Marketing channels are the less glamorous and poorer ‘cousins’ of the marketing mix. However in competitive markets with growing product commoditisation marketing channels are increasingly seen as effective differentiators. The increased focus on marketing channels has also prompted searching questions about their efficiency and the numbers and quality of individual channel members. These issues have been particularly vexed in the insurance and assurance industry. This paper sets out to investigate the link between the loyalty of third party channel members and the strength of a supplying company's competitive position. Consideration is given to the inherent benefits of using third party channels. The paper suggests that all channel relationships between independent business entities are based on win-win scenarios. Consequently any company wishing to increase channel partner loyalty must start by fully understanding the needs, aspirations and drivers of their channel members. Marketing channel loyalty behaviour is then reviewed with particular attention to the satisfaction of channel needs. The basis of power found within channel relationships is also considered in some detail. The most appropriate power bases for development of channel loyalty are identified as referent and expert and recommendations are made on the type of channel loyalty behaviour that should be sought. Additionally consideration is given to which categories of channel loyalty behaviour warrant attempts at, and investment in, modification by companies. As a method of modifying channel behaviour the use of value adding services to build channel partner loyalty is considered. The paper concludes that such capability building programmes can have a positive effect upon channel loyalty and hence create sustainable competitive advantage. Using models of satisfaction / loyalty relationships, originally identified from the consumer market, the loyalty behaviour of insurance / assurance industry marketing channels is analysed. A link between the level of channel loyalty and the degree of channel member satisfaction is observed and a strong correlation with the degree of industry competition suggested. The paper also notes that dependent upon the products sold the degree of supplier loyalty can vary within a single channel member. This observation is considered to be consistent with a partially regulated market. Seven major issues surrounding the creation and maintenance of marketing channel loyalty are identified. The paper then offers some practical guidance to the solution of these issues. Research into marketing channel loyalty within the insurance and assurance industry is detailed . The findings conclude that the industry accepts a link between capability building programmes and channel loyalty but that efforts to extract advantage out of the link have to date been limited . Nevertheless, evidence of pockets of success are revealed which provide strong indicators for a successful route forward. The structure and content of capability building programmes is investigated further by the analysis of channel loyalty best practice from industries other than insurance / assurance. Finally the paper presents a framework for marketing channel loyalty development. The framework sets out six steps for building greater channel loyalty and a theoretical basis for determining the optimal level of investment in any channel loyalty programme. An overall conclusion is drawn that increased marketing channel partner loyalty is achievable via implementation of capability building programmes based on referent and expert power bases and that this increased loyalty presents a sustainable competitive advantage.