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Affinity and Partnership Marketing in UK Household and Home Emergency Insurance
Finaccord, January 2013, Pages: 133
Finaccord's report titled Affinity and Partnership Marketing in UK Household and Home Emergency Insurance represents the most detailed research ever undertaken on this sector and is one of seven studies in the latest series of publications. Drawing on the results of a survey of 2,650 organisations, the report analyses the penetration, operating models and provider share of relationships of affinity and partnership marketing schemes for household and home emergency insurance 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; online aggregators and brokers; professional associations; retailers; and trade unions. Moreover, the PartnerBASE™ database that accompanies the report provides the granular detail behind the analysis, detailing each of more than 450 affinity and partnership marketing initiatives traced by Finaccord in this sector.
In addition, the latest analysis identifies not only the providers of household and home emergency insurance with the most partnerships (overall, and within each category) but, for the first time and using a proprietary formula devised by Finaccord, also computes 'weighted provider shares of partnerships' in order to highlight the providers that are likely to hold the most valuable relationships given the characteristics of their partners.
You may be able to use this report and associated PartnerBASE™ database in one or more of the following ways:
- drill down into the detail lying behind affinity and partnership marketing schemes for household and home emergency insurance;
- gain access to research that chronicles the vast majority of affinity and partnership marketing opportunities in these two areas;
- understand not only which providers have secured the most partnerships but which are likely to hold the most valuable deals for each of household and home emergency insurance;
- benchmark the competitive position of your own organisation in affinity and partnership marketing and spot opportunities for displacing rivals;
- plan your future affinity and partnership marketing strategy in household and home emergency insurance armed with the best market and competitor intelligence available on this subject.
Together, the report and PartnerBASE™ database will provide you with the definitive guide to current and potential affinity and partnership marketing opportunities in UK household and home emergency insurance.
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 2,650 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 sub-category...
... and the total number of organisations in each sub-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 household and home emergency insurance
Household insurance
Finaccord’s research identified 365 schemes for household insurance involving an external partner...
... which are divided between 24 distributor categories
Most affinity schemes are organised via an external intermediary, not directly with an underwriter
Five 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 40 partnerships
In weighted terms, UK Insurance and BDML Connect are, respectively, the leading underwriter and broker
BDML Connect has experienced steady growth in revenues and profitability in recent years
Home emergency insurance
The provision rate of home emergency cover is much lower than that for household insurance...
... with utilities companies the most likely to offer it followed by insurance and other major brands
Almost three quarters of relationships have been set up directly with a single, external assistance company
HomeServe is the market leader whether measured by unweighted or weighted share of partnerships...
... although its lead over British Gas is smaller in weighted terms
Key new deals and renewals, Q2 2010 to Q3 2012
3.0 NOT-FOR-PROFIT AFFINITY PARTNERS
Charities
Introduction
The websites of the National Trust and Great Ormond Street Hospital attract the most UK traffic
Analysis of partnerships
Household insurance is promoted by a reasonably significant number of charities
Gallagher Heath provides household insurance to a number of medical charities
As a consequence of three partnerships, RSA is the sector leader in weighted terms
Just one charity promotes home emergency insurance on a stand-alone basis
Lifestyle organisations
Introduction
The category of lifestyle organisations embraces a diverse range of entities
Analysis of partnerships
Most schemes set up by lifestyle organisations are run through a single, external broker
CETA Insurance runs the program contributing the highest weighted share
Professional associations
Introduction
The combined membership of professional associations comes to just under 4 million
Analysis of partnerships
Well over a third of professional associations have organised a scheme for household insurance
Parliament Hill runs member benefit schemes on behalf of over 30 professional associations...
... making it the dominant provider in this sector by both unweighted and weighted share...
... albeit Hiscox is more prominent as a serious rival for this product in weighted terms
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 household insurance
Trade associations
Introduction
Finaccord has extended its coverage in this category to a total of 700 associations
Analysis of partnerships
45 trade associations offer household insurance to the employees of their member companies...
... although only six providers possess two or more relationships in this domain
By weighted share of partnerships, Towergate emerges as the leading provider
Trade unions
Introduction
There are around 6.4 million trade union members in the UK
Analysis of partnerships
A significant number of trade unions include household insurance among offers made to members
By both unweighted and weighted share of partnerships, UIA is the leading provider in this field...
... as a consequence of its deals with eight trade unions, including the UK's two largest
UIA has achieved modest growth in gross premiums written in recent years
In this category, the three partners of LV= outgun the seven of Aviva in weighted terms
Universities
Introduction
The Open University's website attracts more UK traffic than that of any other UK-based university
Analysis of partnerships
Two providers dominate the market for student contents insurance distributed through universities
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
For household insurance, banks utilise a variety of operating models
Eight companies hold two or more distribution deals with retail banking brands
The unweighted and weighted analysis of partnerships produce very different results
Only three banks intermediate home emergency insurance on a stand-alone basis
Building societies
Introduction
Mergers and acquisitions have caused the number of extant building society brands to shrink to 54
Analysis of partnerships
Over three quarters of building societies remain active as distributors of household insurance
The tie of UK Insurance with the Nationwide dominates the analysis of weighted partnership shares
Only one building society has introduced a stand-alone home emergency insurance policy
Credit unions
Introduction
Total membership across around 400 credit unions in the UK now exceeds 1 million...
... with this figure having risen by 170% since 2007
The websites of two London-based credit unions pull in the most online visitors from the UK
Analysis of partnerships
Several of the larger credit unions adhere to a scheme for distributing household insurance...
... with three providers found to be active in this partner category
Friendly societies
Introduction
Finaccord's research covers 25 of the larger friendly societies in the UK...
... among which Liverpool Victoria is by far the largest
Analysis of partnerships
Three friendly societies distribute household insurance, two by means of an external partner
For home emergency insurance, the picture is even more straightforward
Insurers
Introduction
Over 70 insurance underwriting brands can be broken down into four main sub-categories
Analysis of partnerships
16 out of 39 insurance brands that are used to sell household policies do not underwrite cover themselves
BDML Connect benefits from its partnerships with two major online insurance brands
Most household insurance underwriters work with an external provider of home emergency cover...
... of which there are at least eight competing for contracts...
... with HomeServe and DAS Legal Expenses Insurance 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
BeatThatQuote.com and Hastings Insurance Services appear to hold the most worthwhile partnerships
Few entities in this category intermediate stand-alone home emergency insurance policies
Packaged accounts
Introduction
The number of customers with a packaged account has grown rapidly in recent years...
... although possible regulatory intervention clouds the future outlook
Analysis of partnerships
A handful of packaged accounts incorporate bundled home emergency insurance
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 quartet of initiatives for household insurance are visible in this partner category
5.0 COMMERCIAL PARTNERS
Automotive associations
Introduction
In addition to the AA and RAC, six other organisations fall within this partner category
Analysis of partnerships
In four out of six cases, automotive associations selling household cover do so through external brokers...
... although the CSMA Club continues to work with LV= as part of a long-standing relationship
The AA entered the market for home emergency insurance in October 2010
Automotive manufacturers
Introduction
Among automotive manufacturers, four German brands attract the most UK-based traffic to their websites
Analysis of partnerships
Only BMW distributes branded household insurance policies
Coalition loyalty schemes and frequent flyer programs
Introduction
The websites of four loyalty schemes are ranked in the top 5,000 by number of UK visitors
Analysis of partnerships
Three loyalty schemes allow members to earn 'currency' by purchasing household insurance
Members of Nectar can buy stand-alone home emergency cover from British Gas
Consumer product manufacturers
Introduction
Some manufacturers of consumer products can act as affinity partners for selected financial products
Analysis of partnerships
Gas boiler cover is available through six manufacturer brands
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 two thirds of organisations in this category have an arrangement for promoting household cover...
Mortgage Advice Bureau is the category leader on an unweighted basis...
... although it is overtaken by seven other providers in terms of weighted partnership shares
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 household 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
Most initiatives in this category are run via external aggregators or brokers
In weighted terms, lovemoney.com and Moneysupermarket.com hold partnerships with strong potential
Online price comparison providers
Introduction
PriceRunner and mySupermarket.co.uk run the websites attracting the most UK-based visitors
Analysis of partnerships
The presence of online price comparison providers has diminished substantially in recent years
Retailers
Introduction
Among retail brands, Amazon's website attracts the most UK traffic, followed by those of Tesco and Argos
Analysis of partnerships
11 major retailing brands continue to be used to sell household insurance
Tesco Compare has had difficulty in achieving either scale or profitability in the aggregation market
Home emergency cover is available as a stand-alone product from just one retail brand
Utilities companies
Introduction
Utilities firms have enjoyed considerable success as distributors of home emergency insurance
Analysis of partnerships
Well over a half of firms in this category act as distributors of home emergency insurance...
... with eight providers active as external or captive partners of utilities companies in this context...
... and with British Gas and HomeServe dominant in the analysis of weighted partnerships
The Post office and other major brands
Introduction
Several major organisations are considered separately as they do not fit easily in the other categories
Among these, the website of the Post Office pulls in the most UK visitors, followed by that of Saga
Analysis of partnerships
Three of the five organisations covered are significant distributors of household 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 household insurance in the UK: provision rate by category of partner
Affinity and partnership marketing schemes for household insurance in the UK: operating models
Affinity and partnership marketing schemes for household insurance in the UK: unweighted and weighted provider share of partnerships
Affinity and partnership marketing schemes for home emergency insurance in the UK: provision rate by category of partner
Affinity and partnership marketing schemes for home emergency insurance in the UK: operating models
Affinity and partnership marketing schemes for home emergency insurance in the UK: unweighted and weighted provider share of partnerships
3.0 NOT-FOR-PROFIT AFFINITY PARTNERS
Charities offering household insurance: provision rates and operating models
Charities offering household insurance: unweighted and weighted provider share of partnerships
Charities offering home emergency insurance: provision rates and operating models
Lifestyle organisations offering household insurance: provision rates and operating models
Lifestyle organisations offering household insurance: unweighted and weighted provider share of partnerships
Top 40 professional associations in the UK ranked by member numbers, 2012 (table)
Professional associations offering household insurance: provision rates and operating models
Professional associations offering household insurance: unweighted and weighted provider share of partnerships
Sports organisations offering household insurance: provision rates and operating models
Sports organisations offering household insurance: unweighted and weighted provider share of partnerships
Top 80 trade associations in the UK ranked by member numbers, 2012 (table)
Top 80 trade associations in the UK ranked by member numbers, 2012 (table) (continued)
Trade associations offering household insurance: provision rates and operating models
Trade associations offering household insurance: unweighted and weighted provider share of partnerships
Top 40 trade unions in the UK ranked by member numbers, 2012 (table)
Trade unions offering household insurance: provision rates and operating models
Trade unions offering household insurance: unweighted and weighted provider share of partnerships
Universities offering household insurance: provision rates and operating models
Universities offering household insurance: unweighted and weighted provider share of partnerships
4.0 FINANCIAL PARTNERS
Banks offering household insurance: provision rates and operating models
Banks offering household insurance: unweighted and weighted provider share of partnerships
Banks offering home emergency insurance: provision rates and operating models
Building societies offering household insurance: provision rates and operating models
Building societies offering household insurance: unweighted and weighted provider share of partnerships
Building societies offering home emergency insurance: provision rates and operating models
Credit unions offering household insurance: provision rates and operating models
Credit unions offering household insurance: unweighted and weighted provider share of partnerships
Friendly societies offering household insurance: provision rates and operating models
Friendly societies offering household insurance: unweighted and weighted provider share of partnerships
Friendly societies offering home emergency insurance: provision rates and operating models
Insurers offering household insurance: provision rates and operating models
Insurers offering household insurance: unweighted and weighted provider share of partnerships
Insurers offering home emergency insurance: provision rates and operating models
Insurers offering home emergency insurance: unweighted and weighted provider share of partnerships
Online aggregators and brokers offering household insurance: provision rates and operating models
Online aggregators and brokers offering household insurance: unweighted and weighted provider share of partnerships
Online aggregators and brokers offering home emergency insurance: provision rates and operating models
Online aggregators and brokers offering home emergency insurance: unweighted and weighted provider share of partnerships
Packaged accounts offering home emergency insurance: provision rates and operating models
Packaged accounts offering home emergency insurance: unweighted and weighted provider share of partnerships
Specialised lenders offering household insurance: provision rates and operating models
Specialised lenders offering household insurance: unweighted and weighted provider share of partnerships
5.0 COMMERCIAL PARTNERS
Automotive associations offering household insurance: provision rates and operating models
Automotive associations offering household insurance: unweighted and weighted provider share of partnerships
Automotive associations offering home emergency insurance: provision rates and operating models
Automotive manufacturers offering household insurance: provision rates and operating models
Coalition loyalty schemes and frequent flyer programs offering household insurance: provision rates and operating models
Coalition loyalty schemes and frequent flyer programs offering household insurance: unweighted and weighted provider share of partnerships
Coalition loyalty schemes and frequent flyer programs offering home emergency insurance: provision rates and operating models
Consumer product manufacturers offering home emergency insurance: provision rates and operating models
Consumer product manufacturers offering home emergency insurance: unweighted and weighted provider share of partnerships
Estate agency and property service firms offering household insurance: provision rates and operating models
Estate agency and property service firms offering household insurance: unweighted and weighted provider share of partnerships
Football and rugby clubs offering household insurance: provision rates and operating models
Football and rugby clubs offering household insurance: unweighted and weighted provider share of partnerships
Internet, media and telecoms entities offering household insurance: provision rates and operating models
Internet, media and telecoms entities offering household insurance: unweighted and weighted provider share of partnerships
Online price comparison providers offering household insurance: provision rates and operating models
Online price comparison providers offering home emergency insurance: provision rates and operating models
Retailers offering household insurance: provision rates and operating models
Retailers offering household insurance: unweighted and weighted provider share of partnerships
Retailers offering home emergency insurance: provision rates and operating models
Utilities companies offering home emergency insurance: provision rates and operating models
Utilities companies offering home emergency insurance: unweighted and weighted provider share of partnerships
Partnerships of the Post Office and other major brands offering household and home emergency insurance
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