Affinity schemes on the rise as brokers dominate

Affinity schemes are on the rise, with 42% of potential organisations already partnering with brokers or underwriters to offer policies, up from 40.5% two years ago, according to market research consultants Finaccord.

Out of 1,280 organisations who are actual or potential partners with insurers or brokers, including professional and trade associations, financial institutions and sports bodies, 42% offer at least one type of non-life insurance to their members or customers, Finaccord found.

Among professional associations, 63.1% offered affinity schemes, while 45.8% of trade associations had at least one scheme up and running.

“These results indicate that commercial lines affinity programs are continuing to expand,” said Finaccord consultant Claire Fetherstonhaugh.

A similar study in 2013 found a 40.5% overall involvement rate, including 53,2% of professional associations and 43.3% of trade associations.

Brokers dominate affinity schemes, with only 8% of the 1,300 affinity products identified in the survey being run directly by insurers.

“The preferred operating model among partner organisations is for commercial lines insurance products to be arranged in conjunction with a single, external broker,” Finaccord said.

Towergate was the most active broker with a 9.4% share of the relationships, including some substantial deals such as those with the British Association for Counselling and Psychotherapy, the British Psychological Society, the Educational Institute of Scotland and the Federation of Small Businesses.

Arthur J. Gallagher came second, with a 7.7% share and Jelf third with 5.5%. The remainder was spread across 200 different brokers.

Where it was possible to identify scheme underwriters, including brokered and directly underwritten programs, Hiscox emerged as the most prolific provider with a 25.7% share of product relationships, followed by RSA with 10.2% and AXA with 7.3%.

“Hiscox performs well in this analysis because it seems to have a particular focus on the commercial affinity market”, said Fetherstonhaugh, pointing out that Hiscox share rose from only 11.5% two years ago, when it was second behind RSA.