Online aggregators have revolutionised the distribution of personal lines insurance in the UK. However, they have not repeated this achievement for commercial non-life insurance, and themselves rely on specialist brokers for selling commercial liability, property and professional indemnity insurance.

1. PRESS RELEASE
Over 40% of potential distributors of commercial
non-life insurance have established an affinity scheme
Towergate, RK Harrison and Bluefin are the leaders by number of schemes managed
London, 25 March 2013 - Online aggregators have revolutionised the distribution of personal lines
insurance in the UK. However, they have not repeated this achievement for commercial non-life insurance,
and themselves rely on specialist brokers for selling commercial liability, property and professional
indemnity insurance.
This is one of the findings of Finaccord's new report Affinity and Partnership Marketing in UK Commercial
Non-Life Insurance, which analyses the distribution of commercial lines through a wide variety of actual and
potential affinity distribution partners. Most notably, these include professional and trade associations plus
other types of organisation such as automotive associations, banks, building societies, online aggregators
and brokers, sports organisations and trade unions.
In total, Finaccord investigated 1,320 organisations and found that 535 of them offer at least one type of
commercial insurance policy, or 40.5%. This rate exceeds 50% for three categories of distributor, namely
sports organisations (84.2%), online aggregators and brokers (70.0%) and professional associations
(53.2%). This data is shown in Graphic 1 overleaf.
However, it should be added that sports organisations and professional associations tend to offer a limited
range of policies to their members, concentrating on commercial liability and professional indemnity
insurance, respectively. In contrast, online aggregators and brokers typically offer multiple types of cover,
including commercial liability, motor, property, and professional indemnity insurance. Across all these
categories of distributor, only trade associations offered a fuller range of policies, on average.
Nevertheless, there is a major difference in approach between more traditional insurance brokers such as
Endsleigh, Hastings Direct and Swinton, and online aggregators. While brokers usually offer policies that
they intermediate themselves in the normal manner, the major online aggregators have usually formed
partnerships with other brokers to act on their behalf, with the exception of commercial motor insurance.
In particular, Towergate Underwriting's YOUR Insurance brand works with both Comparethemarket.com
and Confused.com (for commercial liability and property risks), while Simply Business is used by
Gocompare.com, Moneysupermarket.com and Tesco Compare (for commercial liability, property and
professional indemnity insurance).
"By its nature, commercial insurance requires more specialist underwriting than personal lines and there are
fewer underwriters active in some of these fields, so it makes sense for aggregators to work with brokers for
these policies" comments David Parry, Managing Consultant at Finaccord. "Commercial motor insurance is
an exception where the aggregation model works well - in fact, affinity and partnership marketing schemes
run by most types of distributor rarely include commercial motor insurance, because aggregators and
specialist motor insurance brokers handle it best".
Across all of the distributors examined by Finaccord, brokers were found to be the most important type of
partner used for commercial affinity schemes. Finaccord identified a total of 1,345 of these initiatives,
counting a partnership for, say, commercial liability and motor insurance as two separate initiatives, since
different underwriters can be involved for the different risks. In total, more than 80% of these commercial
affinity schemes are organised through a broker, sometimes with one specific insurer used to underwrite the
risks.

2. Finaccord's research also ascertained that a very large number of brokers are active in the commercial
affinity market, since it involves a wide variety of distributors across a range of industries, each with different
insurance needs. Finaccord identified a total of 228 brokers involved in at least one of these schemes,
running a combined total of 1,264 initiatives between them.
In this highly fragmented market, only four brokers held a share of 3% or more of this total, led by
Towergate, which is the clear leader measured by number of partnerships at 8.9%. It is followed by RK
Harrison (4.0%), Bluefin (3.3%) and Giles Insurance Brokers (3.0%). This data is shown in Graphic 2
overleaf. In addition to the online aggregators mentioned above, Towergate also works with the RAC and
several trade associations, notably the Federation of Small Businesses.
"Affinity and partnership marketing can require detailed knowledge of an industry sector, and RK Harrison
works with several trade associations where it has this expertise" concludes David Parry. "The other
approach is to handle a high volume of small businesses, which is the strength of Simply Business.
Towergate is exceptional because it combines both of these approaches, for example acting as broker for
members of the United Kingdom Home Care Association and for customers of Confused.com".
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Media contact: Roberto Napolitano, +44 (0)20 3008 4406, rnapolitano@finaccord.com
Finaccord is a market research, publishing and consulting company specialising in financial services. It
provides its clients with insight into and information about major issues in financial services in the UK,
Europe and globally, with a particular focus on marketing and distribution topics such as affinity marketing,
bancassurance and strategic alliances. Finaccord's research titled Affinity and Partnership Marketing in UK
Commercial Non-Life Insurance covers the distribution of commercial liability, motor, property, professional
indemnity and specialised insurance by 1,320 organisations. It is one of a series of reports, with other titles
concentrating on personal non-life insurance, life insurance, retirement products and financial advice, plus
payment cards and consumer finance.
Sample graphics from the research, showing respectively penetration by category of partners and broker
share of product relationships of affinity and partnership marketing schemes for commercial non-life
insurance.

3. Graphic 1: Affinity and partnership marketing
schemes for commercial non-life insurance:
provision rate by category of partner
Banks, building societies and lenders 18.1%
Lif estyle organisations 41.9%
Online aggregators / brokers 70.0%
Other 11.7%
Prof essional associations 53.2%
Sports organisations 84.2%
Trade associations 43.3%
Trade unions 30.5%
Average 40.5%
0% 20% 40% 60% 80% 100%
Source: Finaccord PartnerBASE

4. Graphic 2: Affinity and partnership marketing
schemes for commercial non-life insurance:
broker share of product relationships
Towergate, 8.9% RK Harrison,
4.0%
Bluef in, 3.3%
Giles Insurance
Brokers, 3.0%
The Insurance
Partnership,
2.6%
Perkins Slade,
2.5%
Jelf , 2.1%
T.H. March, 1.9%
other, 71.5%
Source: Finaccord PartnerBASE