Affinity and Partnership Marketing in UK Motor and Breakdown Recovery Insurance : Market Research Report

Affinity and Partnership Marketing in UK Motor and Breakdown Recovery Insurance

Published: Jan. 1, 2008 - 120 Pages

0.0 EXECUTIVE SUMMARY: Research background and structure; Over a half of organisations surveyed in eight sub-categories offer motor insurance…; … with the vast majority of programs identified now utilising a brokerage operating model…; … albeit the leading providers in the affinity marketplace include underwriters as well as brokers; Most schemes for breakdown recovery insurance are placed directly with the ultimate provider…; … with a number of smaller assistance firms challenging the dominance of the AA and the RAC; A variety of competitors are well-placed to profit from the likely future trends in affinity marketing; … and there is scope for comparing developments in the UK with those in cont.; Europe
1.0 INTRODUCTION: Finaccord; UK affinity and partnership marketing publications; Other UK consumer research publications; PartnerBASE™; Definitions; Rationale; The channels used to distribute financial products and services in the UK continue to proliferate…; … with on-line affinity and partnership marketing having growing rapidly in importance of late; Methodology
2.0 MARKET OVERVIEW: Affinities and partnerships in UK motor and breakdown recovery insurance; Finaccord’s research identifies 339 current affinity schemes for promoting motor insurance…; … of which a majority are now based around brokerage or ‘open architecture’ solutions; Breakdown recovery insurance is sold by at least a proportion of 24 types of affinity partner…; … with the AA and RAC combined accounting directly for over 40% of the programs traced
3.0 NOT-FOR-PROFIT AFFINITY GROUPS
3.1 Charities: Introduction; Analysis of partnerships; Motor insurance sold through charities works most effectively when there is a clear rationale…; … although pure revenue generation can be an objective in its own right; Just two charities maintain stand-alone agreements for road assistance; … and the company is interested in working with suppliers that fulfil a variety of criteria; intune is employing a multi-channel distribution strategy including the charity’s high street outlets; … as it seeks to reach an operating profit of £15 million per annum by 2012
3.2 Professional associations: Introduction; Over 50 professional associations possess in excess of 5,000 individual members; Analysis of partnerships; The vast majority of professional associations offering motor insurance do so through a broker…; … with Parliament Hill having expanded its roster of member benefits clients to 11 associations; A further four brokers each claim to more than one deal in the professional association segment; The RAC maintains direct, exclusive relationships with a quartet of professional associations
3.3 Sports organisations: Introduction; Analysis of partnerships; Several affinity deals are in place for one or both of motor and breakdown recovery insurance
3.4 Trade associations: Introduction; Analysis of partnerships; Personal lines are sometimes offered as a ‘carry over’ from commercial insurance schemes…; … which signifies that this is a field in which relationships are dominated by insurance brokers; For breakdown recovery insurance, RAC is affiliated to several associations through LogBuy
3.5 Trade unions: Introduction; Analysis of partnerships; LV=, Norwich Union and UIA are the foremost providers of motor insurance to trade unions…; … although a number of unions prefer to collaborate with companies outside of the leading trio Britan; nia Rescue lays claim to the highest number of exclusive deals for road assistance
3.6 Other not-for-profit affinity groups: Introduction; Lifestyle organisations; A number of schemes for motor-related policies are in evidence among lifestyle organisaitons; Political parties; Both the Greens and the Liberal Democrats tie with the Environmental Transport Association
4.0 FINANCIAL PARTNERS
4.1 Banks: Introduction; Analysis of partnerships; A number of significant retail banking brands do not currently promote motor insurance; Through a brace of deals with banks, Equity Insurance Brokers entered this sector in 2006; rovision of breakdown recovery insurance by banks has declined
4.2 Building societies: Introduction; Analysis of partnerships; Building society involvement in motor insurance distribution has increased in recent years…; … largely driven by brokers such as Endsleigh, Equity Insurance Brokers and Insure & Go
4.3 Credit cards and premium accounts: Introduction; Analysis of partnerships; A majority of premium accounts offered by banks in the UK include free road assistance.
4.4 Credit unions: Introduction; Analysis of partnerships; Heath Lambert accesses the credit union market as the approved supplier of CUNA Mutual
4.5 Friendly societies: Introduction; Analysis of partnerships; Only a handful of friendly societies offer motor insurance to their customers
4.6 Insurers: Introduction; Analysis of partnerships; Six insurance companies are identifiable as offering white-labelled motor insurance policies; RAC and Green Flag are the assistance providers most commonly used by motor insurers…; … although both Europ Assistance and Inter Partner Assistance have picked up external deals
4.7 On-line aggregators and brokers: Introduction; Analysis of partnerships; BISL / comparethemarket.com and Insurancewide.com are the foremost protagonists…; … although a clutch of other entities are also active as quotation system providers in this sector; Europ Assistance is linked directly to each of MRL Insurance Direct, Quoteline Direct and RIAS
4.8 Specialised lenders: Introduction; Analysis of partnerships; Motor insurance is distributed only four of the specialised lenders surveyed
5.0 COMMERCIAL ENTITIES
5.1 Automotive associations: Introduction; Analysis of partnerships; The partnership between the csma and LV= has been in place for over 80 years…; … and has helped to facilitate the transfer of ownership of Britannia Rescue from csma to LV=
5.2 Automotive dealers, repair shops and supermarkets: Introduction; Analysis of partnerships; Many automotive dealerships owe their survival to revenues derived from financial services…; … and a number of firms in this category have created group-wide insurance distribution deals; The AA and the RAC possess the most group-wide deals albeit Kwik-Fit works with Call Assist
5.3 Automotive manufacturers Introduction: Analysis of partnerships; The vast majority of automotive brands operate approved schemes for motor insurance…; … with a number of important affinity mandates having changed in recent months; Three providers dominate the market for manufacturer-branded road assistance
5.4 Cricket and rugby clubs: Introduction; Analysis of partnerships; Cricket and rugby clubs are completely absent from affinity marketing of motor insurance…; … albeit both cricket and rugby attract sponsors from the financial services sector
5.5 Football clubs: Introduction; Analysis of partnerships; Affinity propositions in motor insurance continue to be limited to a fairly small number of clubs…; … with Endsleigh having emerged as the main protagonist by means of its links with four clubs
5.6 Internet, media and telecoms entities: Introduction; Analysis of partnerships; Insurancewide.com and Moneysupermarket.com account for a majority of media affinities…; … although Confused.com is one of a number of players that is also exploring this arena; For breakdown recovery insurance, Auto Trader retains a traditional affinity link with the RAC
5.7 On-line price comparison providers: Introduction; Analysis of partnerships; A number of on-line price comparison providers offer own-brand insurance searching facilities.
5.8 Retailers: Introduction; Analysis of partnerships; … although both Europ Assistance and Inter Partner Assistan; ce have picked up external deals
4.7 On-line aggregators and brokers: Introduction; Analysis of partnerships; BISL / comparethemarket.com and Insurancewide.com are the foremost protagonists…; … although a clutch of other entities are also active as quotation system providers in this sector; Europ Assistance is linked directly to each of MRL Insurance Direct, Quoteline Direct and RIAS
4.8 Specialised lenders: Introduction; Analysis of partnerships; Motor insurance is distributed only four of the specialised lenders surveyed
5.0 COMMERCIAL ENTITIES
5.1 Automotive associations: Introduction; Analysis of partnerships; The partnership between the csma and LV= has been in place for over 80 years…; … and has helped to facilitate the transfer of ownership of Britannia Rescue from csma to LV=
5.2 Automotive dealers, repair shops and supermarkets: Introduction; Analysis of partnerships; Many automotive dealerships owe their survival to revenues derived from financial services…; … and a number of firms in this category have created group-wide insurance distribution deals; The AA and the RAC possess the most group-wide deals albeit Kwik-Fit works with Call Assist
5.3 Automotive manufacturers: Introduction; Analysis of partnerships; The vast majority of automotive brands operate approved schemes for motor insurance…; … with a number of important affinity mandates having changed in recent months; Three providers dominate the market for manufacturer-branded road assistance
5.4 Cricket and rugby clubs: Introduction; Analysis of partnerships; Cricket and rugby clubs are completely absent from affinity marketing of motor insurance…; … albeit both cricket and rugby attract sponsors from the financial services sector
5.5 Football clubs: Introduction; Analysis of partnerships; Affinity propositions in motor insurance continue to be limited to a fairly small number of clubs…; … with Endsleigh having emerged as the main protagonist by means of its links with four clubs
5.6 Internet, media and telecoms entities: Introduction; Analysis of partnerships; Insurancewide.com and Moneysupermarket.com account for a majority of media affinities…; … although Confused.com is one of a number of players that is also exploring this arena; For breakdown recovery insurance, Auto Trader retains a traditional affinity link with the RAC
5.7 On-line price comparison providers: Introduction; Analysis of partnerships; A number of on-line price comparison providers offer own-brand insurance searching facilities
5.8 Retailers: Introduction; Analysis of partnerships; Many of the UK’s major retailing brands are being leveraged to promote motor insurance…; … with Tesco having acknowledged the changing landscape by launching Tesco Compare; 3 Greenbee will allow the John Lewis Partnership to expand its share of total client expenditure; Fit with the values of the John Lewis Partnership has been key to selection of affinity partners; Several retailers also promote breakdown recovery insurance on a stand-alone basis
5.9 Other commercial entities: Introduction; Branded conglomerates; Saga and Virgin leverage their brands across the full consumer financial services spectrum…; … with Saga having rolled out a price comparison site for motor insurance in August 2007; Loyalty schemes; The loyalty schemes category extends to a range of diverse travel and other reward programs…; … with several offering members the chance points through purchase of motor insurance; AIRMILES reconfigures its affinity strategy by forging a new link with Lloyds TSB; Delivering memorable experiences continues to be key to the AIRMILES proposition; Lloyds TSB hopes to leverage the relationship across a range of financial services; AIRMILES has bolstered its range of family-oriented redemption options…; … and is also in the process of rolling out a policy asserting its ‘green’ credentials; The Post Office; The Post Office is seeking to grow its total portfolio of insurance policies to two million by 2010
6.0 EUROPEAN INNOVATIONS: Introduction; Events in affinity and partnership marketing in Europe, 2006 and 2007; Winter 2006; AEGON expands bancassurance reach in Spain through link with local savings bank; Fondiaria SAI firms up link with Banca Popolare di Milano for bancassurance venture; Elvia reinforces position in travel insurance sector through new distribution deals; Estonian bank diversifies into non-life bancassurance by establishing captive company; AIB and Aviva finalise Irish bancassurance deal by combining life insurance firms; AXA and Adeslas co-operate for health insurance distribution in Spain; Cattolica and Banca Lombarda extend life insurance distribution tie to 2010; French banking and insurance partners pilot Séréna personal assistance platform; Spring 2006; Spanish arm of CIGNA launches health insurance through Travel Club loyalty program; Fortis and An Post confirm Irish financial services joint venture; MACIF and MNRA create affinity programs for small businesses in France; Mapfre and Caja de Madrid extend scope of co-operation to automotive finance; Proteq ties with leading Dutch pharmacy chain for affinity insurance venture; ESFG and Crédit Agricole strengthen Portuguese bancassurance ties; Aon and Delta Lloyd join forces for affinity insurance venture in the Netherlands; Summer 2006; Fondiaria and Capitalia link for non-life bancassurance joint venture in Italy; Mondial Assistance renews international assistance contract with Chrysler Jeep; Cattolica strengthens strategic bancassurance tie with BPVN in Italy; CNP launches new permanent disability and long-term care contract with ASAC-FAPES; BBVA and Sanitas combine in Spanish health insurance distribution deal; AXA seals affinity insurance tie with Bertelsmann media club in Germany; CNP extends major bancassurance deals in France through to end 2015; Winterthur and Sanitas agree tie for health insurance distribution in Switzerland; Europäische expands card-related travel insurance deals in Germany; Autumn 2006; Aon Italia rolls out new propositions for professional affinity partner; Groupama forges joint venture with software house for co-marketing in France and abroad; If P&C plans tie with Finnish retailer’s loyalty program from June 2008 onwards; Allianz Suisse initiates manufacturer-branded insurance co-operation with Volkswagen; Deutsche Postbank secures non-life bancassurance agreement with HUK-Coburg; Groupama forges joint venture with software house for co-marketing in France and abroad; If P&C plans tie with Finnish retailer’s loyalty program from June 2008 onwards; Allianz Suisse initiates manufacturer-branded insurance co-operation with Volkswagen; Deutsche Postbank secures non-life bancassurance agreement with HUK-Coburg
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 ins. in the UK: segmentation by op. model and competitor; Affinity and partnership marketing schemes for breakdown recovery ins. in the UK: pen. by type of partner; Affinity / partner. Mktg. schemes for breakdown recovery ins. in the UK: segment. by op. model and competitor; Charities offering motor insurance: penetration, operating models and partner market shares, 2007; Charities offering breakdown recovery insurance through partnerships, 2007; Ranking of professional associations in the UK by actual or approximate number of members; Ranking of professional associations in the UK by actual or approximate number of members (continued); Professional associations offering motor insurance: penetration, operating models and partner market shares; Professional associations offering breakdown recovery ins.: penetration, op. models and partner market shares; Sports organisations offering motor and breakdown recovery insurance through partnerships; Ranking of the top 50 trade associations in the UK by actual or approximate number of members; Trade associations offering motor insurance: penetration, operating models and partner market shares; Trade associations offering breakdown recovery ins.: penetration, operating models and partner market shares; Ranking of trade unions in the UK by actual or approximate number of members; Trade unions offering motor insurance: penetration, operating models and partner market shares; Trade unions offering breakdown recovery insurance: penetration, operating models and partner market shares; Lifestyle organisations offering motor and breakdown recovery insurance through partnerships; Political parties offering motor and breakdown recovery insurance through partnerships; Banks offering motor insurance: penetration, operating models and partner market shares; Banks offering breakdown recovery insurance through partnerships; Building societies offering motor insurance: penetration, operating models and partner market shares; Building societies offering breakdown recovery insurance through partnerships; Credit cards and premium accounts incorporating breakdown recovery insurance; Credit unions offering motor insurance: penetration, operating models and partner market shares; Friendly societies offering motor insurance and assistance through partnerships; Insurance companies offering motor insurance: penetration, operating models and partner market shares; Motor insurance companies offering breakdown recovery ins.: pen., op. models and partner market shares; On-line aggregators and brokers offering motor ins.: penetration, operating models and partner market shares; On-line aggregators and brokers offering breakdown recovery ins.: pen., op. models and partner market shares; Specialised lenders offering motor insurance: penetration, operating models and partner market shares; Automotive associations offering motor insurance through partnerships; Automotive associations offering breakdown recovery insurance through partnerships; Auto. dealers, repair shops and supermarkets offering motor ins.: pen., op. models and partner market shares; Auto. dealers, repair shops / supermkts. Off. breakdown recovery ins.: pen., op.models and partner mkt. shares; Automotive manufacturers offering motor insurance: penetration, operating models and partner market shares; Automotive manufacturers offering breakdown recovery ins.: pen., op. models and partner market shares; Football clubs offering motor insurance: penetration, operating models and partner market shares; Internet, media and telecoms entities offering motor ins.: penetration, op. models and partner market shares; Internet, media / telecoms entities off. breakdown recovery ins.: pen., op. models and partner market shares; On-line price comparison providers offering motor ins.: penetration, op. models and partner market shares; Retailers offering motor insurance: penetration, operating models and partner market shares; Retailers offering breakdown recovery insurance: penetration, operating models and partner market shares; Branded conglomerates offering motor and breakdown recovery insurance through partnerships; Loyalty schemes offering motor and breakdown recovery insurance through partnerships

Abstract

Finaccord’s report titled Commercial Affinity Groups: Marketing Financial Services through UK Professional and Trade Associations is an updated and expanded market research report investigating the opportunities for marketing banking and insurance services through professional and trade associations in the UK.

The study is based on a survey of 755 UK such associations in 12 separate industry categories, ranging from highly specialised trade bodies to the Federation of Small Businesses, and analyses their current and future intended provision to members of financial services in five broad sectors, namely: business banking services; business insurance; accident and health insurance; life insurance and pensions; and personal general insurance.

Moreover, the PartnerBASE™ database that accompanies the report details each of the schemes for financial services traced by Finaccord identifying the operating models and partners used in each instance. With a significant number of professional and trade associations seeking to add value for their members by organising new schemes for affinity financial services on their behalf before the end of 2008, this channel seems likely to continue to deliver interesting growth prospects for both banking and insurance institutions.

Therefore, the report and database together will provide you with the definitive guide to current and future opportunities for marketing financial services through professional and trade associations in the UK. Key findings from the executive summary include: - while business insurance is most commonly arranged by trade associations, average take-up rates among member companies are highest, at 37.5%, for business banking services with the equivalent percentage reaching 34.1% for commercial insurance services; - ten providers were identified as having at least four exclusive relationships for business insurance with professional and trade associations, namely: Aon, Giles Insurance Brokers, Heath Lambert, Jardine Lloyd Thompson, Layton Blackham, Miles Smith, Towergate, Trafalgar Risk Management (through Parliament Hill), R. K. Harrison and T. H. March; - 140 professional and trade bodies have made an arrangement for providing accident or health insurance to members with professional associations showing the highest rate of penetration at 48.9% of entities in this sector; - 12.1% of small businesses and self-employed individuals belonging to a professional or trade association claim to have made use of a business banking service organised by their association, a percentage that rises to 16.9% in the case of business insurance.

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Affinity and Partnership Marketing in UK Motor and Breakdown Recovery Insurance

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Abstract