Insurance Marketing Uncovered: an interview with GoCompare and a leading marketer

Many of you have read the Insurance Aggregators Uncovered post where we saw Hayley Parsons (Managing Director of GoCompare.com) and Andrew Akerman (Company Director of a leading insurance marketing company) sharing their views on the issues surrounding insurance aggregators. A few points have developed in other posts but it’s time to move on …to marketing insurance brands.

Andrew’s expertise in this field should shine through as this is his day job, whilst Hayley obviously has the foundation of working with various brokers, not to mention building the Confused brand we all know and love(!).

…current aggregators quite honestly don’t understand insurance…

…the brokers are being left behind and I see this gap getting bigger and bigger…

…we bust more balls than they do, to be honest…

You mentioned that you’re looking to launch into television advertising this year. Obviously insurance is a noisy, historically price-driven market. How will aggregators be able to differentiate themselves from the insurance brands and competitors?

Hayley: You tell me! Customers using our service are invariably price driven, but we have tried to emphasise to the customer, within the TV ad, that we don’t only compare on price. We apply a unique star rating system to each policy, which is based on the options the customer selects. In the near future, we will also provide the customer with the ability to compare the specific benefits each policy has to offer.

Andrew: The question should probably be how can insurers differentiate themselves from aggregators. But that’s a paid for answer!

Insiders View: Andrew’s boxing clever to start with. Talk like that will make you a lot of money one day!!

The age old debate of brand awareness spend against results …as you launch, are you committing yourself to a loss whilst you build brand awareness or will you be striving for instant ROI?

Hayley: Marketing has sure moved on since we launched Confused.com, unfortunately we will need to burn a whole load of cash before we see any ROI – we’ve built the system, we have the infrastructure in place and now we need to spend the cash and not bottle it!

We don’t have the luxury this time around of being owned by an insurance company, we do however have the luxury of being in complete control of our own business and we very much have the passion in our hearts to give it our best shot – keep your fingers crossed for us.

Andrew: Depends on your model. With the Internet, you may take a loss but not for too long. If you have a brand, Tesco, then you shouldn’t take any hit at all. If you are starting from nothing then careful pay-per-click management can mitigate your costs.

Insiders View: It came as no surprise that shortly after we received Hayley’s response to our questions, the annoucement was made that Esure have granted GoCompare a 30m marketing loan – which converts into a stake if GoCompare cannot repay the loan. Keep spending that cash Hayley! Andrew provides us with the textbook response.

The customer buying process for insurance will usually start out with negative preconceptions. How much do you think insurance marketing is hampered by the very nature of the product? What can GoCompare do to overcome this?

Andrew: We don’t sell insurance so the question doesn’t apply to us. But I go back to my premise from before. The ideal customer is someone who pays a reasonable price and stays with the insurer for a long time. But the way the marketing is set up, specific price and promotion, is all about acquisition, no one worries what drops out of the bottom of the bucket as long as stuff keeps pouring in the top. This goes all the way up the organisation to the very top with bonuses being paid on number of enquiries or numbers of conversions. The problem is not with the product, the problem is in the way that companies set this up. There is an easy way to resolve this, but it requires a change from the top down, because volume of sales will drop for a while, but profit will grow.

Hayley: Lets be fair, it’s a begrudging purchase and it’s boring! I’m not convinced anyone can overcome it completely. We can certainly take a lot of the pain away from searching and we are very much fighting to make the acceptance process better. Some insurers have a good process (just one page to complete) and others, particularly insurance brokers have a much longer and more difficult acceptance process. The poor broker is restricted by its software house, in terms of functionality and speed of delivery.

Direct writers are getting better and better in this area, but the brokers are being left behind and I see this gap getting bigger and bigger between brokers and directs …what are brokers doing about mid terms adjustments (MTAs)), renewal online, online certificates and documentation? I’m going into a whole new subject here, maybe another topic for you to explore …broker software houses holding back the insurance broker.

Do you think the insurance industry can learn from personal finance brands in other markets? If so, who would highlight as good/bad examples?

Hayley: I think Tesco has done a fantastic job, I think the whole industry is extremely poor at cross sell, except for maybe Tesco. Yes, I certainly think that insurers can learn from personal finance brands and from banks in the manipulation of databases and cross sell.

Insiders View: You won’t be praising them in a few months time when you find tescocompare.com stealing your traffic!

Andrew: No, I think it is the other way round. GI is leading.

The comparison markets are predicted to grow over the coming months and years. How do you think the direct and broker brands will react to this shift?

Hayley: The shift has already happened and they have no choice but to embrace it and manage it.

We have strong partnerships with all our insurers and our relationships need to work for both parties. Whilst I see brokers and directs becoming more reliant on aggregators, I do hope they will not let the current big players (Confused & MS) carry on with their arrogance and bullying. Current aggregators are only interested in their own needs and they are squeezing insurers as much as they can.

Andrew: There are three key criteria you can play with – quality, service and price. Aggregators are strong on price, that means you can look to become excellent sat the other two elements.

Social media is an infant marketplace at the moment but many predict it to grow. Do you see this having an impact on the insurance market?

Hayley: Yes I do see it having an impact, however this is not really my area of expertise – I’ll ask Bart our head of marketing to comment on this question.

Insiders View: Time to step forward Bart! We’re all ears.

Andrew: Yes. Just as CIS are perceived as an ethical company (with high prices unfortunately), somebody will step in with a similar proposition and competitive prices. Give the consumer a decent price and a real reason to switch and you may just have something because loyalty then kicks in. Be interesting to see how www.ibuyeco.co.uk gets on in the motor market.

Insiders View: Not really what we had in mind by social media but we see where you’re coming from. Interesting you raised the ibuyeco.co.uk brand. Are they simply another Budget rebrand which deserve to rot or will they deliver something good for the customer. We’re happy for other people to pay more for their insurance, as long as the insurer actually delivers on their promise to reduce the carbon footprint.

The GoCompare brand in itself appears to be generic enough to venture into other personal finance products. Should the likes of uSwitch be looking over their shoulder?

Hayley: We are insurance people and we understand insurance! Current aggregators quite honestly don’t understand insurance and they are forever making up stories to get in the press which are just not true!

I saw Confused.com giving a TV interview last week and they commented that Kwik-fit insurance services give free MOTs – which simply wasn’t true! But the consumer doesn’t know this!

We purposely set Gocompare.com up so that it could venture into other areas if need be, but at the moment we plan to stick with what we know and understand and that’s insurance and we’ll do our best to provide our customers with an informed choice and a simple service.

Are you expecting the majority of the insurance brands in the UK to take heed of the FSA warnings about message accuracy? Are they threatened by this? Or do they all think they’re big enough and ugly enough to get away with it whilst simply wanting to draw in as much volume as possible?

Andrew: As the main supplier of independent ‘save up to’ messages in the UK, we work closely with the FSA and drum this into our clients. We won’t provide any price claims or messages that do not comply and endeavour to talk clients out of anything that may be in the slightest bit suspect. However, there are major players who continue to cock a snook and we feel the FSA should be harder on them. We bust more balls than they do, to be honest.

Insiders View: We’ll leave you all with busted balls!