistance “kilometer zero”, a car loan replacement … Most insurers are now backed by an expert assistance, either with its subsidiary AGF Mondial Assistance, Generali with Europ Assistance or mutual Maif, Maaf, Macif and Matmut, allies in the GIE Ima. “The objective is to provide services whose value is difficult to calculate by consumers and generate strong margins and” analysis Cyrille Chartier-Kastler. But this innovation strategy has its limits: in this highly competitive market, an insurer does not in fact a long-standing exclusivity and counters recover easily from scratch.

Insurance companies such as Axa and AGF have adopted, however, a strategy of differentiation of the offer: they segment their customer file, searching for profiles overbilled (couples, young drivers, drivers of vans …) And break the market prices. A strategy that is no more sustainable than others but which allows timely boost subscriptions.

Streamline the expenditure incurred by claims
To preserve their sustainable margins, insurers are moving mainly to an optimization of their expenditure, namely repair costs. “Most insurers now have an industrial management of claims, allowing them to make gains on their cost price,” says Cyril Chartier-Kastler. The aim is to concentrate a maximum of repairs at a limited number of repairers with whom hourly rates and the number of hours of labor are negotiated. The wholesale prices are also discussed with suppliers, while focusing on repairing damage to the replacement of parts.

Alliances between insurers become particularly strategic in this industrialization strategy for the management of claims. The group formed by Maaf, MMA and Azur-GMF should be able to generate significant synergies in this area and improve both the ratio of premiums / cost of claims. Spending on health and damages, however, are much more difficult to rationalize. They, however, weigh heavily on the results of insurers.

A competitor of size: bancassurance
To complete this competition between actors historic automobile insurance, new entrants are emerging, though determined to steal their market share. The first is direct insurers, which operate on the Internet in particular, like Direct Insurance. But their success remains limited: “Unlike countries like the United Kingdom, French law provides for the automatic renewal of insurance contracts, analysis Cyrille Chartier-Kastler. It is therefore very difficult for new entrants to take shares market to others. ”

However, competition from banks is seen as a far greater threat. If for the moment only two players can be compared to the major insurers, Credit Mutuel (ACM) and Credit Agricole (Pacifica), the margin of increase of all bancassureurs is very strong. “In 2020, an operator as Credit Agricole will be before the Macif,” predicts the vice-president of Solving International. To their credit, banks have dense distribution networks and close to customers and a powerful computer system, allowing them to offer insurance products tailor-made. But they rely primarily on their customer databases, rich in lessons on the risk profile of each insured potential. They can make a selection of the risks before the contract. A key competitive advantage that traditional insurers, even throwing offers banking, will find it difficult to counter.