Insurance has long been a collaborative industry—its sophisticated supply chain requires that insurers and reinsurers, brokers and agents, outsourced service providers, and other players all work together. In recent years, however, insurance companies as different as Nationwide, USAA, and Direct General have taken business-to-business collaboration to a new stage by forging strategic alliances, long-term outsourcing relationships, affinity partnerships, and other sorts of formalized collaborative arrangements.

“Partnership gives you flexibility to scale or downsize, to use your resources more effectively, and to focus on that which you do best,” said Jan Twombly, who serves on the board of the Association of Strategic Alliance Professionals and is president of The Rhythm of Business, a consulting firm specializing in strategic alliances and collaboration. “It also gives you great flexibility in enhancing your offering to customers—expanding the services you can provide, doing something a competitor can't do such as faster turnaround time, or exploiting new technologies and channels such as social media.” Benefits can include faster time-to-market with reduced investment, because “with a partner, you don't have to invest in developing that technical capability yourself.”

Partnering among insurance companies can help a carrier offer a broader range of services and increase its “share-of-wallet” from existing customers—an opportune way to grow profits and revenue from your book of business, in a soft or hard market. “USAA is a master of this,” Twombly said. “They have relationships with other insurance companies to provide, say, motorcycle or RV insurance and other specialized services, when it doesn't make sense for a company as large as USAA to have specialization in those areas.” In other cases, companies such as Direct General have integrated partnering with affinity marketing and social media strategies—working with supermarkets, title stores, and other firms to market complementary insurance services.