Of the 1,473 externally-organised schemes, the majority (819 or 55.6%) were found to have been arranged with a single, external broker with a specific underwriter identifiable in 232 of these cases. Moreover, 394 (or 26.7%) were set up directly with a single underwriter with no broker involvement and the balance of 260 (or 17.7%) were based on other operating models (e.g. use of aggregators, captive brokers or underwriters, multiple external brokers or underwriters). Hence, the results of this research, which Finaccord has updated periodically since 2003, show that brokers still account for the majority of affinity relationships in personal lines.
However, the latest analysis identifies not only the brokers and underwriters of these types of insurance with the most partnerships (overall, and within each category of partner organisation), but for the first time it also measures the likely importance of these partnerships using a proprietary formula devised by Finaccord. This takes account of the characteristics of their partners, especially the effectiveness of each category of partner in distributing each type of insurance and the volumes of UK-based traffic visiting their websites. This formula produces a weighted share of partnerships for each broker and underwriter, in order to highlight the ones that are likely to hold the most valuable relationships for each form of insurance.
This analysis indicates that at the time of publication in January 2013, the leading two providers judged to hold the partnerships offering the most potential value for each of the five products were as follows:
Household: 1st UK Insurance; 2nd Aviva;
Motor: 1st BISL; 2nd UK Insurance;
Pet: 1st RSA; 2nd AXA; ·
Private Medical Insurance: 1st AXA PPP; 2nd Bupa; ·
Travel: 1st theidol.com; 2nd Ageas.
Commented Alan Leach, Director at Finaccord: "While the aforementioned figures underline the fact that brokers hold the most affinity relationships in terms of their outright number, the rankings of the top two providers for each product suggest that major underwriters are generally more successful in securing the most valuable deals. In fact, only two companies are visible here that are not underwriters, namely BISL and theidol.com."
BISL is ranked first for motor insurance as a result of its links with major distributors such as Auto Trader, Bank of Scotland, Barclays, Halifax, HSBC, Lloyds TSB, Marks & Spencer, the Post Office and RAC. Meanwhile, theidol.com (a trading style of Investment Discounts On-Line) came first in travel insurance as a consequence of its provision of the search engine used by aggregators such as Comparethemarket.com, Confused.com, Gocompare.com, Tesco Compare and uSwitch.
Concluded Alan Leach: "While the initial 'gold rush' in affinity and partnership marketing began over a decade ago in the UK and while alternative distribution systems, most notably aggregators, have since brought about enormous changes to the playing field, this continues to be an area of strategic importance for both brokers and underwriters. Naturally, relationships change from time to time as new providers emerge with better propositions for particular types of distributor; for example, Original Insurance Services has been successful in recent years in winning schemes for motor insurance with automotive manufacturer brands. In addition, there is also plenty of scope for brokers to compete for or create niche schemes with small and medium-sized distributors beyond the major brands."
Finaccord is a market research, publishing and consulting company specialising in financial services. It provides its clients with insight into and information about major issues in financial services in the UK, Europe and globally, with a particular focus on marketing and distribution topics such as affinity marketing, bancassurance and strategic alliances. Listed below are seven reports and associated PartnerBASE™ datasets that were published in January 2013, all based on a survey of 2,650 actual and potential partner organisations. Among other categories, these included: automotive clubs; automotive manufacturers; banks; building societies, charities; coalition loyalty schemes and frequent flyer programs; estate agency and property services firms; friendly societies; internet, media and telecoms entities; lifestyle organisations; online aggregators and brokers; professional associations; retailers; trade associations; trade unions; and travel companies.