Affinity insurance: an under-exploited growth driver

In a tense economic climate, distributors are continually looking for additional sources of revenue. Affinity insurance is often overlooked or misunderstood by mass-market players, but it represents a significant opportunity.

The affinity sector is growing by around 7-10% a year, depending on the specific segment and the studies available (Xerfi, FG2A, Allied Market Research).

It's a niche market that's bigger than it looks - €5 billion in France and around €50 billion in Europe - and some types of product are even seeing double-digit growth (cyber, mobility, etc.).

To understand the challenges and prospects offered by affinity insurance in 2025 (and the years to come), we spoke to Etienne Longeaud, Sales Director at Seyna, whose expertise sheds valuable light on affinity insurance trends.

Let's take a look at how affinity insurance is gradually transforming the relationship between distributors, brokers and insurers.

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A growing niche market

To speak the same language, let's clarify. Affinity insurance is characterised by its ability to be integrated into a more global purchasing path or as a complement to a main service.

This insurance stands out for its highly targeted coverage, unlike general insurance policies, which are sold separately.

For example, this could be insurance for the breakdown or breakage of a smartphone taken out online at the time of purchase, or an extended warranty for a washing machine bought in a shop.

Affinity insurance already enjoys strong support from French consumers: according to a 2022 FG2A/CSA study, 81% have already taken out affinity cover.

However, a paradox persists: despite this massive take-up, 50% of consumers say they are not very familiar with these products.

This lack of knowledge gives rise to specific expectations: 59% want greater transparency on conditions and exclusions, and are demanding simplified and digitised processes, with immediate underwriting and proactive claims management.

Although all the studies predict an increase in market share, the size and precise development of this market are difficult to assess accurately because of the diversity of definitions and products it encompasses.

Étienne explains the difficulty: "This is a market for which you don't have much data, so it's very difficult to make an accurate estimate. Growth rates can vary significantly depending on the specific segment, such as cancellations, animal health or multimedia equipment breakdowns".

The particularity of this niche segment lies in its value proposition for distributors: unlike other branches of insurance, which are perceived as cost centres, affinity insurance represents a source of additional income. This fundamental characteristic explains the growing attraction of this market.

Etienne explains: "Having been a health broker, I know that a supplementary health insurance policy, even a very useful one, categorises you as a cost centre. Affinity insurance is the opposite: generally speaking, it directly creates value and sales for distributors. This completely changes the way insurance is perceived".

Affinity insurance also stands out for its ability to innovate rapidly, thanks to its flexibility in three areas: product design, customer experience and business models.

To illustrate this potential, Etienne mentions the travel sector: "A major travel distribution group can develop a virtuous insurance offer for the end consumer while generating, via distribution commissions, additional sales to its core business. Insurance can also be perceived by the end customer as a service with real added value".

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Several segments are currently showing particular dynamism:

• Breakdown, break-in and theft: This is the first dynamic segment, covering all goods likely to break down, break or be stolen (B2C and B2B). Consumer electronics is driving this growth because of the size of the market. However, new ‘sub-trends’ have recently emerged, such as the circular economy, which favours rental insurance, and ‘soft mobility’, even if profitability remains tricky.
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• Pet health: This is a fast-growing segment, attracting both generalists looking to diversify and specialists. Although on the fringes of the affinity sector, it is linked to the increasingly popular distribution via pet shops and veterinary prescribers. According to the article ‘Santé animale : 30 millions d'amis’ (Animal health: 30 million friends) in L'Actuariel (04/2025), France's potential remains significant: our equipment rate is still low (8% for dogs and 4% for cats) compared with our British (35%) and Scandinavian (80%) neighbours.
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• Travel and leisure: A historic segment that is maintaining its performance. Post-Covid, global tourism development and the expected growth in air traffic between now and 2030 are underpinning this dynamic.

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Distributor - broker - insurer: the winning trio?

Affinity insurance is redefining the traditional relationships between players in the sector. In Etienne's view, the historical model, in which the broker was the exclusive intermediary between insurer and distributor, is evolving towards a more collaborative configuration.

"The model in which the broker is the distributor's sole contact is gradually becoming a thing of the past. The most effective approach is now based on a three-way collaboration between broker, insurer and distributor, each making their own specific contribution", he says.

This synergy optimises value creation by capitalising on the distinctive skills of each player:

• The distributor contributes its in-depth knowledge of its market and its end customers.
• The broker adds value to the partnership through its proximity to the distributor, its knowledge of the various affinity programmes and, more generally, through its claims management.
• The insurer contributes its expertise in risk, data analysis and reinsurance.

"Collaboration in which each party at Seyna makes its own contribution, for example through working groups aimed at creating more value for the end policyholder, is the most effective model", sums up Etienne.

This collaboration is now underpinned by instant reporting tools and joint risk committees, providing greater transparency across the entire value chain. Distributors are expressing a growing need for visibility on the economic balance of programmes, requiring fluid communication between all players.

This trend is particularly evident among the major distributors, who have developed significant in-house insurance expertise. "The level of expertise and the size of the teams dedicated to insurance at some major distributors are remarkable", observes Etienne.

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Technology: the key to success

But this growth dynamic can only be achieved if certain fundamental issues are mastered.

"Spontaneously I see two very important issues: data and technology. And I'm not talking about buzzwords that are reused over and over again. With affinity, we need to get away from the price war. And the big winners will be those who exploit the data correctly and have effective technology" analyses Etienne.

Let's decipher. The initial objective is to create value for the end customer and the distributor. The challenge, therefore, is to identify what really creates value for policyholders, to be able to monitor performance accurately and to ensure the economic viability of the programme.

To do this, on the data side, the insurer needs to obtain the broker's slips quickly, without error, and containing the right information.

This is a crucial factor in breaking the vicious circle that traps many insurers. When faced with a rising claims experience, the traditional reflex is to raise rates, then raise them again when the drift persists.

This value-destroying spiral makes little sense, as it only retains bad risks and drives policyholders away. The only solution lies in making intelligent use of the data: macro-analysis is no longer enough, we need to develop the ability to carry out granular analyses, to zoom in by profile, by shop, by department.

Etienne explains: "I'm not saying that we'll never raise prices. But you have to understand the data. This detailed approach to the claims/premiums ratio enables us to identify the real levers for optimisation, rather than systematically resorting to rate increases".

In terms of technology, three issues stand out:

• The ability to retrieve, process and analyse data efficiently, as described above.
• Efficient management, which is key to the policyholder experience.
• Optimising both physical (in-store) and digital (online) purchasing paths, to increase subscription rates and improve transparency for policyholders.

The question then arises: how can it be integrated into the heart of its strategy?

Insurers who want to stand out from the crowd, like Seyna, are investing heavily in technology that enables them to exploit data and analyse the performance of insurance portfolios in detail.

Etienne explains: "Our aim is to launch insurance products as quickly as possible, even if the first version is simple. We know that it's very unlikely to launch the perfect offering the first time, so the idea is to launch quickly to get feedback from the market as soon as possible and continually improve the offering based on the data".

For retailers, seamless integration into the purchasing process is one of the major challenges of affinity insurance. This "on-board insurance" represents a considerable technical challenge that few players have fully mastered.

Etienne illustrates this complexity with a concrete example: "A player like CDiscount has developed a particularly effective feature: when you buy a smartphone on their platform, you simply tick a box to add insurance against breakage or theft for an extra three euros a month. This apparent simplicity conceals a considerable technical complexity that few players are capable of reproducing easily".

The constant pressure on commercial margins and the complex prediction of the frequency and cost of claims are additional challenges. In response, innovative players are developing API-fication solutions that enable distributors to easily integrate affinity products into their digital offering, as well as fully digitised customer journeys, from immediate underwriting to simplified claims management.

The technological debt of established players is often a major obstacle to innovation. "Even large e-commerce companies, which have gone beyond the start-up stage without being a fifty-year-old organisation, have accumulated a technological debt such that the integration of a simple insurance functionality represents a development project that can extend over 18 months".

This technical constraint has a direct impact on innovation capacity and responsiveness to market changes. "Extending a product's development time not only increases costs, but also exposes it to the risk that market needs may have changed between the initial design and the actual launch of the product", stresses Etienne.

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Should you go for it or not?

There are two possible answers to this question.

Before taking the plunge, we need to look at the limits. Despite its potential, affinity insurance still faces a number of obstacles limiting its expansion:

1. Distributors' strategic priorities: Although insurance is a source of additional income, it generally remains an ancillary activity for distributors. In a demanding economic environment, where profitability, growth and competitiveness are top priorities, insurance is often one of the first areas to be relegated to second place.
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2. Regulatory complexity: The regulatory environment is becoming progressively more restrictive, particularly with regard to the protection of personal data (RGPD), the Insurance Distribution Directive (DDA) and transparency obligations relating to products and the way they are distributed.
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3. Access to relevant data: One of the major technical challenges is obtaining quality data, both during the initial design of a programme and during its operation.

Despite these challenges, the outlook remains promising.

Affinity insurance is gradually being democratised, becoming accessible to players of all sizes. "This market is not the preserve of the big corporations", says Etienne Longeaud, citing the example of new banks such as Shine which, despite their modest size, have rapidly integrated affinity cover into their offerings.

Intermediate-sized brokers are also developing solutions tailored to smaller distributors, in particular through "open groups" that enable risks to be effectively pooled. "A growing number of mid-sized brokers are now offering open group products that can be adapted to the specific needs of smaller distributors".

Other trends are also emerging in this dynamic market, as Etienne points out: "Refurbished items represent an emerging segment driven by players such as BackMarket, reflecting the growing interest in the circular economy. At the same time, we are seeing the development of one-off micro-insurances covering, for example, a single journey or a short-term rental, responding to the needs of a more flexible and occasional consumer".

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Conclusion: strategic potential to be exploited

Business model evolution, embedded insurance, API-fication, performance-based commissions, dynamic pricing, and automated claims management, there are many levers available to unlock the full value of affinity insurance programs.

One thing is clear: affinity insurance remains an underexploited growth driver, gradually transforming relationships across the insurance value chain. Its ability to generate additional revenue for distributors, combined with technological advancements and shifting consumer expectations, makes it a strategic segment for the industry's future.

As Etienne summarizes: “Seyna’s core mission is to become the most efficient insurer for brokers. This efficiency lies in a combination of expertise and technology that enables brokers to launch their products on the market as quickly as possible”.

This approach, blending expertise with tech, illustrates the direction affinity insurance is taking: toward deeper collaboration, smoother integration within purchasing journeys, and a stronger focus on optimizing value across the chain.

The future growth of this segment will depend on the ability of the distributor / broker / insurer trio to overcome the obstacles mentioned above, while striking the right balance between ease of access for the insured and relevance of coverage offered.

“My dream is the implementation of a unified data standard between insurers, distributors, and claims managers to streamline communication and speed up operations”, concludes Etienne.

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