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Penetration of affinity and partnership marketing up in U.K. commercial insurance: Finaccord


August 12, 2015   by Canadian Underwriter


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A new study out of the United Kingdom indicates that affinity schemes for non-life commercial lines insurance there are continuing to expand, with penetration growing, especially among professional associations.

Affinity schemes are on the rise as brokers and underwriters strive to grow market share and profitability in a tough market

The Finaccord study shows affinity schemes are on the rise as brokers and underwriters strive to grow market share and profitability in a tough market, notes a statement Tuesday from the company, a market research, publishing and consulting company specializing in financial services.

Affinity and Partnership Marketing in UK Commercial Non-Life Insurance – an updated and expanded study of insurance partnerships in place with commercial affinity groups in the U.K. – is based on a survey between March and May 2015 of 1,280 actual and potential partner organizations for commercial lines affinity schemes across eight categories, including online aggregators and brokers, financial institutions and professional organizations.

Finaccord reports the investigation found that 42.0% of surveyed partner organizations offered at least one type of commercial non-life insurance to their members or customers. “Moreover, among professional associations, the rate of involvement reached 63.1% while 45.8% of trade associations had at least one scheme up and running,” the company statement adds.

“The previous equivalent research issued in the first quarter of 2013 had found that 40.5% of all actual and potential partner entities were involved in this arena (commercial line affinity programs), including 53.2% of professional associations and 43.3% of trade associations,” Finaccord consultant Claire Fetherstonhaugh notes in the statement. “As such, the metrics have ticked up somewhat since then,” Fetherstonhaugh adds.

That brokers are instrumental in setting up and operating the vast majority of these commercial affinity schemes is clear since only 8.0% of all product initiatives identified – numbering more than 1,300 in the latest research – were being run on a direct basis by an insurance underwriter, the company notes.

“Rather, the preferred operating model among partner organizations is for commercial lines insurance products to be arranged in conjunction with a single, external broker,” Finaccord adds. [click image below to enlarge]

Affinity and Partnership Marketing in UK Commercial Non-Life Insurance is based on a survey of 1,280 actual and potential partner organizations for commercial lines affinity schemes across eight categories, including online aggregators and brokers, financial institutions and professional organizations

The research indicates Towergate and Arthur J. Gallagher had a 9.4% and 7.7%, respectively, share of these relationships. The remaining 77.4% of initiatives were spread thinly across more than 200 different brokers.

While more than 200 brokers were mentioned in conjunction with the organization of at least one commercial affinity scheme, notes Finaccord, where final underwriters were identifiable, over 50 are involved in at least one program.

Commenting on brokered and directly underwritten programs, Fetherstonhaugh notes that “given the fierce competition across the U.K. commercial lines market, this should be an advantageous position as affinity schemes provide the opportunity for brokers and underwriters to secure large numbers of relatively homogeneous risks in a potentially cost-effective manner.”

Other key study findings include the following:

• the maximum rate of polled partner organizations arranging some form of commercial insurance to their members was 91.1% for commercial liability cover set up by sports organizations;

• across all organizations, commercial liability is the type of insurance most likely to be offered (35.0%), followed by commercial property (23.2%), professional indemnity (23.2%), commercial specialized (19.5%) and commercial motor (12.1%); and

• where commercial affinity schemes are in place, the average is for between two and three of these types of cover to be available.


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