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Affinity Insurance News - Summer 2009

Fortis UK agrees new distribution relationship with Tesco Personal Finance...

In perhaps the most significant development in affinity and partnership marketing of insurance in the UK during 2009, Tesco Personal Finance and Fortis UK have announced that they are in exclusive discussions to form a new partnership to provide motor and household insurance. The deal, agreed in principle, will mean that customers will benefit from the combined capabilities of both parties. Tesco will take greater control of pricing and the development of new products, while Fortis will bring considerable expertise on underwriting and claims management. Jointly, the companies expect to create around 1,500 new jobs in the UK. Final binding terms are expected to be agreed by the end of August and the deal will be subject to normal regulatory and governance approvals.

The partnership involves over £500 million in annualised total gross premiums written and could be underwriting new business and renewals from the second half of 2010 through a newly formed entity. The deal follows in the wake of the reconfiguration of Tesco Personal Finance as a wholly-owned subsidiary of Tesco as opposed to a joint venture with RBS and sees Fortis UK potentially replacing RBS Insurance as the main insurance partner.

... and steps in to handle sales, administration and claims services for Toyota

In another significant boost to the affinity insurance operations of Fortis UK, the company has also announced having entered into exclusive discussions with Toyota and its insurance partner in the UK, Aioi Motor & General, to work together to provide branded motor insurance products to Toyota's UK customer base. The deal, currently worth over £20 million in annualised total gross premiums written, builds on the position of Fortis as the third largest car insurer in the UK and is the first manufacturer-branded scheme secured by the company. 

The initial three year deal, agreed in principle, will create around 50 new jobs at the office of Fortis UK in Stoke-on-Trend and up to 20 claims roles at the company's Eastleigh and Gloucester offices. The deal is designed to ensure further levels of quotability, conversion and retention across Toyota's 1.3 million UK customer base. In essence, Aioi Motor & General will continue to underwrite the branded motor insurance products marketed by Toyota with Fortis handling the sales, administration and claims services.  In addition, Fortis will also reinsure a proportion of the business underwritten by Aioi Motor & General.

Junction extends and upgrades affinity partnership with Auto Trader...

Also in the UK affinity insurance market, Junction, a leading affinity insurance provider and part of the BGL Group, has extended its partnership (known as a joint business framework) with Auto Trader, a prominent motoring website (autotrader.co.uk), for a further five years. Auto Trader originally selected Junction in January 2007 to launch its own brand Auto Trader Insurance, with bespoke features tailor made to suit the specific needs of its customers, including a 30-day mechanical breakdown warranty, ideal for those insuring a second hand car.

The agreement began in 2007 and, following the success of the first two years of the partnership, has now been extended to run until 2014. This means that both Auto Trader and Junction will continue to contribute to marketing spend and initiatives for the insurance brand, as well as sharing in the resulting profits. Under the agreement, Junction has also developed a branded aggregator facility, Auto Trader Compare. Part of the extension to the deal will also include further enhancements to Auto Trader's offer on its aggregator facility to vastly increase the number of members on the panel thus maximising its customer growth potential.

Once upgraded, the new Auto Trader Compare site will be a fast quote engine searching more than 400 insurance prices and returning competitive quotes in a matter of seconds. It will benefit from greater transparency on each motor quote, through at-a-glance product benefits and excess levels.

...and passes a milestone of 1.5 million customers for motor and home insurance

In a separate announcement, Junction has also announced that it now handles in excess of 1.5 million customers across its various partner brands for motor and home insurance, a figure that represents 100% growth during the two years to the end of June 2009. The increase results partly from the addition of significant new partners in recent months, including HSBC and RAC, and partly through the expansion of existing partner portfolios for brands including Auto Trader, M&S Money and Post Office.

AXA and MACIF roll out 'micro-insurance' venture with Adie on national basis

In the first of several initiatives in France, AXA and Macif have extended a trial partnership for 'micro-insurance' with Adie (Association pour le Droit à l’Initiative Économique) from five regions to the whole of metropolitan France. Up to the end of the trial, 800 new 'micro-insurance' contracts were sold representing penetration across a quarter of the micro-businesses financed by Adie in the five regions in question. The aim of the three partners is now to reach 4,000 policies by the end of 2011 with insurance cover offered specifically for customers with business premises, on one hand, and homeworkers, on the other.

Adie was founded in 1989 to bring the principles of micro-credit to France, and aims to provide micro-credit to help individuals excluded from the labour market and the classic banking system who wish to start their own business.

CNP Assurance and MFP Services extend 60 year old partnership

Meanwhile, CNP Assurances and MFP Services have renewed a partnership that expired at the end of 2008 until the end of 2013, through their subsidiaries MFPrévoyance and MFPrima. This renewal consolidates the original partnership formed in 1947 between CNP Assurances and the various mutual organisations for public administration, including their federation, with a particular focus on their activities for protection and loan insurance.

This new five-year agreement has a double aim: to develop new products and services so that the mutuals can meet the emerging needs of their members; and to ensure a sufficient timespan for the future of their joint initiatives.

Together, CNP Assurance and the mutuals for public administration today insure about four million public sector employees. The risks covered by their protection policies include death, incapacity, loss of employment of their partners and retirement. Moreover, a significant business has also developed to insure loans supported by the mutuals over the years. In fact, the total turnover of CNP Assurance’s business secured through these mutuals was €555 million in 2008.

Groupama and PRO BTP unveil plans for joint venture in early 2010

Groupama and PRO BTP have signed a protocol confirming their intention to form a partnership to improve the services provided to their policyholders by means of creating a joint structure in early 2010 specifically to oversee networks of health professionals. PRO BTP is the leading trade association for social protection in France, with 3,710,000 members from the building and public works sectors, and operates in the areas of protection, retirement, savings, insurance, health, holidays and social assistance.

This arrangement will initially concern the optical and dentistry sectors and will result in: access for the six million people insured by the two groups to networks providing quality services at prices that will reduce the policyholders’ contribution; a greater number of policyholders for Groupama's partner opticians and dentists, and the provision of a new Internet portal specifically for their use. The joint structure will have its own brand name to ensure clear visibility for the jointly steered networks.

Eventually, it is intended to extend this partnership between the two groups - based on a common professional vision and values - to include other services for the benefit of all policyholders.

Aviva France secures commercial affinity link with association for entrepreneurs

Another development concerning a French trade association has seen Aviva France and its network of insurance agents signing an exclusive agreement with the Union des Auto-Entrepreneurs (UAE), an association for entrepreneurs, making them the association’s exclusive insurance partners. The UAE is an independent association recognised by the French government and its aim is to support entrepreneurs by offering advice and services adapted to their new small business status.

Members of the UAE are able to acquire insurance via the Internet which immediately produces an insurance certificate which is valid for one month and to choose their insurance agent. The partnership covers public liability policies and legal protection. Moreover, as a result of the partnership, Aviva France joins the official UAE Partners Club, which offers entrepreneurs services intended to help them to set up, manage and develop their businesses.

Willis ties with the British Retail Consortium for commercial insurance

The UK has also seen a flurry of new initiatives in commercial insurance since the beginning of June 2009. Among these is a strategic alliance formed between the British Retail Consortium (BRC), a leading trade organisation for UK retailers, and Willis, for the provision of a range of bespoke insurance services to the BRC's retail members. As part of the exclusive arrangement with the BRC, all BRC retail members will receive a complimentary review of their current insurance coverage and a detailed report on the extent of the cover required and how Willis can help reduce their insurance costs.

Willis believes that through its extensive background and experience in retailing, its insurance experts who form the Willis retail practice understand the specific needs of the retail sector and can apply that expertise to finding the most productive and cost-effective insurance and risk management solutions for clients. Willis already provides its services to many major retailers and also offers a wide variety of added-value services such as checking landlords’ premiums, logistics reviews and business continuity planning.

Heath Lambert creates bespoke scheme for Scottish building firms

In a separate deal, the Scottish Building Federation (SBF) has introduced a new insurance scheme created by Heath Lambert’s Commercial Affinity and Small Business team. The scheme gives the SBF’s 700 members access to competitive insurance products, as well as mitigating some of the potential hazards through effective risk transfer and the unexpected events that can disrupt and delay project completion. Heath Lambert has designed the scheme to be applicable to every SBF member, from 'one man bands', to multi-national construction companies. In fact, specific insurance products have been created for members with up to a £5 million turnover, while at the larger end of the scale the service is bespoke.

Hiscox aims for coverage of 50,000 SMEs through commercial affinity programs

Also with a focus on the UK commercial affinity market, Hiscox has announced a major drive to grow its existing book of commercial insurance schemes. With an aim of building a portfolio of scheme business of up to 50,000 small and medium-sized companies over the next three years, Hiscox is looking to add to the success of its existing commercial schemes. These include a recently acquired facility for pest control contractors which, in partnership with broker Bradshaw Bennett, covers more than 500 enterprises. Other schemes up and running include doctors’ surgeries, electrical contractors and museums.

According to Hiscox, many smaller, niche professions can find it difficult to buy appropriate business insurance and, in response, it has been working with a number of brokers to bring new commercial schemes to the market. These schemes are designed to provide tailored and good value insurance coverage with the added benefits of dealing with underwriters and claims handlers who build up an ongoing knowledge of the particular demands of each profession covered.

AGF Retail endorses AEGON employee sickness and disability offering

A new insurance marketing initiative involving a trade association has also commenced in the Netherlands where AGF Retail, the trade association for the fruit and vegetable industry, has expanded a relationship with AEGON, which already covered business insurance, disability insurance and motor insurance, to the insurer's Healthy Work Plan. This contact, which was developed in collaboration with VSP Risk, is a comprehensive insurance policy for employee sickness and disability, with a choice of various modules to provide the necessary flexibility.

FirstAssist wins travel insurance mandate with ONE Underwriting

In the realm of travel insurance in the UK, FirstAssist Insurance Services has announced a significant new business win which cements its position as a prominent provider in the travel insurance market. Specifically, FirstAssist has won the contract to provide ONE Underwriting, a part of the ONE Group, with travel insurance products and underwriting. This includes ONE Group's insurewithease and OUL Direct brands. FirstAssist believes that this mandate provides further evidence of its ongoing success in the general insurance market, especially in the area of white labelling. Travel is a core part of the FirstAssist business and its comprehensive range of cover includes impaired life cover, independent traveller policies, online medical screening and scheduled airline failure insurance (SAFI).

ERV commences travel cover distribution through Deutsche Bahn

In Germany, ERV has started to sell its travel insurance policies through bahn.de, the online portal of Deutsche Bahn. Customers of bahn.de are now able to choose cover for travel cancellation for a price of at least €5. Moreover, customers in possession of a BahnCard, the loyalty programme offered by Deutsche Bahn, have the option of purchasing a so-called BahnCard Reiseschutz which in addition to travel cancellation insurance also includes travel accident insurance and other services such as a full compensation for the loss of the BahnCard. The basic version of BahnCard Reiseschutz will cost €16.

Zurich Deutschland and Ideal Versicherung extend link to long-term care insurance

Meanwhile, Zurich Deutschland and Ideal Versicherung, a Berlin-based mutual insurance company focusing on insurance cover for senior citizens, have extended their distribution partnership to long-term care insurance from the beginning of July 2009. Under the terms of the agreement, Zurich will offer Ideal’s PflegeRente product to its customers both through its agents as well as its banking partner Deutsche Bank. Indeed, Zurich has already been offering Ideal’s funeral expenses insurance since 2006.

Mapfre Asistencia secures distribution tie with automotive services specialist

Also in Germany, Mapfre Asistencia has established an agreement with Pro-Car Garantien & Vertriebssysteme, a company specialising in automotive services, for the distribution of its own automotive insurance and warranty policies branded as European Motor Pack. These include breakdown recovery insurance, extended warranties for new and used cars, GAP insurance and tyre insurance. Indeed, Mapfre Asistencia has been marketing these policies in Germany since the end of 2008 and by means of the relationship with Pro-Car Garantien has secured a link with an organisation with over 6,500 points of sale across the country. As an initial target, the two partners hope to reach annual sales of 10,000 policies.

RAC extends branded breakdown recovery service with niche car manufacturer

In a separate development in the automotive field, this time in the UK, RAC has extended its contract for branded breakdown recovery insurance with Proton for a further three years. With around 7,000 vehicles insured already, all new Proton vehicle sales, including the new 'dual fuel' vehicles, will be covered as well as used vehicles with extended warranty cover.

Heath Lambert wins Debenhams household insurance mandate in five year deal

In a final development in the UK's affinity insurance market, Heath Lambert has announced that it has been appointed as the sole provider of cover for the household insurance product marketed by Debenhams for five years. Debenhams Retail has 154 stores across the UK and Ireland and a fully transactional website by means of which Debenhams Direct has established itself as a successful online retailer with nearly 3 million customers each month.

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