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.
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.
