Ageas’ deal with Sainsbury’s will increase the insurer’s access to customers, as the supermarket holds a similar market share to Ageas according to findings from GlobalData. Ageas was added to Sainsbury’s Banks’s panel of insurers in August 2021, which could help it break into the top 10 insurers in the UK market.
GlobalData’s 2020 UK Insurance Consumer Survey found that Ageas was the 17th largest motor insurer in the UK in 2020, with a share of 1.0% of the total personal motor market. Sainsbury’s held a share of 0.8% in 2020, meaning this deal will give Ageas access to a customer base almost as large as its own.
One concern for Ageas is that consumers are moving away from the affinity purchasing channel according to the same survey. The channel’s share fell slightly from 3.6% in 2019 to 3.3% in 2020. However, Sainsbury’s is a big, trusted brand, and is therefore more likely to maintain its share.
The defining issue will be whether consumers continue to move away from the affinity channel as a result of COVID-19. Our data suggests this is unlikely, as in 2020 the affinity space saw more digital purchases than any other channel bar price comparison websites. 47.4% of customers who purchased motor insurance through an affinity did so online, which was even higher than the direct channel (which stood at 46.3%).
This suggests consumers are comfortable buying insurance online from non-traditional insurers such as Sainsbury’s. This in turn means the digitalisation seen as a result of the pandemic should not harm the affinity channel.
In May, Ageas UK completed divestiture of its 50.1% stake in Tesco Underwriting to Tesco Bank for a total of £123m. The transaction includes a £21m internal loan reimbursement to Ageas.