Editor's Comment: Fairy godmothers and streets paved with gold?

For the uninitiated in the heady days of shoulder-padded, Stetson-wearing 1980s classic US soaps, that means waking up to find various momentous recent developments were nothing but a dream.

In this instance, that equates to Justice Secretary Ken Clarke not really having given the green light to practically all the industry’s long-voiced PI demands in his speech on Tuesday. But it seems he actually did. Apart from the big one: referral fees.

Everyone’s favourite love-to-hate topic was once again subject to a bit of masterly buck-passing. This time it was the Justice Secretary lobbing it over to the Legal Services Board for a decision on this subject. A couple of weeks ago it was turn of the Transport Select Committee, which was only too quick to say in its conclusion: “The Minister pointed out that other departments are responsible for issues such as referral fees.”

Perhaps one day, one department somewhere, will turn around, hold their hands up and say: “Referral fees? Why didn’t you say? Only too happy to make a cut-and-dried decision right now.”

Or maybe that’s the real Bobby Ewing moment. Turning our attention elsewhere, Post readers would be forgiven for assuming the road to affinity business is paved with pure gold — to see some of the bullish comments currently being made in the market.

First we have RSA’s new personal lines MD Mark Christer dismissing increasing competition in the battle for big brand tie-ups, as it seeks to secure “profit-generative” opportunities. By way of muscle-flexing, he points to the insurer’s money-making capabilities in the heavily aggregated world of motor insurance: “the most competitive in the world”.

Then we turn the page to find RBSI director of corporate partnerships Damian Arnold claiming the insurance group already has its sights firmly set on a new string of targets in the affinity space, evidently feeling buoyed by its motor deal with Sainsbury’s Finance.

Any tears at losing Tesco Bank to Ageas seem long gone. Even the dynamic duo—namely Igo4 founding directors Tom Cooper and Matt Munro—are banging the affinity drum. They too have apparently “identified the partnership market as a potentially lucrative sector”.

With a nod to the dominance of fellow intermediary Junction, they claim no one else “has aggressively gone in” and in-roads are there for the taking. But, it would seem the wider insurance community, has its doubts.

This week’s Post poll question asked: do big-brand affinity deals present adequate profit margins for insurers? And its result paints a different picture, intimating there is more mileage in tie-ups for brands than the underwriters.

Two thirds (66%) don’t agree such partnerships deliver the profitability goods, with less than a quarter (24%) agreeing brands bring in the bucks. Time will no doubt reveal the real winners and losers.

Lynn Rouse

Follow Lynn on http://twitter.com/posted_lrouse