The breakdown assistance market - France

1.2 A growing worldwide breakdown assistance market

Size of the automotive assistance market Worldwide, ****-****, in billions of US$ Source: ****

In ****, the global automotive assistance market was valued at US$**.* billion; this value is expected to grow at an average annual rate of *.*%, reaching US$** billion in ****. However, ****, the year of the coronavirus health crisis, saw a *% drop in market size (***). Estimates of market development up to **** were made before the covid-** crisis, but remain a good indicator of recovery. Nevertheless, longer-term projections give a market size of $** billion in ****. [***]

Among the main drivers of this growth is an increase in the average age of cars. Asia will also experience considerable growth over this period, with an increase in the purchase of private vehicles. The renewal of the vehicle fleet towards more hybrid or electric cars - especially in developed countries - should also stimulate the sale of assistance contracts. In addition, the emergence of connected cars will enable the production of useful data for the development of the sector.

1.3 The French automotive assistance market is growing steadily

The assistance market in France:

Breakdown assistance - also known as automobile assistance - accounts for almost **% of the assistance market. Below is an analysis of the assistance market in France

According to the SNSA (***), sales generated in France by French assistance providers grew by *.*% between **** and **** to reach *.* billion in **** [***]

The graph shows that the market has been rising structurally for a decade, with a gradual increase of **% between **** and **** (***). However, in ****, the year of covid-**, growth has come to a halt, and the market has even fallen slightly by *.*%.

Evolution of assistance sales between **** and **** France, ****, in billions of €

The French assistance companies' share of sales is only **%, which underlines the importance of the global market for these players.

The automotive assistance market in France:

Automotive assistance accounts for **.*% of French assistance providers' sales in France, i.e. €*.*** billion in ****.[***]

The graph below highlights growth of almost *% between **** and **** and between **** and ****, before slowing in **** (***) and the emergence of hybrid and electric cars, which require specific offers. [***]

Evolution of automotive assistance sales between **** and **** France, ****-****, in billion euros Source: ****

Automobile assistance accounts for **.*% of cases handled by French assistance companies: that's nearly * million cases handled in France in ...

1.4 Estimated breakdown and towing market in France

As breakdown assistance providers are their main customers, we can try to assess part of their market through the number of cases handled by them.

Below is a breakdown of the number of cases handled by breakdown assistance providers since ****. As a result, more and more people are using breakdown assistance services, which are becoming the preferred intermediaries between breakdown service providers and users with vehicle breakdown or accident problems.

Increase in the number of breakdown cases handled by assistance providers France, ****-****, in millions of cases Source: ****

If we take an average price per claim of between €*** and €*** (***). According to the SNSA, sinitres were less frequent in ****, but more costly.

Nevertheless, the activity of tow trucks is greater than that for two reasons:

Users who are victims of breakdowns or accidents sometimes call tow trucks directly Tow trucks may be called upon by other parties, such as the police in the event of impounding, stolen vehicles or accidents, or by freeway companies in certain cases

1.5 The impact of the Covid-19 crisis on the sector

A difficult year for breakdown services:

As a result of the containment, the decline in car use was very negative for breakdown services, with a significant drop in the number of automobile claims. MAIF estimates that the eight-week confinement resulted in savings of around *** million euros, compared with a normal situation. In this way, assistance providers benefited from the confinements, while breakdown services did not (***). mAIF, however, has decided to pass on the savings to its policyholders.

The fall in road traffic in **** can be measured by ..:

**% drop in road deaths in **** compared with **** **% drop in traffic in April ****[***]

Despite everything, a complex but rather positive summer period:

The Syndicat National des Sociétés d'Assistance (***) points out that summer **** saw a *% increase in activity compared with ****.

Automobile assistance business has thus been particularly cyclical with : [***]

a *% drop in July **** vs. **** a *% rise in August **** vs. ****

This can be explained by the fact that, in the health context of Covid-**, holidaymakers preferred to spend their vacations in France - which implies more car travel, but were slow to move.

Assistance companies noted several salient points over this period:

a fall in the number of accidents, but a higher proportion of ...

2.1 Demand drivers for assistance providers

For assistance providers, demand for assistance contracts depends on :

the number of vehicles registered in France, and those passing through France each year the number of users subscribing to automobile assistance contracts, often offered as a warranty extension.

The graph below shows the trend in the number of vehicles registered in France, which has been rising since ****. There are *.* times as many registrations of used vehicles - which are on average more likely to break down - but their share has fallen since ****.

number of registrations (***): new, used and ratio France, ****-****, in millions of units Source: ****

On average, according to Mondial Assistance, calls received for breakdown assistance concern a breakdown in */* of cases, and an accident the rest of the time.

Estimated share of breakdown and accident calls France, ****, in Source: ****

2.2 A steadily rising average age

According to the CCFA, the average age of the French car fleet has been rising steadily for several years, reaching an average of **.* years in ****. According to the organization, this high figure reflects "the inability of a large number of French people to change their cars more frequently", despite measures such as the conversion bonus.

However, the fact that households keep their vehicles longer means more accidents or breakdowns, and therefore more business for breakdown services.

Change in average age of vehicle fleet France, **** - ****, in average age of fleet Source: ****

However, this figure of **.* years can vary depending on the département:

For example, it is *.* in Île-de-France, compared with **.* in Pays de la Loire. It is higher in some rural départements: in Ariège, Creuse, Dordogne and Lot, up to *% of vehicles date from before ****. In Hauts-de-Seine, the fleet is the most recent, with nearly half of all cars less than * years old

According to AAA Data, there will be ** million cars registered in ****, but only */* of them will be on the road - around ** million cars. [***] However, it should be noted that */* of vehicles on the road are less than * years old (***).

What's more, according to AAA ...

2.3 Most frequent causes of car accidents by type of part affected

For used cars, power systems, electronics and the engine are the three main causes of claims. These three causes account for almost half of all claims.

Claims frequency by parts group for used cars France, ****, in Source: ****

For new cars, the two main causes are the power system and electrical installations. The engine is less often a problem in new cars than in used cars. [***]

Claims frequency on new cars (***) by parts group France, ****, in Source: ****

2.4 A fall in road accidents in France

The graph below highlights the trend in the number of accidents in France, which has been declining over the last ten years. This is likely to have a negative impact on convenience store business. In ****, the number of road accidents will fall sharply (***), perhaps largely as a result of containment due to the health crisis.

road accident trends France, ****-****, in thousands Source: ****

2.5 Seasonal demand that also depends on the weather

The busiest time of the year for assistance providers - both assistance and breakdown services - is the summer vacation period. The car remains the preferred means of transport for vacation travel.

The sector's business peaks are therefore closely linked to peak traffic periods. The densest traffic areas are therefore also the hardest hit. [***]

Climatic hazards also have an impact on breakdown service operations:

in the event of heatwave: risk of engine overheating, for example in very cold weather: greater risk of engine failure, risk of accidents due to icy or snowy conditions inclement weather: higher-than-average accident rate

3.1 Segmentation and player dynamics

Classic" value chain:

While accident victims can logically call breakdown and towing companies directly, they more often than not go through assistance companies, as most users include breakdown assistance in their car insurance.

Analysis of assistance companies:

There are two types of breakdown assistance company:

general assistance providers such as Europ Assistance or Inter Mutuelle Assistance manufacturer-affiliated assistance providers (***)

The market shares of the biggest players in France are shown below. Market share corresponds to total sales of automobile assistance in France in ****.

Market share of the main assistance providers in France France, ****, in % of French sales Source: ****

In terms of their competitive strategy, players are competing by trying to improve the following points:

a large, high-quality network of partner service providers partnering with manufacturers (***): for IMA, this segment is growing by **% between **** and **** Customer satisfaction (***) Adapting to changes in the mobility market

These are mainly global players who generate the majority of their sales outside France and have international subsidiaries.

Analysis of companies specializing in breakdown towing:

According to Décision Atelier, the magazine for the automotive repair and service sector, assistance companies are imposing heavy service specifications, while tow truck rates remain low. This is what the FNA (***) is ...

3.2 Tow-truck operators in France: analysis of vehicle fleet and distribution of companies

Fleet analysis:

According to ANFA (***), there are more than **,*** breakdown vehicles in ****. The graph below shows an average annual increase of almost *% since ****.

In total, since ****, the fleet has increased by almost **%.

Breakdown service vehicle fleet in France France, ****-****, in thousands of vehicles Source: ****

In ****, **% of the vehicle fleet was made up of heavy vehicles (***), but light vehicles were experiencing more significant growth.

Breakdown of recovery vehicle fleet by GVWR France, ****, in Source: ****

Breakdown of specialist breakdown services in France according toAnnuaire Pro L'argus:

On average, there are *,*** breakdown service companies listed in this Argus directory, with an average of *** companies per region.

The map below shows the number of breakdown services by region (***).

Breakdown of companies offering breakdown services in France

France, ****, in number of companies

3.3 Analysis of the distribution of breakdown assistance contracts

Breakdown assistance is usually an option in car insurance contracts. [***]

Traditionally, automobile assistance coverage is an extension of the warranty included in an automobile insurance contract.

The manufacturer may also offer an assistance service when the vehicle is purchased.

The increase in the number of contracts can be partly attributed to the Hamon law (***), which provides for the possibility of cancelling one's car insurance at any time once the first year of the contract has passed. Cancellation and formalities can even be handled by the new insurance company.

The development of online services is a major change in distribution for the breakdown assistance sector (***).

In the event of a claim, the telephone remains the most effective way of contacting assistance companies via their call-centers, which will seek to resolve the problem and put you in touch with the appropriate breakdown mechanics.

Assistance without prior affiliation:[***]

It's possible not to be affiliated to an insurance company, but to call on an assistance provider in the event of a breakdown, for a higher price on average. Mobile applications such as Mobly or Charlie ** make this possible. Here are some examples,Moblyallows you to subscribe to temporary breakdown assistance - particularly for car rentals ...

4.1 The breakdown and towing service: analysis of services

A distinction is made between breakdown and towing services:

Breakdown service (***) involves repairing the vehicle on site or in a secure area nearby, usually when the job is straightforward. According to MC Dépannage, between ** and **% of their breakdown services are resolved on site [***] Towing involves evacuating the vehicle and transferring it from the site to another location, which may be their own workshop or an auto repair company. Towing can be carried out by winching, lifting or craning.

Our main services include

Various mechanical and electronic repairs Fuel delivery in the event of breakdown Vehicle unlocking in the event of lost or stolen keys Flat tire assistance Battery failure

Tow truck drivers try to identify the problem in advance, so that they can arrive with the right vehicle (***) and the right tools, while ensuring the safety of the intervention.

If the vehicle cannot be repaired, a vehicle loan may be arranged.

Every time a service is carried out, there is an administrative side to the job, as the breakdown mechanics have to create an assistance file.

The main constraints of the business include

Availability: usually ** hours a day, * days a week Dangerousness and variety of intervention situations (***) speed of ...

4.2 Average prices for breakdown assistance contracts according to services covered

Price trends:

The graph below highlights the rise in consumer prices for motor vehicle insurance - which includes breakdown assistance. This gives an idea of the upward trend in underwriting prices.

Evolution of the consumer price index for motor vehicle insurance France, ****, in Source: ****

evolution of the price of an assistance file for assistance providers :

If we divide French sales of motor assistance (***), we obtain a price of around €*** per breakdown assistance contract in **** . in ****, if the same operation is carried out, we obtain a price of around €*** , reflecting the rising cost of services.

A price range that depends on the services covered.

The price of a car insurance policy depends on a multitude of factors that are asked for at the time of underwriting, enabling the insurer to better define the risk and price.

Driver's age Type of vehicle, date of purchase and use Age of driving license Type of use (***) The identity and characteristics of other potential drivers of the car

The price of the breakdown assistance extension - often offered as an option - depends on :

the types of accidents or breakdowns covered the geographical area covered the number of guarantees and services covered (***)

Reassure me offers a ...

4.3 Prices for the breakdown service itself

Cost of claims:

The average cost of a car breakdown in **** was €***, up €** on **** and €** on ****. This increase is notably linked to increasingly complex vehicle functionalities.

The graph below analyzes the cost of breakdowns - by type of breakdown - for new vehicles with extended warranty. It gives an idea of the most expensive breakdowns by analyzing the breakdown cost according to the type of breakdown.

Engine and fuel systems remain the most expensive breakdowns (***), followed by electrical installations and gearboxes for new cars.

Breakdown of claims costs (***) for major claims France, ****, in Source: ****

The graph below shows the same analysis for used vehicles. We can see that the engine remains the most expensive, along with the fuel system.

Breakdown of claims costs (***) France, ****, in Source: ****

Average roadside breakdown rates according to Ooreka :

The cost of repairing a car depends on the type of service and the service providers involved, and can therefore vary according to :

Towing costs: depending on the distance covered to the garage; Additional services ; Depending on where the vehicle is immobilized: road, expressway, freeway; Possible supply of car parts; The time spent at the breakdown site, as well as the time slot and day of the week. The ...

4.4 Technology at the heart of changes in the breakdown assistance offer

New breakdown solutions are emerging thanks to technological advances and the rise of connected vehicles - while distribution is going digital.

The rise of connected vehicles :

Connected vehicles make it possible to transmit information thanks to geolocation techniques, and to signal problems in order to avoid breakdowns upstream: for example, by signalling that the oil needs changing.

What's more, connected vehicles can help avoid accidents thanks to techniques such as emergency braking: according to [***], there will be an **% reduction in accidents by **** thanks to connected and autonomous vehicles.

Some automakers, such as Tesla, are working on remote diagnosis of problems to both :

identify the fault solve the problem remotely

This has an impact on assistance providers in cases where manufacturers manage these problems themselves.[***]

The digitization of automobile assistance:

Automotive assistance professionals are gradually dematerializing their procedures (***).

The NOMAD platform :

The SNSA is also offering its members a common platform to simplify tools for breakdown and towing companies. By means of an automatic "missionnement" process, the assistance company can exchange information with a tow truck operator via a mobile application, thereby increasing the efficiency with which files are handled. The result is improved service quality.

In ****, over * million missions were automatically ...

4.5 The future of breakdown assistance is linked to that of the transport sector

Europ Assistance emphasizes that"breakdown assistance" is gradually evolving into"mobility assistance" given the diversification of means of transport.

Euro Assurance offers assistance for the following types of vehicle:

Assistance providers will have to adapt their offer to the changing transport market and its practices. A diversification of contracts is thus underway, which also takes into account new forms of practice such as :

uberization (***) self-service car sharing car-sharing

Electric vehicles:

Electric vehicle registrations in France France, ****-****, in thousands of vehicles Source: ****

the graph below underlines the growth and popularity of electric vehicles, particularly since ****, which will require service networks to adapt in a number of ways:

Different repair techniques (***), hence the need for training in this area Knowledge of recharging points in the event of breakdowns due to lack of energy

Vehicles of the future:

Insurers need to be ready for the arrival of "vehicles of the future" - autonomous and driverless vehicles - which are changing the concept of Civil Liability: liability could therefore shift to the program or the manufacturer.

For while autonomous vehicles are designed to eliminate accidents, the cohabitation of these and "conventional" vehicles must be put in place to avoid anarchic situations.

These autonomous vehicles ...

5.1 A precise regulatory framework

As stated by theAFNAcar breakdown assistance professionals are subject to a number of very specific regulations. To be able to carry out their activity, they must be able to justify several elements:

B*XL electric or hybrid vehicle breakdown and towing authorization. B*XL battery operation authorization. B driving license BE and CE permits, if a trailer weighing over ***kg is used FIMO (***): training to drive vehicles with a gross vehicle weight of over *.* tons, provided that driving is part of their main activity FCO (***): to perfect practical and theoretical knowledge CACES (***) for driving lifting equipment

Vehicles must meet a number of requirements:

lifting and towing equipment adapted to the vehicle's weight special visibility, signalling and safety equipment (***) Prefectoral authorization for the use of vehicles on the road

Certifications to guarantee the quality of our business include

qualicert" qualification: "Breakdown, towing, guarding and transfer services for end-of-life light vehicles". NF ***: "Breakdown/towing service for light vehicles".

Finally, there are * Certificats de Qualification Professionnelle:

CQP Dépanneur-Remorqueur VL CQP Dépanneur-Remorqueur PL

In ****/****, ** people are taking one of these CQPs. Given the demanding profiles required, it is difficult for breakdown service providers to recruit.

The profession is also regulated according to the ...

6.1 Segmentation

Examples of specialized breakdown services:

DRTM A.D.R.A

• Opteven
• Acta Assistance
• Powerpanne Masternaut
• Inter Mutuelles Assistance GIE
• Europ-assistance
• Mutuaide (Groupama)
• Assuristance Groupe
• Allianz Voyage - Mondial Assistance
• Mapfre
• Assistance AGA
• Fidélia Assistance (Covea)
• Modulotech
• Homeserve
• Dépannage la France
• Depann’moi
• NANCY DÉPANNAGE
• VAR ASSISTANCE
• Observatoire de l’assistance
• EGP Dépannage
• MC Dépannage