Starling Bank and its influence as an insurance distributor continues to grow. In June 2019 it launched its first partnership with an established player after pairing with Direct Line’s Churchill brand. The agreement will see Direct Line Churchill home insurance policies sold and managed through Starling’s marketplace on its app, similar to the arrangements the bank has in place with travel insurance startup KASKO and life insurance start-up Anorak.
Starling has found itself at the forefront of activity in the traditionally slow-moving bancassurance channel. Incumbent banks have an incredibly large customer base to upsell to, so it is less essential for new players to be proactive within this space. Creating a marketplace means Starling’s customers can purchase and manage multiple insurance products within the bank’s app.
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This level of convenience is bound to be appealing to consumers. Direct Line is the biggest home insurer in the UK with a market share of 11.9% in 2017, so this is a significant partnership for Starling Bank. As such, it represents a departure from its previous strategy of teaming with up-and-coming insurers.
It is also the first link-up between a challenger bank and an established insurer, and it suggests that incumbents are looking towards alternate and more innovative distribution strategies.
The bank disclosed that it had 460,000 personal current accounts at the start of 2019, which is fewer than rivals Monzo and Revolut but still a significant number for Churchill to have direct access to. While it does not disclose data on the age of its customers, challenger banks are likely to appeal to younger generations – a demographic all insurers are striving to attract.
Targeting these consumers has mainly been focused around offering quick quotes digitally. For example, start-up Homelyfe promises to provide quotes in 90 seconds, while Aviva Plus asks fewer questions and requires payments on a monthly subscription basis. Although there is no indication Churchill’s home policies will be innovative, offering them via a challenger bank’s app is a step forward and should help it connect with younger, digitally-savvy customers.
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