Affinity and Partnership Marketing in UK Motor and Breakdown Recovery Insurance


April 1, 2010
105 Pages - SKU: FIN2664126
License type:
Table of Contents Related Reports
0.0 EXECUTIVE SUMMARY
Research background and structure
Online aggregators and brokers, and automotive manufacturers and associations are key partners
The operating models in use contrast sharply between these two products
The four brokers of motor insurance with the most relationships gain these in very different ways ....
Automotive manufacturers, building societies and trade unions provide many single partnerships ....
The AA and RAC draw their distribution relationships from a range of categories...
... while Green Flag works with packaged accounts and cards, and with insurers themselves
Aggregators are becoming the dominant distributors for motor insurance
Breakdown recovery insurance providers can distribute by both aggregation and bundling
1.0 INTRODUCTION
Rationale
The channels used to distribute financial products and services in the UK continue to proliferate
Methodology
Finaccord
UK affinity and partnership marketing publications
Other UK consumer research publications
UK small business financial services research publications
PartnerBASE™
Definitions
2.0 MARKET OVERVIEW
Affinities and partnerships in UK motor and breakdown recovery insurance
Finaccord’s research identified close to 300 affinity schemes for motor insurance
These are divided across 25 sub-categories of partner
External brokers are used by over a half of all distributors
Heath Lambert and Parliament Hill have many partnerships in very specific areas...
... Aviva, Liverpool Victoria and RSA have partnerships spread across diverse affinity groups
Over 250 affinity schemes exist for breakdown recovery insurance - not far behind motor
All automotive associations featured in this study sell breakdown recovery insurance
Two thirds of operating models are single partnerships
The AA and RAC still have the most partnerships, under their own brand name
... while Green Flag works with banks and insurers
Benefits providers dominate broker partnerships by number of relationships
3.0 NOT-FOR-PROFIT AFFINITY GROUPS
3.1 Charities
Introduction
Analysis of partnerships
Heath Lambert has partnerships with medical charities and RSA works with ‘Motability’...
... while Grove & Dean holds the most ‘fund raising’ partnerships
Intune may benefit from the merger of Age Concern and Help the Aged to form Age UK…
… and the company generated its first year of profits in the 12 months to March 2009
No breakdown recovery provider has targeted charities for partnership marketing
3.2 Lifestyle organisations
Introduction
Analysis of partnerships
The Camping and Caravanning Club has separate partners for different types of vehicle
The Environmental Transport Association has partnerships with other lifestyle organisations
3.3 Political parties
Introduction
One partnership exists for breakdown recovery insurance, but none for motor
3.4 Professional associations
Introduction
28 professional associations possess in excess of 30,000 individual members
Analysis of partnerships
Brokers are the key insurance partners for professional associations...
... but only three insurance partners hold more than one relationship
Like Parliament Hill, HMCA includes breakdown recovery insurance in benefits packages
3.5 Sports organisations
Introduction
Only two sports organisations offer motor insurance to their members...
... compared to six for breakdown recovery insurance
3.6 Trade associations
Introduction
Analysis of partnerships
Motor insurance is offered to members as an extension of other relationships...
... in sharp contrast to breakdown recovery insurance, where partnerships with the AA dominate ...
3.7 Trade unions
Introduction
Analysis of partnerships
UIA acts as a broker for motor insurance, and does not underwrite this itself
Partnerships for breakdown recovery insurance are rarer than for motor insurance
3.8 Universities
Introduction
Motor-related products have little connection to universities although two relationships exist
4.0 FINANCIAL PARTNERS
4.1 Banks
Introduction
Analysis of partnerships
Banks do not offer aggregation services for motor insurance through their own websites...
… although some, like Santander, are using their brand on aggregators’ websites...
... but none have breakdown recovery insurance as a stand-alone product
4.2 Building societies
Introduction
Analysis of partnerships
Fewer building societies offer motor insurance than travel insurance
The provision of breakdown recovery insurance through building societies is on the retreat
4.3 Credit unions
Introduction
Analysis of partnerships
Heath Lambert is the main broker for credit unions, through MEMBERS Financial Services...
...although breakdown recovery is not offered by MEMBERS Financial Services
4.4 Friendly societies
Introduction
Analysis of partnerships
Motor-related products do not fit easily with friendly societies’ focus on investments and health
4.5 Insurance companies
Introduction
Analysis of partnerships
Six white labelling deals exist for motor policies among insurance brands…
… split between non-life insurers, active life insurers and ‘zombie’ life offices
Green Flag is the leading external provider for breakdown recovery among insurers
4.6 Online aggregators and brokers
Introduction
Analysis of partnerships
Motor insurance is the central product in the ascent of the aggregator...
... although leading aggregator brands operate mostly through their own brand, not partners
Europ Assistance has the most partnerships for breakdown recovery - including major brokers
4.7 Packaged accounts and payment cards
Introduction
Analysis of partnerships
Breakdown recovery insurance is one of the key additions for packaged accounts
Both the AA and RAC are currently used by brands within the Lloyds Banking Group
4.8 Pawnbrokers, cheque cashers and providers of foreign exchange and remittance
services
Introduction
Customers in this category could be serviced by a high-risk insurance specialist
4.9 Specialized lenders
Introduction
Analysis of partnerships
Only three specialized lenders distribute motor insurance
5.0 COMMERCIAL ENTITIES
5.1 Airlines
Introduction
No airline offers motor or breakdown recovery insurance - could ‘no frills’ airlines launch this?
5.2 Automotive associations
Introduction
Analysis of partnerships
Automotive associations use differing operating models for selling motor insurance
5.3 Automotive dealers, repair shops and supermarkets
Introduction
Analysis of partnerships
Several dealer groups have a centralized approach to selling motor insurance
For breakdown recovery insurance, the AA is the most commonly used provider
5.4 Automotive manufacturers
Introduction
Analysis of partnerships
Relationships for motor insurance are volatile, and can change further with industry restructuring ..
The number of relationships attributable to UK Insurance has halved since 2008…
… with Vauxhall now utilizing both a joint venture underwriter and a single, external partner
Three providers share manufacturers’ breakdown recovery partnerships between them
5.5 Estate agents
Introduction
One estate agent chain offers motor insurance - for high value cars only
5.6 Football clubs
Introduction
Analysis of partnerships
Clubs’ multi-product financial services divisions have closed after a brief existence
Motor insurance is offered as part of a range of non-life products...
... although the majority of these partnerships have changed since 2008
Breakdown recovery insurance is rarely marketed as a stand-alone product by football clubs
5.7 Internet, media and telecoms entities
Introduction
Analysis of partnerships
Online aggregators and brokers are the main partners for Internet, media and telecoms entities ....
BeatThatQuote.com has signed multiple partnerships rather than develop a B2C brand...
... while some other aggregators have preferred to concentrate on their own brand instead
Partnerships for breakdown recovery insurance occur less frequently in this segment
5.8 Online price comparison providers
Introduction
Analysis of partnerships
Only one price comparison site offers both motor and breakdown recovery insurance
5.9 Retailers
Introduction
Analysis of partnerships
Motor insurance is a core product for retailers offering a wide range of financial products
Tesco is aiming to double its volume of customers with a motor or household policy
Argos has followed Tesco into the market for retailer-branded aggregation services
Only BDML Connect works with more than one retailer group for motor insurance
All relationships for breakdown recovery insurance are with a single partner
5.10 Travel companies
Introduction
5.11 Utilities companies
Introduction
Failure to sell household insurance bodes ill for motor and breakdown recovery insurance
5.12 Other commercial entities
Introduction
Branded conglomerates
Four diverse organisations are now classified as ‘branded conglomerates’…
… with Virgin planning an ambitious expansion of its financial services activities
easyGroup concentrates on banking rather than insurance
Loyalty schemes
The loyalty schemes category includes programs based around leisure, shopping and travel
AIRMILES, ipoints and Nectar have very different profiles and histories
Both ipoints and Nectar possess partners for motor and breakdown recovery insurance
The Post Office
The Post Office is a major distributor of non-life insurance
GRAPHICS / TABLES
The affinity and partnership marketing universe
Entities contacted for the research, segmented by broad category
Affinity and partnership marketing schemes for motor insurance in the UK: penetration by type of partner
Affinity and partnership marketing schemes for motor insurance in the UK: segmentation by operating model and
competitor
Affinity and partnership marketing schemes for breakdown recovery insurance in the UK: penetration by type of
partner
Affinity and partnership marketing schemes for breakdown recovery insurance in the UK: segmentation by
operating model and competitor
Charities offering motor insurance: penetration, operating models and share of partnerships
Charities offering breakdown recovery insurance through partnerships
Lifestyle organisations offering motor insurance: penetration, operating models and share of partnerships
Lifestyle organisations offering breakdown recovery insurance: penetration, operating models and share of
partnerships
Politicial parties offering breakdown recovery insurance through partnerships
The top 30 professional associations in the UK ranked by member numbers, 2010 (data)
Professional associations offering motor insurance: penetration, operating models and share of partnerships
Professional associations offering breakdown recovery insurance: penetration, operating models and share of
partnerships
Sports organisations offering motor insurance through partnerships
Sports organisations offering breakdown recovery insurance: penetration, operating models and share of
partnerships
The top 75 trade associations in the UK ranked by member numbers, 2010 (data)
The top 75 trade associations in the UK ranked by member numbers, 2010 (data) (continued)
Trade associations offering motor insurance: penetration, operating models and share of partnerships
Trade associations offering breakdown recovery insurance: penetration, operating models and share of
partnerships
The top 40 trade unions in the UK ranked by member numbers, 2010 (data)
Trade unions offering motor insurance: penetration, operating models and share of partnerships
Trade unions offering breakdown recovery insurance: penetration, operating models and share of partnerships
Universities offering motor and breakdown recovery insurance through partnerships
Banks offering motor insurance: penetration, operating models and share of partnerships
Building societies offering motor insurance: penetration, operating models and share of partnerships
Building societies offering breakdown recovery insurance through partnerships
The top 20 credit unions in the UK ranked by member numbers (data)
Credit unions offering motor insurance: penetration, operating models and share of partnerships
Credit unions offering breakdown recovery insurance through partnerships
The top 25 friendly societies in the UK ranked by member numbers, 2008 (data)
Friendly societies offering motor and breakdown recovery insurance through partnerships
Insurers offering motor insurance: penetration, operating models and share of partnerships
Insurers offering breakdown recovery insurance: penetration, operating models and share of partnerships
Online aggregators and brokers offering motor insurance: penetration, operating models and share of partnerships
Online aggregators and brokers offering breakdown recovery insurance: penetration, operating models and share
of partnerships
Packaged accounts and payment cards offering breakdown recovery insurance: penetration, operating models
and share of partnerships
Specialized lenders offering motor and breakdown recovery insurance through partnerships
Automotive associations offering motor and breakdown recovery insurance through partnerships
Automotive dealers, repair shops and supermarkets offering motor insurance: penetration, operating models and
share of partnerships
Automotive dealers, repair shops and supermarkets offering breakdown recovery insurance: penetration, operating
models and share of partnerships
Automotive manufacturers offering motor insurance: penetration, operating models and share of partnerships
Automotive manufacturers offering breakdown recovery insurance: penetration, operating models and share of
partnerships
Football clubs offering motor insurance: penetration, operating models and share of partnerships
Football clubs offering breakdown recovery insurance through partnerships
Internet, media and telecoms entities offering motor insurance: penetration, operating models and share of
partnerships
Internet, media and telecoms entities offering breakdown recovery insurance: penetration, operating models and
share of partnerships
Online price comparison sites offering motor and breakdown recovery insurance through partnerships
Retailers offering motor insurance: penetration, operating models and share of partnerships
Retailers offering breakdown recovery insurance: penetration, operating models and share of partnerships
Branded conglomerates offering motor and breakdown recovery insurance through partnerships
Loyalty schemes offering motor and breakdown recovery insurance through partnerships
 
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