Roundtable: The future of affinity insurance in the digital age

Affinity relationships have traditionally offered an additional source of income through working with a non-insurance brand to offer cover to its customer base. But with the high street in decline, customers’ retail habits are changing, and these partnerships will have to adapt to this increasingly digital landscape. 

So, how are insurers now tailoring their products to better meet the evolving needs of affinity partners and their clients? This question kicked off a recent roundtable held by Post in association with Crif Decision Solutions.

Carl Carter, CEO for CPP Group UK, begun by saying that the key to this is stepping back and understanding what the partner’s objectives are.

He said: “Different brands have different desires and objectives and commercial values and gains that they want to meet. We also need to look at the culture of the business so that is a fit for us.

“A lot of it will come back from data. Also, you really need to understand what the customer wants, what they value, and to make sure what we are delivering really aligns with them. So, lots of focus group work is useful.”

Urban Jungle insurance partnerships manager, Camille Charbit, said it ensured its team gathered lots of data and knowledge when deciding what the insurance offer should be.

She added: “But equally our partners know things that we don’t necessarily know so we always make sure it is a discussion and everything is being communicated really clearly.

“We make sure each other’s learnings are shared so that we can benefit mutually [from one another].”

Kirsty Walker, partnerships director at BGL Group, agreed saying: “We have to understand that our affinity partners have [a core] business, so we have to understand their brand and protect [its] value.

“The customer could have a banking relationship or a mortgage or lots of different things through that provider, so we have to take that really seriously and understand that those same values translate into the product we are working with them on.

“The most important thing is to understand the customer and [ask]: what are we giving them that’s different? Is it price, service, convenience? How are we adding value – because if you are not doing something that drives customer value, you won’t have the longevity.”

Another key factor is ensuring the brand and insurer are the right fit for each other.

Ross Halifax, affinity director, Markerstudy explained: “During the pandemic, we saw a lot of lines get squeezed in terms of distribution, margins, etc. so education was a big thing.

“We had lots of people coming to us saying ‘I just want to get into X line’ or ‘want to do this’ and we said, ‘Why do you think that is going to work?’. So, we got [better] at saying no unless we could find something different; rather than [just] sticking another brand on the shelf.

“[We are] trying to educate people what it means in terms of income streams. What sounds good [in the] long-term, [might not immediately be so beneficial] in the short-term.”

Key relationships

David Perry, managing director, FSB Insurance Services added: “Our key relationship is the Federation of Small Businesses. Which, whilst they are the largest affinity group in the UK, actually consists of hundreds of little affinity groups. That makes our job really difficult.

“The price is completely gone in terms of USP, partly because of the hard market, partly because of the pricing practices work done by the FCA. It is more about finding the solutions to meet those customers’ needs.”

Chris Barclay, sales director at Marsh Commercial agreed saying: “From an outcome perspective, regardless of commission to us as a business, every client needs to feel like the most important client in the world. Doesn’t matter if it’s £10 or £100,000. That is a real strategic objective for us.

“So how do we deliver the service – whether it is distribution and channels or products and carriers [which] are imperative to that collaboration?”

Carter explained that affinity partners rely on insurers to have a consultative approach.

He said: “We are there to help them, not to tell them what to do. We are there to guide and give shared learning. One of the things we have seen over the past few years is the way the pandemic has helped with customer engagement through increased adoption of digital, apps and technology across all ages – right up to vulnerable customers. [What] really is core for us is what we can go beyond the product, because now, experience is really key to the customer.”

Director of insurance product and distribution at Barclays, Marzia Hussain, mentioned that, from a retail banking perspective, this is where partnerships can be powerful.

She said: “There is something the bank can complement with what the insurance partnership can bring. We have 24 million customers at Barclays; of which eight to nine million are digitally engaged and it is increasing substantially because of the way customer behaviour has changed with the pandemic.

“So, there are things that one partner can bring to the table that the other partner can complement but it is about working out how do you all knit it together, so it is a win-win and not just a ‘them’ and ‘us’. The thing that I really work on in [is] the mindset, the culture. So, you’ve got these two different brands, these two different partnership cultures and you’re bringing it together.”

Longevity is also critical, said Caroline Cooper, director of personal lines partnerships at RSA.

“You are in it for the long-term”, she said. “It’s not a flash in the pan. You are both experts in your own field. You are there to advise, to educate and really come together. And that will define the relationship and the value of the partnership. It’s much bigger than the individuals there.”

Critical to this is managing the expectations of affinity partners in terms of bringing a relevant insurance solution to market.

More education

Richard Edwards, head of UK distribution & partnerships at iptiQ by Swiss Re, said affinity partners are going to need a lot more educating: “There are a lot of failed examples out there where the product is not a good fit. Or a product that just needs a minor tweak for it to be revolutionary.

“I would say about 20 opportunities come across my desk each week for every one that’s interesting. For all the talk about the customers and partners, the business case has got to stack up as it costs a lot of money to set a partnership up.”

Carter agreed that turning down partnerships was sometimes the right thing to do: “We owe it to ourselves, to the brand and to their customers to say no if we are not a fit. We should not try to be all things to all people.”

“The partnerships that often work involve similar organisations who have very experienced insurance [professionals] within their ranks too”, Walker said.  “We shouldn’t be thinking that they don’t have as much knowledge as people in our industry.

“Equally, you have other businesses where they are just trying to do something on the side. If it doesn’t have that real buy-in corporately, whether it is access to the right data or if it’s integrated into the apps, if it doesn’t have support top to bottom, they just don’t’ work”

Clark added: “One area we are getting a lot better at is product testing so, rather than having a great idea and developing a product for it, it is talking to the customers and making sure it is actually needed.”

Carter agreed: “And that is where the digital age is really helping us as we can bring a product to market really quickly and then adapt it.”

So how to affinity players adapt to make themselves more attractive to potential online and digital partners?

Bilal Asad, strategy and innovation manager at Crif Decision Solutions said: “The generation growing up now want everything digital so if they can make a claim on their phone and get a call back afterwards, why not? Take a photo of the damage, get a phone call after to say what the issue is.

“And that end-to-end journey begins by reducing the time spent purchasing the policy. Minimising that right down to what [information] is [actually] needed from the customer.”

Barclay suggested those present needed to consider what digital actually means: “The reason we work with a carrier or a digital solution provider in terms of IT and infrastructure is because they are the best at what they do. But how [do you] harness that knowledge and make sure that we all share it together so [that] it becomes a long-term strategic partnership? That is critical to everything we do.”

Perry admitted he had some concerns about the speed that people are trying to develop digital solutions.

He said: “SMEs, commercial insurance, it’s complex. I do feel that in the rush to try and make the experience as quick and easy as possible, mistakes are being made. We have got to be very careful. People are rushing to be [all about] the snappy front-end, but you’ve got to take care.”

Brendan Clark, head of line- affinity at Great American International Insurance argued it was not just about simply white labelling an existing insurance product anymore – it is about customer experience, whether it is digital or not.

He said: “Where we have been in the past as an insurer, is we have invested in a piece of technology and then tried to make everything fit that. That doesn’t fly anymore. You need to have several different solutions depending on the customer segment.

“Too many insurers and brokers assume that there’s one eco-system that is going to work for everyone and it’s a really dangerous assumption. As insurance experts we always assume we know what’s best and that is a mindset we need to change.

“Getting that “perfect ecosystem” is vital to the success of any affinity partnership.”

Talking brands

Ajay Mistry, head of digital sales and marketing at Clear Insurance Group, said listening to the affinity partner and their customers is important: “They know their customer-base so if you go in there and say, ‘this is how we are going to do it’, it will never work.

“I also think it’s about getting to know the brand organisation and getting buy in from the whole organisation. It is easy to work with the partnerships director and have a great relationship but if the end callers on their side are not doing their job, it fails.”

Walker agreed saying: “They know how to talk to their brand, who their customers are. We can then help translate how to sell insurance into that space or service proposition.

“That is where you have got to come in as equals. The days have gone where you find someone, and you tell them you are going to do it like this. The most successful partnerships out there are the ones where there is a respect for both parties about the strengths that each other brings.”

Hussain added: “It’s great having a great proposition, great added value, great price, slick journey, but you have got to really understand why your affinity customers insure with yourself. And that is really fundamental to us. Why should a Barclays customer insure with Barclays? You have got to begin right at the starting point

Barclay concluded: “A perfect eco-system comes from taking all the little tiny parts we have spoken about today and bring them together.

“From managing expectations, uncomfortable discussions and not being proud enough to turn around and say, ‘I got it wrong’.  If we stick to that model and that approach, it will always go right.” 

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