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.   

Nationwide partners with RSA for UK's largest building society affinity deal

Nationwide Building Society has announced a new 5 year home insurance partnership with RSA, which will take effect from February 2017. The account, which has been held by Direct Line Group (DLG) for nearly 15 years, was worth just over £200m to the insurer in 2014. It is understood that the business was put out to tender by Nationwide in 2014 and there have been market rumours since Summer 2015, that RSA would be its new home insurance partner.   

The loss of the partnership represents a considerable blow to DLG's home insurance account. Not surprisingly perhaps, DLG has suggested that the Nationwide partnership was not as profitable as other household business and has emphasised that policies will effectively be "run-off" until Spring 2018.  

Nationwide is likely to be RSA's largest corporate partner and gives the insurer even greater market presence with mortgage lenders, where it currently works with a range of banks (Yorkshire, Clydesdale and Bank of Ireland) and building societies (including Yorkshire, West Brom and Nottingham). 

Nationwide continues to partner with LV= for motor insurance and Legal & General for life and protection products. 

Asda cuts short its Brightside partnership

Asda Money has announced the end of its motor insurance partnership with Brightside; at least for new business. The two organisations have worked together since 2012, when a home and motor insurance partnership was signed, with hopes of generating £70 million GWP "within 18 months". 

The motor partnership was renewed in March 2014; supposedly for a period of 3 years and in March 2015, Brightside signed a deal to provide a motor aggregator to Asda Money customers. It is understood that following this decision, Brightside will remain the provider for Asda Money's car and van renewal book. The Hood Group replaced Brightside as home insurance partner in July 2014, with policies underwritten by RSA.

The suggestion has been made that this is a strategic decision by Asda to wind down new business sales of its financial services products, but at this stage, it is not known how and whether this will impact on the retailer's other insurance partnerships.  

Asda has a reputation for its frequent changes of insurance partners and relatively short-term deals. At the time of writing, it also works with BDML Connect for pet insurance and, since October 2015, with Insure & Go for travel insurance. 

Principality extends partnership with L&G

Principality Building Society, the UK's 6th largest, has announced a new home insurance partnership with Legal & General. Some reports have suggested that the building society has "renewed" this partnership with L&G, but it is in fact, a new relationship for household cover. 

Legal & General has, however, partnered the Principality since 2013 when it replaced Aviva as the society's life insurance and financial planning provider. Principality also partners with Dignity for pre-paid funeral plans. 

The selection of L&G follows a tender exercise and sees the replacement of RSA as its home insurance partner. Nevertheless, RSA remains a market leader in terms of the number of building society home insurance partnerships, including Yorkshire, the West Brom and Nottingham. 

Homeserve selects Aviva as its underwriting partner

Homeserve, the UK's second largest provider of home assistance policies, has selected Aviva as its underwriting partner in a 5 year deal, commencing on 18 November 2015. 

Homeserve mainly markets its products through a range of affinity partners (in the UK and overseas) and these include Thames Water, Anglian Water, United Utilities and Aviva itself. 

Rumours originally surfaced in the Summer that Homeserve was seeking to replace AXA (Inter Partner Assistance), its underwriting partner since 2007, as part of a tender process.

The value of the partnership is said to be in the region of £300 million GWP per anum, which represents a significant sum for both insurers. The UK home assistance market has been valued at approximately £1.3 billion per anum.