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Finaccord's report titled Affinity and Partnership Marketing in UK Motor and Breakdown Recovery Insurance 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 motor and breakdown recovery insurance across a range of distributor categories.

These include: automotive manufacturers; banks; building societies; charities; friendly societies; internet, media and telecoms entities; online aggregators and brokers; 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 Motor and Breakdown Recovery Insurance
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

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

Operating models

PartnerBASE syntax

Finaccord

UK affinity and partnership marketing publications

UK consumer research publications

2.0 MARKET OVERVIEW

Affinities and partnerships in UK motor and breakdown recovery insurance

Motor insurance

Finaccord's research identifies 260 schemes for motor insurance involving external partners...

... which are divided between 23 distributor categories

Most affinity schemes are organised via an external intermediary, not directly with an underwriter

Three organisations are ranked in the top eight for both the weighted and unweighted analysis

In the unweighted analysis, the leading provider secures its position through

partnerships

BISL is the market leader in the weighted analysis by virtue of its deals with large organisations...

... helping it to pre-tax profit in excess of GBP 100 million in the 12 months to the end of June 2014

Breakdown recovery insurance

The number of affinity schemes for breakdown cover is not far behind that for motor insurance

Provision rates reach at least one third of organisations researched in six out of 22 distributor categories

Over a half of relationships have been set up directly with a single, external assistance company

In terms of number of partnerships, the leading seven providers are quite closely bunched…

... although the AA and the RAC pull ahead in the weighted analysis

3.0 NOT-FOR-PROFIT AFFINITY PARTNERS

Charities

Introduction

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

Analysis of partnerships

Motor insurance is promoted by close to a third of the 110 charities researched

Arthur J Gallagher provides motor insurance to a number of medical charities

Five other providers hold more than one charity partnership in this field…

… and one relationship each can be attributed to another five

By weighted share of partnerships, Ageas emerges as the sector leader followed by Arthur J Gallagher

A lower percentage of charities promotes breakdown recovery insurance on a stand-alone basis…

… with a variety of different providers in evidence, sometimes working in unison with each other

Lifestyle organisations

Introduction

The category of lifestyle organisations embraces a diverse range of entities

Analysis of partnerships

Schemes set up by lifestyle organisations split evenly between external underwriters and brokers

Vantage Insurance Services runs the program contributing the highest weighted share

Four lifestyle organisations have established schemes for breakdown recovery insurance…

… including the Camping and Caravanning Club

Professional associations

Introduction

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

Analysis of partnerships

Over a quarter of professional associations have organised a scheme for motor insurance

Parliament Hill runs member benefit schemes on behalf of close to 30 professional associations...

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

Other distribution deals with professional associations are spread across five different competitors

The provision rate for breakdown recovery insurance is somewhat higher than for motor insurance

For breakdown recovery insurance, Parliament Hill utilises First Call as provider…

… while competitor HMCA employs Autohome Assistance and DAS in this context

The AA has one major relationship in this distribution category

Sports organisations

Introduction

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

Analysis of partnerships

Few sports organisations have established affinity programs for motor insurance...

... although the rate of provision is slightly higher for breakdown recovery insurance

Trade associations

Introduction

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

Analysis of partnerships

18 trade associations offer personal motor insurance to the employees of their member companies...

... although only two providers possess more than one relationship in this domain

By weighted share of partnerships, Towergate emerges as the dominant provider

More trade associations intermediate breakdown recovery insurance than do personal motor insurance

HMCA (working with Autohome Assistance and DAS) claims the highest number of partnerships…

… followed by the AA and the RAC

HMCA has grown its annual turnover by over 15% since 2010

Trade unions

Introduction

There are over 6 million trade union members in the UK

Analysis of partnerships

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

Aviva is especially strong among trade unions originating from the education sector

Alan Boswell Insurance Brokers has gained one major trade union partnership

Stand-alone breakdown cover is available from a fairly significant number of trade unions

Two providers each hold four relationships although one of these has a much higher weighted share

The AA and the RAC have one deal each but these are likely to be fairly significant ones

Universities

Introduction

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

Analysis of partnerships

Schemes for selling motor insurance to current or former students are thin on the ground…

... which is also the case for breakdown recovery insurance

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

Banks are most likely to utilise a single, external underwriter or broker as a provider of motor insurance

Five providers hold two or more distribution deals with retail banking brands...

... although the mandates of BISL and iGO4 Partners endow them with the highest weighted shares

Building societies

Introduction

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

Analysis of partnerships

Only a minority of building societies have an arrangement for selling motor insurance...

... although these include the Nationwide, which provides LV= with a huge weighted partnership share

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

Just one out of 35 of the larger credit unions distributes motor and breakdown recovery insurance

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

Two friendly societies promote motor insurance, one of which uses an external partner for this purpose…

... a situation that is replicated in the case of breakdown recovery insurance

Insurers (tied / multi-tied intermediaries)

Introduction

Over 60 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

A dozen entities in this sub-category distribute motor insurance, all but one using external providers

Covea, Catlin and Great Lakes Reinsurance (UK) are most prominent in the weighted analysis…

… but only marginally so

At least 13 out of 16 entities selling breakdown cover do so through a single, external underwriter…

… with the link of AXA Assistance with Warranty Direct proving critical in the weighted analysis 86 Insurers (underwriters)

Introduction

Over 80 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

Eight out of 34 insurance underwriting brands that sell motor policies do not underwrite cover themselves

Great Lakes Reinsurance (UK) benefits from its partnerships with four online underwriting brands

Most underwriters of motor insurance work with an external or captive provider of breakdown cover...

... of which there are at least ten competing for contracts...

... with the AA and the RAC claiming the highest weighted partnership shares

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

Most entities in this category have their own search engine but some outsource to external providers

11 providers hold relationships in this category with the most attributable to Ageas and Seopa…

… although not all partnerships are exclusives ones…

… and a captive underwriter claims the highest weighted share of partnerships

Ten entities in this category work with an external underwriter or broker for breakdown cover...

... with the firm used by two major aggregators holding by far the highest weighted share of partnerships

Packaged accounts

Introduction

The number of customers with a packaged account grew rapidly following their introduction

Regulatory intervention clouded the outlook for a time…

… although the FCA's most recent pronouncements seem relatively mild

Analysis of partnerships

Over 70% of packaged accounts incorporate bundled breakdown recovery insurance...

... with four providers active as partners of banks in this context

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

Initiatives in this category are limited to one major partner organisation

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

Most automotive associations utilise a broker model for distributing motor insurance…

... although one has a direct underwriter tie

All but one automotive association act as providers of breakdown recovery insurance…

… and all other than the AA and the RAC utilise external partners for this purpose

Automotive manufacturers

Introduction

Among automotive manufacturers, four German brands attract the most UK-based traffic to their websites

Analysis of partnerships

35 out of 47 automotive manufacturer brands have arranged a scheme for motor insurance

Allianz is a dominant provider in the UK market for manufacturer-branded motor insurance...

… as are Aviva and brokers iGO4 Partners, Lloyd Latchford and Original Insurance Services

Only seven out of 47 manufacturer brands have no arrangement for breakdown recovery insurance

Three providers of breakdown cover are almost entirely dominant by share of partnerships

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 motor insurance…

… with a similar finding applying in the case of breakdown recovery 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

Zoopla intermediates motor policies as a peripheral element of its proposition

Football and rugby clubs

Introduction

The research investigates a total of 76 professional football and rugby clubs

Analysis of partnerships

Comparatively few football or rugby clubs act as affinity partners for motor insurance

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

All initiatives in this category bar one are run via external aggregators or brokers

Confused.com, lovemoney.com and Seopa hold the most partnerships in this category…

… but Google Compare dominates the weighted analysis

Three providers have concluded deals for breakdown recovery insurance in this category

Online price comparison providers

Introduction

Several online price comparison providers offer insurance or financial services product comparisons

Analysis of partnerships

The presence of online price comparison providers has diminished substantially in recent years…

… and it is also limited in breakdown recovery insurance

Retailers

Introduction

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

Analysis of partnerships

Most schemes are run with just one external provider although two retail brands utilise hybrid models

Hastings Direct and Ageas are respectively first and second in the weighted analysis of partnerships

The gross premiums written of Tesco Underwriting fell by almost one third between 2011 and 2013

Six retail brands offer breakdown recovery insurance on a stand-alone basis

Travel companies

Introduction

The fragmented travel sector hosts a variety of different types of company

Analysis of partnerships

Breakdown recovery insurance is on offer from a handful of travel firms, where a logic exists for it…

… with each utilising a different provider in this context

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 motor insurance in the UK: provision rate by category of partner

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

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

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

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

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

3.0 NOT-FOR-PROFIT AFFINITY PARTNERS

Charities offering motor insurance: provision rates and operating models

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

Charities offering breakdown recovery insurance: provision rates and operating models

Charities offering breakdown recovery insurance: unweighted and weighted provider share of partnerships

Lifestyle organisations offering motor insurance: provision rates and operating models

Lifestyle organisations offering motor insurance: unweighted and weighted provider share of partnerships

Lifestyle organisations offering breakdown recovery insurance: provision rates and operating models

Lifestyle organisations offering breakdown recovery insurance: unweighted and weighted provider share of partnerships

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

Professional associations offering motor insurance: provision rates and operating models

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

Professional associations offering breakdown recovery insurance: provision rates and operating models

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

Sports organisations offering motor insurance: provision rates and operating models

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

Sports organisations offering breakdown recovery insurance: provision rates and operating models

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

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 motor insurance: provision rates and operating models

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

Trade associations offering breakdown recovery insurance: provision rates and operating models

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

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

Trade unions offering motor insurance: provision rates and operating models

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

Trade unions offering breakdown recovery insurance: provision rates and operating models

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

Universities offering motor insurance: provision rates and operating models

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

Universities offering breakdown recovery insurance: provision rates and operating models

Universities offering breakdown recovery insurance: unweighted and weighted provider share of partnerships

4.0 FINANCIAL PARTNERS

Banks offering motor insurance: provision rates and operating models

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

Building societies offering motor insurance: provision rates and operating models

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

Credit unions offering motor and breakdown recovery insurance: provision rates and operating models

Friendly societies offering motor insurance: provision rates and operating models

Friendly societies offering breakdown recovery insurance: provision rates and operating models

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

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

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

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

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

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

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

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

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

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

Online aggregators and brokers offering breakdown recovery insurance: provision rates and operating models

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

Packaged accounts offering breakdown recovery insurance: provision rates and operating models

Packaged accounts offering breakdown recovery insurance: unweighted and weighted provider share of partnerships

Specialised lenders offering motor insurance: provision rates and operating models

Specialised lenders offering breakdown recovery insurance: provision rates and operating models

5.0 COMMERCIAL PARTNERS

Automotive associations offering motor insurance: provision rates and operating models

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

Automotive associations offering breakdown recovery insurance: provision rates and operating models

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

Automotive manufacturers offering motor insurance: provision rates and operating models

Automotive manufacturers offering motor insurance: unweighted and weighted provider share of partnerships

Automotive manufacturers offering breakdown recovery insurance: provision rates and operating models

Automotive manufacturers offering breakdown recovery insurance: unweighted and weighted provider share of partnerships

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

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

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

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

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

Football and rugby clubs offering motor insurance: provision rates and operating models

Football and rugby clubs offering motor insurance: unweighted and weighted provider share of partnerships

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

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

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

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

Online price comparison providers offering motor insurance: provision rates and operating models

Online price comparison providers offering motor insurance: unweighted and weighted provider share of partnerships

Online price comparison providers offering breakdown recovery insurance: provision rates and operating models

Retailers offering motor insurance: provision rates and operating models

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

Retailers offering breakdown recovery insurance: provision rates and operating models

Retailers offering breakdown recovery insurance: unweighted and weighted provider share of partnerships

Travel companies offering breakdown recovery insurance: provision rates and operating models

Travel companies offering breakdown recovery insurance: unweighted and weighted provider share of partnerships

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