Clydesdale Banking Group partners with Royal London for Over 50s life cover

Royal London has been appointed as the new provider of Over 50s life cover to customers of Yorkshire and Clydesdale Banks; members of the CYGB group. The product is available either via the banks' branch networks or online.

Clydesdale and Yorkshire had previously partnered with Engage Mutual Assurance to provide a similar product, although this deal has not been in place for a number of years. In addition, both banks continue to provide mainstream protection products through a partnership with Legal & General. Interestingly, L&G does have its own Over 50s life offering which it distributes through other affinity partners. 

The banks continue to partner with RSA for home and motor insurance, Hiscox for "high net worth" covers, AIG for travel insurance and Arthur J. Gallagher for commercial insurance.

The deal suggests an increasing appetite for partnerships by Royal London. The insurer has never been a significant player in this channel, although it did launch a major life deal with Post Office Money in January 2017.  

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.