Roadside assistance

We provide roadside assistance through business-to-consumer (personal Members) and business-to-business channels (business customers).

In personal Membership, fees are paid principally for breakdown cover but additional revenue is generated from cross-selling (selling other services) or up-selling (selling higher value products and services). For business customer’s fees are set either per breakdown or per vehicle and average income per customer is lower than in personal Membership.

Market share

The roadside assistance market is worth approximately £2bn per annum and we are the clear market leader with over 40% of the consumer segment. With respect to our business customers, the AA has more than 65% of the car manufacturers segment, over 60% of the UK's largest fleet and leasing customers and around half of the banking and added value account segment.

Competition

In the UK there are a small number of large players with significant market share. Competition is based on quality of service and price. Our competitors include RAC and Green Flag.

Barriers to entry are significant and include the investment required to build a trusted, highly recognised brand, the creation of a nationwide, branded fleet of qualified patrols with competitive technical ability, and the sophisticated deployment process to operate effectively. No new entrant has achieved a significant scale since the 1970s.

Customers

Personal Membership covers vehicles or individuals. Vehicle policies cover either single or multiple vehicles; personal policies cover one or more individuals including families, regardless of the vehicle they are travelling in. Entry-level products offer cover for repair or towing broken-down vehicles to a local garage if repair is not possible. This can be complemented by additional services such as:


Relay: transport for broken-down vehicles to a destination of the Member’s choice.
Homestart: repair services while vehicles are either parked at or within a prescribed distance of their home.
Stay Mobile: Replacement vehicle, transfer or accommodation services to help Members who would otherwise be stranded.

Business customers’ cover is provided by the respective partners but with services provided by the AA. These include pay-for-use and insurance based services.

Market drivers

Economic environment

Whilst our business proved remarkably stable over the economic cycle, spend on roadside assistance is discretionary. Positive momentum in the UK economy provides a solid backdrop to expand our Membership base.

Size of the car fleet

UK volumes are driven primarily by the number of privately-owned vehicles which grew at approximately 1% per annum between 2007 and 2015. Despite suffering significantly during the financial crisis, new car registrations in the UK have grown strongly in recent years with 2.3% growth in 2016.

New business customers

Winning new partners and renewals of existing contracts is a key driver of our business-to-business operations.