Qantas is adding car insurance to the ever-expanding wing of its loyalty arm, and home insurance will follow next year as the airline continues to transform its frequent flyer division into a financial services machine.
The Qantas Car Insurance platform, underwritten by specialist Auto & Genera, will offer comprehensive, third-party property, fire and theft coverage – with the lure of Qantas frequent flyer points to bait the hook in what's often considered a commodity market.
There'll be a sign-up bounty of up to 20,000 Qantas Points, with one point for dollar spent on their premium and up to 6,000 Qantas Points "when members complete tasks that will help keep them and their vehicle safer, via the Qantas Wellbeing app."
These "car safety challenges" will include checking the air pressure in their tyres and their brake pressure, and when the car is serviced.
“The power of Qantas Points to influence purchasing decisions has seen us expand into new areas including financial services and insurance," says Qantas Group CEO Alan Joyce. "These are competitive products that have the added benefit of earning points, and we’ve seen that work well with health insurance and credit cards. We expect Qantas Car Insurance to be popular for the same reason."
Baiting the hook with Qantas Points
Analyst firm IBISworld estimates Australia's annual motor vehicle insurance market to be worth a staggering $21 billion per year, with the four largest players – Allianz Australia, IAG (which underwrites NRMA), QBE Insurance and Suncorp – accounting for 64.4% of industry revenue.
Qantas hopes to be able to peel off a decent slice of that market by promoting car insurance to the 13 million members of its frequent flyer scheme.
"We've got zero percent of that market today, so it's a growth market (for us) and we have the opportunity to take share there," Joyce told Executive Traveller on the sidelines of the Qantas Car Insurtance launch.
The Qantas Insurance portfolio already includes health insurance, life insurance and travel insurance, and the airline has confirmed it's seeking to add home insurance in 2020.
Qantas Loyalty raked in record pre-tax earnings of $374 million in the 2019 financial year, compared to the $285 million pre-tax take of Qantas' international flights – proof that the airline's non-flying arm punches well above its weight. Indeed, Joyce tells Executive Traveller that by 2022 he expects Qantas Loyalty "to get to $500-600 million in earnings."
Up next: earn Qantas Points at the BP petrol pump
From early 2020 motorists will also be able to earn Qantas Points when filling up their tank at BP service stations, with the petrol giant's new BP Rewards program ousting Virgin Australia for Qantas as its airline points partner.
Drivers will be able to choose to earn BP Rewards points, which can be applied as a cash discount at BP outlets, or to earn Qantas Points directly.
While Australian earning rates have yet to be revealed, BP's rates in the UK are set at one BP Reward Point per litre of Regular fuel and two BP Reward Points per litre of Ultimate fuel, plus one BP Reward Point for every additional £1 spent on goods at the outlet. As a reference point, the 'exchange rate' in BP's UK scheme sees 200 points redeemed as £1.
“Drivers spend thousands of dollars on fuel each year," says Qantas Loyalty CEO Olivia Wirth. "Our partnership with BP is an easy way for frequent flyers to earn points and get closer to their dream trip."
Qantas frequent flyer members will continue to earn points at Caltex service stations via the Woolworths Everyday Rewards program.