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Finaccord's report titled Affinity and Partnership Marketing in UK Life Insurance, Retirement Products and Financial Advice represents the most detailed research ever undertaken on this sector. Drawing on the results of a survey of 2,555 organisations, the report analyses the penetration, operating models and provider share of relationships of affinity and partnership marketing schemes for protection-related life insurance, retirement products and financial advice across a range of distributor categories.

These include: banks; building societies; charities; estate agency and property services firms; friendly societies; internet, media and telecoms entities; lifestyle organisations; professional associations; retailers; trade associations; and trade unions. Moreover, the PartnerBASE™ database that accompanies the report provides the granular detail behind the analysis, detailing each of well over 500 affinity and partnership marketing initiatives traced by Finaccord in this sector.

Table Of Contents

Affinity and Partnership Marketing in UK Life Insurance, Retirement Products and Financial Advice
Table of Contents

Executive Summary

Introduction

Market Overview

Non-for-Profit Affinity Partners

Financial Partners

Commercial Partners

List of Graphics / Tables



0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

Background

Rationale

Affinity and partnership marketing remains an important, strategic topic for financial institutions...

... as the ability of affinity and corporate partners to compete effectively has evolved over time

Implementation of the RDR is likely to have had a specific impact on the services covered by this report

Methodology

Organisations investigated

Finaccord's research covers a total of 2,555 actual and potential partner organisations...

... representing virtually all entities that could be significant in this field

Calculation of weighted provider share of partnerships

Finaccord's methodology identifies providers that are likely to hold the most valuable relationships...

... by means of formulae that take into account not only UK traffic rankings for organisations' websites...

... but also distribution shares for each financial product or service by organisation category...

... and the total number of organisations in each category that actually distribute the product

Definitions

Financial products

Term life, critical illness, income protection, over-50s and funeral expenses policies are all in scope…

… as are various products taken out either before or at retirement

Financial advice can also encompass savings and investments plus tax and estate planning

Operating models

PartnerBASE syntax

Finaccord

UK affinity and partnership marketing publications

UK consumer research publications

2.0 MARKET OVERVIEW

Affinities and partnerships in UK life insurance, retirement products and financial advice

Life insurance

Finaccord's research identifies over 300 schemes for life insurance involving an external partner...

... which are divided between 19 distributor categories

Many affinity schemes are organised via hybrid operating models embracing different approaches…

… often as a result of more than one type of life insurance being on offer

Only two organisations are ranked in the top eight for both the weighted and unweighted analysis…

… namely Legal and General (the leading provider in both) and LifeSearch

The relationships of both Legal and General and Aviva Life and Pensions lie mainly in the financial sector

LifeSearch recorded annual turnover of just under GBP 20 million in the most recent financial year

Retirement products

Partner organisations in 13 out of 29 categories have a clearly articulated retirement product proposition

Retirement products are more often organised via an external intermediary than directly with the provider

By outright number of partnerships, Just Retirement and Key Retirement are the leaders

Just Retirement acts as both a direct product source and a provider of advice and comparison services

Origen Financial Solutions lays claim to the partnership that contributes the most in weighted terms

Financial advice

20% or more of organisations in five categories act as providers of financial advice...

... producing a total of over 130 initiatives involving an external IFA or other provider

Financial advice is most often organised in association with a single external IFA

Lighthouse Financial Advice claims the most affinity and corporate partnerships…

… partly (although not only) because of its relationship with Parliament Hill

In the weighted analysis, a single partnership is sufficient to secure the position of the sector leader

Lighthouse Financial Advice secured a brand new relationship with Unite in February 2015

3.0 NOT-FOR-PROFIT AFFINITY PARTNERS

Charities

The websites of Age UK and the RSPB attract particularly high UK-based traffic

Analysis of partnerships

Life insurance is promoted by one in five charities researched

Arthur J Gallagher and Dignity Pre Arrangement are the most visible providers of life insurance to charities

Golden Charter and The Insurance Surgery benefit from ties with three charities…

… and a variety of other providers of life insurance hold one or two partnerships each in this sphere

A number of charities have arrangements for promoting retirement products to their supporters…

... and for some of these the service also extends to the area of general financial advice

Lifestyle organisations

Introduction

The category of lifestyle organisations embraces a diverse range of entities

Analysis of partnerships

St. James's Place Wealth Management works with the captive IFA of one lifestyle association

Professional associations

Introduction

The combined membership of professional associations comes to just under 4 million

Analysis of partnerships

Over a third of professional associations have organised a scheme for life insurance

Parliament Hill runs member benefit schemes on behalf of numerous professional associations...

... making it the dominant provider in this sector by both unweighted and weighted share...

HMCA also holds a significant number of partnerships in this arena...

Nine other providers of life insurance have secured deals with professional associations

Few professional associations have a specific offering in the area of retirement products…

… although over 40 have appointed a preferred provider of financial advice

Apart from Parliament Hill, Lloyd and Whyte has the most ties with professional associations in this arena

Sports organisations

Introduction

This category includes bodies to which individual sports clubs, practitioners and trainers may belong

Analysis of partnerships

Seven sports organisations have established affinity programs for life insurance...

... but none for retirement products and just two for financial advice

Trade associations

Introduction

Finaccord has extended its coverage in this category to over 700 associations

Analysis of partnerships

Over 20 trade associations offer life insurance to the employees of their member companies

In this domain, HMCA is the only provider with more than one distribution partnership...

... with the remainder spread thinly across ten separate entities

Scottish Widows benefits from its relationship with the Federation of Small Businesses

Several trade associations have appointed an accredited provider of financial advice

Trade unions

Introduction

There are over 6 million trade union members in the UK

Analysis of partnerships

A significant number of trade unions include life insurance among offers made to members

Five providers work directly or indirectly with two or more trade unions…

… and more than a dozen others with one trade union each, including Unite Life with Unite

UIB consistently achieves a high level of profitability relative to its annual turnover

For retirement products, Hencilla Canworth acts as provider to both Equity and the Musicians' Union

Over 30 trade unions have organised an accredited provider of financial advice for their members

Lighthouse and Endsleigh are prominent providers in both unweighted and weighted terms...

... in part by virtue of the fact that they are two of only four entities with more than one relationship

Universities

Introduction

The Open University's website attracts more UK traffic than that of any other UK-based university

Analysis of partnerships

A few universities include life insurance as an element of their alumni or current student benefits…

… and for a couple, financial advice is also available

4.0 FINANCIAL PARTNERS

Banks

Introduction

Several challenger banks have emerged to compete with the major incumbents...

... and further structural changes to the market are likely to occur in future years

Analysis of partnerships

Just over one third of banks researched are distributors of life insurance…

… although the number of providers with mandates in this space has shrunk to just seven

Only two banks have any specific proposition in the area of retirement products…

A dozen banks continue to offer financial advice in one form or another…

… occasionally acting as tied agents or working with an external IFA…

… but more normally organising the service internally albeit with the model determined by the RDR

Building societies

Introduction

Mergers and acquisitions have caused the number of extant building society brands to shrink to 49

Analysis of partnerships

Almost two thirds of building societies remain active as distributors of life insurance…

… although only five providers claim more than one building society partnership…

… which is partly due to the strength of Legal and General in this channel

The provision rate for retirement products has retreated to just five out of 49 organisations...

A majority of building societies offer financial advice with three operating models in evidence…

… including tied agency, for which Legal and General is the dominant provider…

… and use of an external IFA, for which Towergate Financial holds most partnerships

Credit unions

Introduction

Total membership across around 360 credit unions in the UK now exceeds 1.17 million…

... with all key credit union metrics having grown strongly in recent years…

... apart from the actual number of credit unions given that there were over 500 in 2007

Few credit union websites attract a significant volume of UK-based visitors

Analysis of partnerships

Sterling Life is taking over from CUNA Mutual as provider of life savings insurance to credit union members

Friendly societies

Introduction

Finaccord's research covers 25 of the larger friendly societies in the UK...

... among which Liverpool Victoria (LV=) is by far the largest

Analysis of partnerships

Selling protection-related life insurance is a core activity for the vast majority of friendly societies...

... although only two are involved in the field of retirement products

Two friendly societies offer financial advice, both by means of a captive IFA 97 Insurers (tied / multi-tied intermediaries)

Introduction

Over 50 branded intermediaries effectively act as tied or multi-tied agents for insurance products…

… meaning that they also constitute a partnership marketing opportunity

Analysis of partnerships

Five types of operating model are in evidence for life cover sold through entities in this category

Alpha Insurance holds the most partnerships with distributors in this category…

… but Scottish Friendly emerges most favourably from the weighted analysis

Insurers (underwriters)

Introduction

Over 80 insurance underwriting brands can be broken down into three main sub-categories

Sometimes, insurance underwriting brands distribute the policies of other underwriters or brokers

Analysis of partnerships

20 out of 41 insurance underwriting brands work with a non-internal provider of life policies…

… often filling in ‘product gaps' where they do not underwrite a policy type themselves

Cigna, Legal and General and Vitality Life lead in this field by weighted share of partnerships

Just Retirement holds two partnerships for retirement products with insurance underwriting brands

Wealth at Work claims the deal for financial advice delivering the highest weighted share of partnerships…

… and is a company that has recorded rapid growth in turnover in recent years

Online aggregators and brokers

Introduction

The market for online aggregation and broking has become more concentrated in recent years...

... as a result of a number of factors including the challenge thrown up by cashback websites

Analysis of partnerships

Some entities in this category have their own search engine but many outsource to external providers

ActiveQuote is used for income protection insurance comparisons by two major aggregators…

… although they use other providers for mainstream life insurance policies

Five providers have three partnerships each in this category but they are rarely exclusive ones

Six major online intermediaries have devised a system for promoting retirement products...

... although just five are active in the provision of general financial advice

Specialised lenders

Introduction

The category of specialised lenders includes a variety of different types of institution...

... with many new competitors having emerged in the wake of the 'credit crunch'

Analysis of partnerships

A single initiative for life insurance is visible in this partner category

5.0 COMMERCIAL PARTNERS

Automotive associations

Introduction

In addition to the AA and RAC, nine other organisations fall within this partner category

Analysis of partnerships

Three automotive associations distribute life insurance, all by means of a different operating model

The CSMA Club maintains a partnership with Lighthouse Financial Advice

Coalition loyalty schemes and frequent flyer programs

Introduction

Among qualifying entities, Nectar's website attracts the most UK-based online traffic

Analysis of partnerships

Two loyalty schemes allow members to earn 'currency' by purchasing life insurance

Estate agency and property service firms

Introduction

This category includes prominent online estate agency and property portals as well as traditional chains

Analysis of partnerships

Almost three quarters of organisations in this category have an arrangement for promoting life insurance...

Legal and General and Mortgage Advice Bureau are the category leaders on an unweighted basis...

... in a fragmented field in which there are at least 40 competing providers in total

Mortgage Advice Bureau grew its turnover by almost 50% in the most recent financial year

The high traffic attracted to the website of Zoopla is of benefit to lovemoney.com in the weighted analysis

Many fewer estate agency and property service firms have a specific arrangement for retirement products

13 firms have an arrangement in place for offering general financial advice...

... although only one provider has a relationship with more than one of them

Private Finance and SPF Private Clients are most prominent in the weighted analysis

Internet, media and telecoms entities

Introduction

This category embraces many organisations with extremely high UK website rankings...

... which can have a substantial impact on the analysis of weighted partnership shares

Analysis of partnerships

Entities in this category are displaying less interest in acting as distributors of life insurance

In weighted terms, London and Country holds the partnership that apparently offers most potential

Most initiatives for retirement products have been set up with one or more independent financial advisers

Just Retirement and Key Retirement both have two partnerships each in this distribution category…

… while Skipton Financial Services is used by two for general financial advice

Retailers

Introduction

The research focuses on 80 of the retailer brands with most potential to offer insurance products

Analysis of partnerships

Eight major retailing brands are used for selling forms of protection-related life insurance?

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

The affinity and partnership marketing universe

Organisations investigated, segmented by broad category

2.0 MARKET OVERVIEW

Affinity and partnership marketing schemes for life insurance in the UK: provision rate by category of partner

Affinity and partnership marketing schemes for life insurance in the UK: operating models

Affinity and partnership marketing schemes for life insurance in the UK: unweighted and weighted provider share of partnerships

Affinity and partnership marketing schemes for retirement products in the UK: provision rate by category of partner

Affinity and partnership marketing schemes for retirement products in the UK: operating models

Affinity and partnership marketing schemes for at-retirement products in the UK: unweighted and weighted provider share of partnerships

Affinity and partnership marketing schemes for financial advice in the UK: provision rate by category of partner

Affinity and partnership marketing schemes for financial advice in the UK: operating models

Affinity and partnership marketing schemes for financial advice in the UK: unweighted and weighted provider share of partnerships

3.0 NOT-FOR-PROFIT AFFINITY PARTNERS

Charities offering life insurance: provision rates and operating models

Charities offering life insurance: unweighted and weighted provider share of partnerships

Charities offering retirement products: provision rates and operating models

Charities offering retirement products: unweighted and weighted provider share of partnerships

Charities offering financial advice: provision rates and operating models

Charities offering financial advice: unweighted and weighted provider share of partnerships

Lifestyle organisations offering retirement products and financial advice: provision rates and operating models

Top 40 professional associations in the UK ranked by member numbers, 2015 (table)

Professional associations offering life insurance: provision rates and operating models

Professional associations offering life insurance: unweighted and weighted provider share of partnerships

Professional associations offering retirement products: provision rates and operating models

Professional associations offering retirement products: unweighted and weighted provider share of partnerships

Professional associations offering financial advice: provision rates and operating models

Professional associations offering financial advice: unweighted and weighted provider share of partnerships

Sports organisations offering life insurance: provision rates and operating models

Sports organisations offering life insurance: unweighted and weighted provider share of partnerships

Sports organisations offering financial advice: provision rates and operating models

Top 80 trade associations in the UK ranked by member numbers, 2015 (table)

Top 80 trade associations in the UK ranked by member numbers, 2015 (table) (continued)

Trade associations offering life insurance: provision rates and operating models

Trade associations offering life insurance: unweighted and weighted provider share of partnerships

Trade associations offering retirement products: provision rates and operating models

Trade associations offering retirement products: unweighted and weighted provider share of partnerships

Trade associations offering financial advice: provision rates and operating models

Trade associations offering financial advice: unweighted and weighted provider share of partnerships

Top 40 trade unions in the UK ranked by member numbers, 2015 (table)

Trade unions offering life insurance: provision rates and operating models

Trade unions offering life insurance: unweighted and weighted provider share of partnerships

Trade unions offering retirement products: provision rates and operating models

Trade unions offering retirement products: unweighted and weighted provider share of partnerships

Trade unions offering financial advice: provision rates and operating models

Trade unions offering financial advice: unweighted and weighted provider share of partnerships

Universities offering life insurance: provision rates and operating models

Universities offering life insurance: unweighted and weighted provider share of partnerships

Universities offering financial advice: provision rates and operating models

Universities offering life insurance: unweighted and weighted provider share of partnerships

4.0 FINANCIAL PARTNERS

Banks offering life insurance: provision rates and operating models

Banks offering life insurance: unweighted and weighted provider share of partnerships

Banks offering retirement products: provision rates and operating models

Banks offering financial advice: provision rates and operating models

Banks offering financial advice: unweighted and weighted provider share of partnerships

Building societies offering life insurance: provision rates and operating models

Building societies offering life insurance: unweighted and weighted provider share of partnerships

Building societies offering retirement products: provision rates and operating models

Building societies offering retirement products: unweighted and weighted provider share of partnerships

Building societies offering financial advice: provision rates and operating models

Building societies offering financial advice: unweighted and weighted provider share of partnerships

Credit unions offering life insurance: provision rates and operating models

Friendly societies offering life insurance: provision rates and operating models

Friendly societies offering retirement products: provision rates and operating models

Friendly societies offering financial advice: provision rates and operating models

Friendly societies offering financial advice: unweighted and weighted provider share of partnerships

Insurers (tied / multi-tied intermediaries) offering life insurance: provision rates and operating models

Insurers (tied / multi-tied intermediaries) offering life insurance: unweighted and weighted provider share of partnerships

Insurers (underwriters) offering life insurance: provision rates and operating models

Insurers (underwriters) offering life insurance: unweighted and weighted provider share of partnerships

Insurers (underwriters) offering retirement products: provision rates and operating models

Insurers (underwriters) offering retirement products: unweighted and weighted provider share of partnerships

Insurers (underwriters) offering financial advice: provision rates and operating models

Insurers (underwriters) offering financial advice: unweighted and weighted provider share of partnerships

Online aggregators and brokers offering life insurance: provision rates and operating models

Online aggregators and brokers offering life insurance: unweighted and weighted provider share of partnerships

Online aggregators and brokers offering retirement products: provision rates and operating models

Online aggregators and brokers offering retirement products: unweighted and weighted provider share of partnerships

Online aggregators and brokers offering financial advice: provision rates and operating models

Specialised lenders offering life insurance: provision rates and operating models

5.0 COMMERCIAL PARTNERS

Automotive associations offering life insurance: provision rates and operating models

Automotive associations offering life insurance: unweighted and weighted provider share of partnerships

Automotive associations offering retirement products and financial advice: provision rates and operating models

Coalition loyalty schemes and frequent flyer programs offering life insurance: provision rates and operating models

Coalition loyalty schemes and frequent flyer programs offering life insurance: unweighted and weighted provider share of partnerships

Estate agency and property service firms offering life insurance: provision rates and operating models

Estate agency and property service firms offering life insurance: unweighted and weighted provider share of partnerships

Estate agency and property service firms offering retirement products: provision rates and operating models

Estate agency and property service firms offering retirement products: unweighted and weighted provider share of partnerships

Estate agency and property service firms offering financial advice: provision rates and operating models

Estate agency and property service firms offering financial advice: unweighted and weighted provider share of partnerships

Internet, media and telecoms entities offering life insurance: provision rates and operating models

Internet, media and telecoms entities offering life insurance: unweighted and weighted provider share of partnerships

Internet, media and telecoms entities offering retirement products: provision rates and operating models

Internet, media and telecoms entities offering retirement products: unweighted and weighted provider share of partnerships

Internet, media and telecoms entities offering financial advice: provision rates and operating models

Internet, media and telecoms entities offering financial advice: unweighted and weighted provider share of partnerships

Retailers offering life insurance: provision rates and operating models

Retailers offering life insurance: unweighted and weighted provider share of partnerships

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