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Redefining Affinity Partnerships in Insurance

  



Creative Ways to Share, Partner, and Collaborate for Better Outcomes

Insurance has long been touted as a relationship business, where salespeople nurture connections to source opportunities. Although that’s still true, the marketplace is changing rapidly — and so are consumers’ expectations across multiple fronts. Many consumers no longer wish to purchase insurance by traditional means. They seek a straightforward, engaging, and seamless experience, with little confusion or difficulties from beginning to end.

Innovative insurance companies have been quick to respond, using a combination of customer data, technology, and modern processes to meet consumers’ expectations at every turn. As these innovators have expanded market boundaries and stolen market share, the insurance industry has taken on a new form — and this disruption has made its way to the affinity market.

With a broader range of purchase options and greater ease in securing coverage, insurers in the affinity and program business should reconsider how, where, and when they connect and interact with younger customers. This is why strong partner ecosystems have become key in expanding the reach and presence necessary to become a factor in consumer purchase decisions, especially with nontraditional entrants like big tech and automotive companies shaking up the insurance industry even further.

Partner Ecosystems: Essential to the Future of the Affinity Market

Keeping pace can be impossible if a company tries to do everything itself. That’s not to say that technology hasn’t empowered many in the affinity market to develop and build their own digital affinity insurance solutions — solutions that drive awareness, expand reach, and secure new business. Many of these digital solutions, however, take time to perfect. They’re also not usually as intuitive or user-friendly as those coming from digital-direct insurers.

To really thrive, remain relevant, and keep pace with the competition, collaboration is critical. The core competencies of your business likely don’t fall in the digital realm, which means the next best answer would be collaborative insurance solutions. Establishing partnerships with insurance and non-insurance innovators brings your business closer to tomorrow’s customers.

Take PIMA member Gallagher Affinity, for example. Each of its products and services is branded and distributed through sponsored distribution channels, loyalty platforms, and partner endorsements, which allows the company to reach a variety of associations with its professional liability insurance, student health insurance, direct-to-consumer marketing/sponsored marketing, and non-insurance products. Without its partner ecosystem and collaborative relationships, the company wouldn’t have the reach or sales it enjoys today.

Or consider Relay, a SaaS platform that’s also a PIMA member. It equips brokers, wholesalers, and capacity providers with the leading, white-labeled electronic placement solution in both property and casualty insurance as well as facultative reinsurance, thereby helping brokers collect data faster, with 80% less data entry and 50% faster quotes.

The technological solutions needed to drive growth and carve out new markets are out there. To better secure your position in the affinity marketing space, all it takes is establishing business relationships — sometimes in the form of nontraditional partnerships.

Building a Partner Ecosystem for Tomorrow

Building a partner ecosystem to meet ever-changing consumer expectations and keep up with disruptors will take more than relationships within traditional markets. PIMA’s research with Majesco shows that many in the affinity market still rely heavily on associations (81%) and professional organizations (65%) — as well as small (65%), mid-market (58%), and large (58%) employer groups. Yet a strong partner ecosystem also incorporates emerging and nontraditional partnerships.

In fact, attention has now turned to gig economy groups (27%), service groups (19%), retail groups (15%), and health and fitness organizations (15%). Given time, these emerging markets could surpass many in the traditional affinity insurance market. Establishing nontraditional partnerships early on can place your organization in the auspicious position of improving member acquisition and increasing revenue potential for the future — well ahead of others in the space.

However, talent shortages, changing consumer expectations, and digital disruption (among other factors) have become obstacles for moving ahead in the insurance industry. Therefore, though it might sound counterintuitive, building partnerships with competitors will also play a significant role in tomorrow’s partner ecosystem.

Partnering with competitors offers opportunities to collaborate with professionals with strengths other than your own and those of your organization. You can discuss topics and organizational issues around vaccine requirements, hybrid work models, digital-direct insurers, talent sourcing, strategic planning processes, and so on. Naturally, product and distribution would be off the table in this type of nontraditional partnership. However, competitive collaboration can ultimately help develop solutions to shared problems among all and put your insurance business in a better position to innovate to fulfill consumers’ expectations.

Diversifying the Affinity Distribution Partner Network

Building partnerships outside the traditional affinity insurance market is only part of the equation. To capture a new generation of insurance customers, keep pace with acceleration, and drive sustainable growth, it’s important to overcome the insurance-centric view of your distribution partners. If your distribution partners are only your traditional partners, chances are you’re not learning or growing as much as you could.

Besides, some of the best ideas come from outside normal networks. The time has now come to diversify distribution partner networks to include those innovative companies that have taken the time to answer the question: What do consumers expect when they buy insurance products and services? They understand the unique needs and expectations of today’s digital-oriented consumers and use this information to rethink and reimagine products, services, and delivery models.

Aligning yourself with a more diversified group of distribution partners can bring you closer to the customer knowledge you need to reshape your business models, deliver on customer service, open up new distribution channels, improve speed-to-market, and meet consumers where they are. Doing anything otherwise could leave your operations lagging.

How to Build Partnerships in the Affinity Market

Building a strong partner ecosystem in the affinity market isn’t dissimilar to building partnerships in any other industry. It takes time, energy, and an agreement that the imminent arrangement will be mutually beneficial to better ensure a return on investment for all involved.

That said, there are a few things to consider as you develop a partner ecosystem strategy for your organization, including:

  1. Show up. Showing up is one of the most important aspects of building a partner ecosystem. Show up to conferences, virtual events, webinars, forums, and so on. If you don’t show up in the spaces frequented by those in the affinity market, it’s unlikely you’ll meet the decision-makers who could help you tackle the challenges in the industry. A host of potential partners is out there having meaningful conversations, making connections, building relationships, and solidifying deals, so start showing up to meet them.
  2. Be curious. Showing up is one thing. Tapping into your curiosity is another thing entirely. Explore those conversations, listen to what others in the space are saying, and above all else, start asking questions. It’s the only way to build a foundation to establish both traditional and nontraditional partnerships and set the stage to develop collaborative solutions that can respond to market changes and drive growth.
  3. Get tactical. As discussions progress between your organization and potential partners, bring tactical ideas to the table that could be advantageous to everyone. The PIMA-Majesco research found that 62% of companies are already selling products on partner platforms, adding a revenue-sharing element to the deal. To expand market reach, other companies in the industry (54%) are selling white-labeled products from another company — that, or white-labeling their own products and selling them through another provider (46%).

APIs have also grown in popularity, with 54% of companies embedding their product within another company’s products. Think Acko’s arrangement with Amazon Pay to sell insurance policies to its customers. Others (50%) are including their insurance products as part of another company’s products or services. The options are endless and should be discussed early on with potential partners to ensure the arrangement will be a good match and sustainable in the future.

As with any relationship, affinity partnerships take work to maintain. Schedule regular check-ins, take an interest in the other party’s business, and offer constructive feedback when necessary. Collaboration at this level should produce favorable outcomes for all stakeholders.

An Affinity Partner to Help Grow Partner Ecosystems

If you’re unsure how to establish traditional or nontraditional partnerships to develop collaborative solutions in insurance, PIMA is here to help. The team can provide you with the necessary information to make more informed decisions and connect with other professionals interested in creating a partner ecosystem for tomorrow. Contact us today to learn more about the benefits of a PIMA membership, including networking, peer-to-peer learning, and education opportunities.


Published on March 9, 2022.

PIMA® (Professional Insurance Marketing Association®) is a member-driven trade association focused exclusively on the group-sponsored benefits market.

 


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