Hood Group partners with Canopius for MPPI cover

Hood Group has announced a partnership with Lloyd's Syndicate 4444, managed by Canopius Managing Agents. The partnership covers the mortgage payment protection insurance provided by Hood's "Select & Protect" brand, which mainly distributes general insurance products through mortgage intermediaries and IFAs. 

Many mainstream mortgage lenders have steered clear of offering MPPI products in recent years, but they continue to be marketed by many mortgage brokers and IFAs. As well as through Select & Protect, MPPI is also provided by its direct competitors including Uinsure (also underwritten by Canopius) and Paymentshield (underwritten by Covea).

Select & Protect's MPPI product was previously underwritten by Aviva and Davies Managed Systems will now be responsible for all new claims. 

Nationwide and RSA launch home insurance partnership

Nearly 2 years after the partnership was announced (see our post dated 17 December 2015 for details), Nationwide Building Society has launched its new home insurance partnership with RSA, which will operate for the next 5 years. 

The launch was later than originally anticipated (February 2017), but is likely to represent annual GWP to RSA of between £180 - £200 million. One source has suggested that the partnership will result in up to one million new household customers for RSA, but this figure seems overly ambitious given the figures previously quoted by DLG; the insurer which lost the account after 15 years.  

Nevertheless, the partnership is likely to be RSA's single largest affinity deal and does reinforce its already impressive range of partnerships with mortgage lenders, including Yorkshire Bank, Bank of Ireland and Yorkshire and West Bromwich building societies.    

Nationwide has over 15 million customers. It also works with Legal & General for the provision of life insurance, but exited the motor insurance market and its partnership with LV= earlier this year (see our post dated 30th May 2017 for details). 

Unite's new car insurance partner shows increasing complexity of affinity deals

Unite, the UK's largest trade union already provides a range of financial services to its members and has recently launched a new car insurance comparison service with "Unite Protect Insurance". This is a trading name of Union Income Benefit (UIB), which also provides a range of other insurance services to the union, including AD, travel and Female Cancer covers. 

UIB provides the "Unite Protect" branded aggregator via Vast Visibility Limited; a digital specialist with a background in motorcycle insurance and which also offers white label comparison sites for brands including Asda and Bauer Media titles (e.g. Car, Motorcycle News, Heat and Grazia). 

The situation is further complicated by Unite's separate provision of car insurance through its longstanding relationship with household insurance specialist, UIA; itself a provider to a range of other large trade unions.   

UIA partners with Autonet to provide car insurance to Unite's members, as well as travel insurance with AllClear Insurance Services and pet insurance with Petwise.

The range of separate and competing deals available to Unite's members is not altogether unusual in the trade union sector. This may reflect the need to cover different distribution strategies, but will inevitably impact on the clarity of marketing messages and the need to share margins with a wide range of providers. 

Allianz and LV= joint venture: the impact on partnerships

Today's announcement of the joint venture being created by Allianz and the general insurance arm of LV=, has focused mainly on the scale of the new business and its position as the UK's 3rd largest personal insurer. 

The reports largely ignore the impact of the new venture for affinity partners of the two insurers and it may be worth looking at the current differences in their partnership strategies. 

For such a large insurer, Allianz has been largely absent from some partnerships' distribution, with the exception of pet, motor and some specialist covers. For motor partnerships, it has concentrated primarily on manufacturer schemes such as Ford and BMW Group (unusually, for BMW it also provides home and travel covers), but also others including Jaguar, Dacia, Kia and Mazda. The bulk of these schemes involves Allianz working with specialist administrators including Europa Group and Original Insurance. 

LV= has a long history of working in affinity distribution and currently partners with Unison (car), GMB (car) and Prospect (car and home). It also has one of the UK's longest affinity relationships and has worked with the CSMA since 1923. LV= also provides a number of life and protection partnerships which will not be part of the new venture. 

Partnerships are likely to represent a significant distribution channel for the new business, but it is questionable whether these will match the premium levels of Aviva, RSA, Ageas or UK Insurance. 

N Brown faces £40million redress for add-on mis-selling

Online retailer N Brown; best known for the JD Williams, Simply Be and Jacamo brands is faced with a compensation bill of up to £40million for add-on mis-selling. This relates mainly to the sale of credit insurance products between 2006 and 2014, and comes on top of an earlier penalty of £22.9m for PPI mis-selling, which hit profitability last year. 

The fine follows a review undertaken by the FCA into add-on insurance products which were deemed to have little or no value for customers. In February 2017, the FCA also agreed a "redress scheme" with Express Gifts, a subsidiary of Fiindel plc, for insurance products providing inadequate value. 

Financial services represent a significant source of revenue for N Brown, which is FCA registered in its own right, although this primarily relates to the provision of consumer credit. 

The "third party underwriter" responsible for the products and which partnered with N Brown has not been named in press reports, but the company has suggested that it may seek the insurer's assistance in offsetting the fine. 

We believe that the FCA may ultimately look in more detail at the regulatory issues surrounding insurance affinity partnerships and particularly, the ways in which appointed representative (AR) and introducer appointed representative (IAR) relations operate. Regardless of this, the demand for rigorous and effective compliance support has once again been highlighted. 

AIG LIfe partners with RBS for life cover

AIG Life has been selected as the sole protection partner for customers of Royal Bank of Scotland, NatWest and Ulster Bank. The partnership is designed to provide a range of "simplified" protection products, including life, critical illness and a guaranteed whole of life plan aimed at the over-60s. 

The partnership represents a significant win for AIG Life, which only announced its first significant affinity partnership in May 2016, when it secured a deal with the general insurer NFU Mutual (see our post dated 10 May 2016 for details). 

It also marks a significant loss for Aviva, which has worked with RBS since at least 2010. Aviva does however, retain protection partnerships with Barclays and Santander banks. 

The RBS Group continues to work with UK Insurance for home insurance, but ceased offering car insurance in January 2017, other than for its "Private Banking" customers. 

Nationwide ends motor partnership with LV=

Nationwide, the UK's largest building society, has announced the termination of its motor insurance partnership with LV=, with effect from 30th June 2017. From this date, the society will no longer offer new policies and it is expected that the management of renewals will pass to the insurer. 

The deal, estimated to be worth £5 million per anum, is no longer considered a strategically important one for the society. The end of this relationship also marks the end of one of the last motor insurance partnerships provided by any UK building society. It remains the case however, that most of the major banks continue to provide motor insurance to their customers. 

It is noteworthy that Nationwide's 5-year home insurance partnership with RSA, announced in December 2015, has still not commenced, even though it was scheduled to launch in February 2017 (see our post dated 17 December 2015 for details). This means that Nationwide home insurance continues to be underwritten by UK Insurance, which also provides travel cover on Nationwide's "added value" current accounts. The society partners with L&G for life and protection policies

Virgin Money tries (yet) another partner for life assurance

Virgin Money has announced plans to launch a new life assurance partnership with BGL Group, following earlier efforts with Scottish Widows (2006), Friends Provident (2009) and Friends Life (see our post dated 20th August 2013 for details).

The new 5-year partnership is due to start in Summer 2017 and will include a range of term and critical illness products. Despite the strength of the Virgin Money brand and its apparent attractiveness for many, it is understood that life assurance has previously seen disappointing results. In addition, Virgin Money does seem to change its provider partners on a regular basis, but is currently working with Ageas for home and motor insurance, InsureandGo for travel insurance and UK Insurance for pet covers. 

The more significant development is that it represents BGL Group's first foray into life assurance partnerships, following its many successes in general insurance partnerships with the Junction brand. 

It is not yet clear whether BGL will provide a panel solution or instead, will follow the model of its "Beagle Street" brand which provides life assurance underwritten solely by Scottish Friendly.  

BIBA partners with Marmalade for young driver insurance

BIBA, the organisation representing the UK's 2,000 general insurance intermediaries, has launched a new telematics insurance partnership with Marmalade (itself a BIBA member) for young drivers.  

The product is essentially an enhanced version of Marmalade's own "New Driver" policy and seeks to take advantage of the growing market share of telematics products. Marmalade products are currently underwritten by Allianz and Zenith Insurance. 

Marmalade is a long-established player in the "young driver" market and has also sought to distribute its products through other partnerships; most notably with a number of driving instructors, including BSM and RED Driving Schools. It has previously worked with Ford and Kwik-Fit Insurance. 

Sainsbury's re-enters mortgage market with L&G and London & Country

Sainsbury's Bank has partnered with London and Country (L&C) and Legal and General Mortgage Club (L&G) to re-enter the mortgage market, after an absence of over 12 years. Sainsbury's previously offered mortgages when its bank was jointly owned with Bank of Scotland. 

The mortgages will be available direct to Sainsbury's customers and through intermediary pilot partners such as L&C. The partnerships are essentially the means for Sainsbury's Bank to offer its products through the mortgage intermediary market rather than traditional "affinity" relationships. It is expected that a number of other mortgage brokers will be used to bolster distribution in the next 12 months. 

Sainsbury's Bank has also suggested that one of its USPs, will be that customers will benefit from shopping rewards through its Nectar loyalty programme. 

Direct Line secures partnership with Tesla (and Nationwide update)

Direct Line has announced a car insurance partnership with Tesla Cars, as part of a wider initiative into advanced technology and driver aids. The partnership has not been arranged through Direct Line Group's (DLG) partnership business - "Brand Partners" - and appears to be an "introducer only" relationship. Current estimates suggest there are over 2,000 Tesla vehicles in the UK, but the brand is experiencing strong growth. 

DLG currently has more traditional motor manufacturer partnerships with Peugeot and Citroen and at its 2016 results presentation (7th March 2017), DLG also announced that the length of these partnerships had been extended.

A more significant announcement was also made in the results presentation regarding DLG's household insurance partnership with Nationwide Building Society. This had been expected to move to RSA in February 2017 (see our post dated 17th December 2015), but to date this has not happened and DLG announced that "Nationwide termination date [is] currently being reviewed and may result in a later migration." 

No additional details were provided.   

O2 breaks new ground with Junction partnership

Mobile network operator O2, has recently entered the car insurance market through its partnership with Junction Insurance. It has launched its O2 Drive Mobile App and 2 main propositions - "O2 Drive" and "O2 Drive - Box on Board". The latter uses telematics technology and is squarely aimed at younger drivers. 

The application is an early attempt to harness "Internet of Things" technology, and will use data to encourage safer driving and discounts on insurance premiums. The app is also linked to a range of linked services - motor breakdown, car servicing and maintenance - as well as other discounts and offers already available to other O2 customers.   

The cover is underwritten by Junction's car insurance panel and O2 claims that additional discounts may also be available to customers based on their length of relationship with O2, payment history and type of device. 

For many years, insurance providers have wondered how to develop proportions which might appeal to the technology giants and their massive customer bases. Even though the O2 offerings may not be particularly original, the partnership represents something of a coup for Junction and is likely to be repeated by other technology brands and insurers. 

O2 continues to offer "mobile insurance" underwritten by Telefónica Insurance.

Sun Life replaces Brightside with Junction

Sun Life has announced a new 5-year general insurance partnership with Junction, BGL's specialist affinity arm. The partnership will commence in March 2017 with home insurance, followed in June with motor insurance. Sun Life has already suggested an interest in travel and other lifestyle covers. 

One interesting aspect is that the partnership replaces Sun Life's previous "5-year partnership" (household only) with Brightside Insurance, which was announced as recently as October 2015 (see our post dated 22nd October 2015 for details)! This suggests that the Brightside relationship was not on target to help Sun Life achieve its ambitious target of quarter of a million GI customers within 4 years. 

Sun Life continues to work with BDML Connect for pet insurance (see our post dated 30th September 2015), Golden Charter for funeral plans and Hugh James for will writing. 

Junction remains one of the UK's largest affinity providers and as well as its longstanding partnerships with the Post Office, Santander and M&S, it has recently announced a new car insurance scheme, aimed at young drivers, with mobile brand O2.