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Ancillary insurance products might not be the first thing to come to mind if you’re looking to diversify your product offering to manage customer needs and drive additional revenue, but with increased focus on fair value and customer outcomes, if sold and promoted correctly, these relatively low-cost but benefit-strong add-ons might be just the thing ambitious insurance distributors should be exploring.

Add-on products have developed a bit of a sticky reputation in years gone by. For a time ‘add-on’ was a by-word for mis-selling or a crude commission generator without any attention to customer outcomes; but things have changed. Ancillary insurance providers have worked hard to ensure their products deliver tangible value to customers and that the benefits can be easily explained at point of sale by introducing measures to ensure transparency and openness, so customers know exactly what they’re getting and how they can benefit.

A focus on value

The FCA has played a major role in ensuring providers focus on fair value and customer outcomes in recent years. The introduction of Fair Value Assessments and Consumer Duty, for example, have rightly led to a large-scale review of insurance products, resulting in improved transparency of value or in some circumstances adapting or even removing products from sale altogether.

Arc Legal wholeheartedly subscribe to these measures and have taken our responsibilities to our own distribution partners and end-customers seriously. We have developed a clear, evidence metric-based framework to assess the value of each of our products and services and the results are excellent. Our distribution and capacity partners were impressed with the comprehensive work we carried out to ensure we not only demonstrate, but also evidence that the add-on products we provide represent excellent value to our distributor’s customers.

Our approach to value also extends to the capacity providers we select. Though we see some in the market being tempted by the lower costs associated with using unrated paper, we believe the risk this represents to customers far outweighs the benefits, especially in the volume-based ancillary market.

The ancillary benefit

As a relatively low-cost add-on to a primary insurance product, ancillary insurance can include Home Emergency assistance, Personal and Commercial Legal Expenses Insurance (LEI), Landlord Rent Guarantee, Motor Breakdown, Key Protection, Excess Insurance and Replacement Vehicle products which represent great value.

For insurance intermediaries, ancillary products can provide an additional source of revenue and an opportunity to demonstrate real understanding of the challenges facing their customers.

For MGAs and Insurers, they can also benefit from opportunities to cross-sell or even embed ancillary products to add value to their proposition to partners and customers, demonstrating a holistic service that can support customers in an increased range of circumstances.

Ancillary products also give customers the benefit of peace of mind. In the current cost-of-living crisis, it’s becoming more difficult to access affordable access to justice when involved in unexpected legal disputes or find affordable engineers to handle home emergencies or motor breakdowns. Even the inclusion of 24/7 Legal Helplines and an online Legal Assistance Portal can offer untold comfort and reassurance to customers.

Customers are rightly demanding greater value in all areas of their lives. Battling economic uncertainty and financial pressures, it’s only right they see the value of their purchases, whether material goods or financial services. And when it comes to insurance, I believe the often-overlooked ancillary add-on marketplace is an excellent example of a product that continues to support partners and customers and provides excellent value in a wide range of situations, as well as driving additional benefits throughout the distribution chain.

Tim Mullin, Director of Product Governance & Insurer Strategy, Arc Legal Group

For further information on the above, or details of our products and services, please contact your Partnerships Manager or email

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