A drive by Swiss-owned insurer Zurich to sell policies through retailers and utility companies will increasingly sideline brokers.
Zurich Strategic Partnerships (ZSP), a company formed last year to strike deals with retailers and utilities, says corporate partnership deals will expand rapidly from around 4% of the £23bn general insurance market to 12% over the next four years.
Head of marketing for Zurich's corporate partnership division, Paul Shearman, said the company was preparing an aggressive assault on the market by signing deals with supermarket groups and utility companies to distribute Zurich's household, motor and other insurance products.
He said Zurich had been forced to review its position over the past 18 months, as its market share and profit margins eroded.
The main losers from the expansion of the corporate partnerships sector are likely to be insurance brokers and direct writers, Shearman says.
The Leeds-based division of 300 staff was formed last year by the merger of Zurich's home and overseas travel insurer and its “white label” division, which provides unbranded products for banks and other business partners.
ZSP has invested £5m in the division, including new technology such as an internet site that can supply up-to-date information on claims costs to corporate partners.
Among the companies ZSP has been working with are Centrica, AA, Bank of Ireland and the Woolwich.
Shearman said ZSP was targeting two major client areas: insurance brokers of financial institutions and what he calls brand extenders – organisations whose core business is not insurance but that have a large customer base.
Retailers and utilities have the advantage of frequent contact with customers and hold significant amounts of information on them from such marketing tools as loyalty cards.
Shearman explained: “Financial institutions such as insurers are keen to strike partnerships with retail organisations as it increases their opportunities for cross-selling and retaining customer loyalty.”
“They have realised they need to become more than just savings and loans or insurance companies.”
On the other hand, he said retailers were interested in closer ties with general insurers, as it enabled them to develop a deeper and longer-term relationship with their customers.
Shearman said: “We are looking for long-term relationships with corporate partners whereby our insurance interests become intertwined.”