L&G partners with Coventry Building Society

Legal & General has announced a new 5-year household insurance partnership with Coventry Building Society; the UK's 3rd largest. The deal is expected to be worth in the region of £25 million GWP, given that the Coventry is the 2nd largest society when ranked by all-important borrowing members. 

The partnership, covering home and landlord insurance, commences in January 2017 and follows L&G's other recent lender partnerships with Principality and Skipton building societies (see our posts dated 9th November 2015 and 13th October 2016 respectively). 

The loss of Coventry represents another major blow for A.J. Gallagher. The broker had previously lost the Skipton partnership to L&G and this now leaves Gallagher's with only a handful of relatively small societies in this sector and no obvious replacements of this scale. 

Many of L&G's other lender partnerships involve protection products, but unusually for a building society, Coventry does not currently have a partner in this area. 

Mortgage Advice Bureau partners with Vita for protection

The Mortgage Advice Bureau (MAB), one of the UK's largest mortgage brokers, has partnered with Cardiff-based advice firm Vita, to provide protection, critical illness and income protection products to MAB customers. 

MAB has over 900 advisers and claims to arrange approximately £10 billion of mortgages each year, through its panel of 90 lenders. It also partners with a large number of independent estate agents to distribute its mortgage services. 

It sees the new partnership as a means of extending its protection offering and took a 20% stake in Vita in the first half of 2016. 

Vita has been established since 2010 and as well as its relationship with MAB, it partners with Cavendish Online and a range of smaller IFAs and mortgage brokers. 

Legal & General secures another lender partnership

 

Legal & General has secured a new 5-year general insurance partnership with Skipton; the UK's fourth largest building society. The deal is a reasonably significant one in premium terms with an estimated annual GWP of around £5 million, focused on home and landlords' insurance. 

L&G works with 15 banks and building societies, but its partnerships are overwhelmingly based upon protection products (e.g. Barclays and Yorkshire banks and Nationwide and Leeds building societies). These can provide a good entry-point into general insurance relationships as has happened with Skipton (L&G has been its protection partner since 2012) and previously with Principality Buildng Society (see our post dated 9th November 2015.) 

RSA remains the dominant home insurance partner for UK building societies, but the loss of Skipton is a significant one for A.J. Gallagher, which continues to work in the sector with mostly small regional lenders.

The deal was signed in September and is expected to go live in December 2016. It is noticeable that at present, home and landlords' insurance is no longer available to new customers on the Skipton Building Society website, which suggests a smooth handover between A.J. Gallagher and L&G has perhaps not been achieved. 

Allianz extends long-term commercial partnership

Allianz has announced the renewal of its commercial insurance partnership with the Retail Motor Industry Federation (RMI). The RMI is the automotive trade body representing thousands of independent and franchised dealers, petrol retailers and bodyshops in England, Wales and Northern Ireland.

The real significance of the deal is that the two organisations have worked in partnership for over 25 years, which has allowed Allianz to develop a range of tailored "motor trade" insurance propositions for RMI members.

Allianz is often regarded as a relatively minor player in the UK's insurance affinity market, but it does have some significant motor insurance partnerships with Ford and BMW, as wellas a number of travel and pet insurance partnerships; primarily through its Allianz Global Assistance (Mondial) and Petplan brands. 

Direct Line Group "stops the rot" with RBS renewal

Direct Line Group (DLG) has announced that it has successfully secured a 3-year renewal on its home insurance partnership with Royal Bank of Scotland. It is understood that the partnership includes home and "private insurance" (the latter can include home, travel and pet insurance for private banking customers) for the RBS and NatWest brands. It will now continue until October 2020.

The partnership has been estimated to be worth in the region of £250 million to DLG and represents its most significant partnership; even before the loss of the Nationwide (see our post dated 17th December 2015) and Sainsbury's (see our post dated 1st March 2016) partnerships. 

DLG has also confirmed in its recent trading statement, that its travel insurance provided within the bank's "packed" accounts, will shortly be subject to a tender exercise. The value of this partnership to DLG is unlikely to be significant but the insurer believes that it will be involved in any competitive review. 

RBS continues to partner with DLG for car and business insurance, and with Aviva for its life insurance. 

AIG Life partners with NFU Mutual

AIG Life has been appointed by NFU Mutual as its partner to provide a range of protection products - term assurance, income protection, critical illness and whole of life. NFU Mutual is a leading provider of general insurance and investment products, specialising in the agricultural sector. 

The new partnership is due to commence in August 2016. It is understood that the products will be branded as "AIG Life" and at this stage, will not involve any white labelling. NFU Mutual has previously manufactured its own protection products, but currently provides its customers with advice on protection products through a relationship with "Future Proof Insurance". 

The new partnership is potentially a significant one for AIG Life and suggests its growing appetite for new protection partnerships. 

Direct Line Group loses Sainsbury's partnership from February 2017

In its trading announcement today, Direct Line Group has announced that it will cease underwriting new home and motor insurance business for Sainbury's customers with effect from February 2017. The value of this partnership is estimated to be in the region of £50m-£60m GWP. This follows the recent news that it will no longer underwrite the much larger home insurance partnership with Nationwide Building Society (see our post dated 17th December 2015 for details.) 

The insurer has, not surprisingly, claimed that the two partnerships (together representing over 25% of DLG's household account) provide considerably less profit than the rest of its household business. It has also reiterated its commitment to the partnerships' channel and announced that it is seeking to extend its partnership with the RBS group (RBS and Nat West brands) for a further 3 years. 

Sainsbury's has yet to announce its new insurance partner but given the size of the account, we expect it to be one of the "usual suspects". (N.B. Feb 2017 - It now appears to have brought the panels in-house.) The retailer currently partners with Allianz for pet insurance, Cigna for travel insurance and Legal & General for life covers. 

Lloyds Banking Group extends travel partnership with AXA

Lloyds Banking Group has extended its UK travel insurance partnership with AXA for another 5 years. The deal covers "Added Value" bank accounts for Lloyds Bank, Halifax and Bank of Scotland customers and standalone policies for Lloyds Bank and Halifax. 

AXA claims that the partnership covers approximately 2.8 million customers and that it will help to maintain its position as the UK's largest travel insurer. 

In November 2015, Halifax replaced its long-standing travel insurance partner, Cigna, with AXA.  

Lloyds Bank General Insurance continues to underwrite the group's household insurance product, and it partners with Junction (BGL) for motor insurance and Arthur J. Gallagher for business insurance.