Naughty, Naughty Insurance Advertisers

Somebody stole my thunder! Here I was planning a big, groundbreaking insurance blog piece about the ethics of insurance advertisers, only to find something similar hitting the headlines before I could move the mouse over to the ‘post’ button. It seems as though ethics have finally caught up with the insurance industry. The problem is, the ethics police are three foot tall, wear pink dresses and talk with a camp lisp. Ladies and gentlemen, I give you the Financial Services Authority (FSA)!

Negative Apathy

So the story goes that car insurance companies have been warned gently tapped on the wrist by the FSA over the messages and content within their advertising communications. The watchdog (apt name as all they do is watch) has said that it is concerned about misleading offers and messages in insurance adverts. HELLO! Have they only just noticed.

They’re obviously talking about the old fashioned “save £200″ style messaging which has been in use since the year dot. Historically, this approach has seemed to work well in a market where customers have such strong feelings of “negative apathy” towards a product they buy every year and spend a significant sum on it.

The startling news (probably only to the FSA) is that over half of the entire B2C insurance industry are putting out misleading or false communications! Over half! …don’t worry Mr and Mrs Cruise-Goers, just over half the ship will fill up with water on your annual trip this year. We’re not going to tell you which half though and we’re not going to do anything to stop the water coming in. We hope you enjoy your trip – that’ll be five hundred pounds each please.

Caveat Offers

It reminds me of an anecdote I once heard about a Barclays Bank Branch Manager. He got really frustrated about receiving display material from his marketing bods which displayed an inviting message followed by the obligatory caveat* (inserted by an anal legal/compliance team, no doubt). So, he took it upon himself to write his own material with a clear message of:

“Get a free, crisp £50 note for simply walking up to the counter*”.

The key inclusion here obviously being the caveat. However, in his small print he wrote:

“The offer of a free, crisp £50 note is very much a real offer and you do not need to do anything or give up anything to qualify for this offer. Simply walk up to the counter and ask for your £50 note”.

How many people do you think actually walked up to the counter? You’re right – exactly none! Point proven Mr Barclays Bank Man. Having said that, it has been good to see that (despite the quality of advertising not improving that much) insurers and their agencies are starting to profile customers from the first point of contact – the above-the-line campaign. Direct Line are pushing their added value whilst Churchill, Esure and Privilege are pushing their no claims bonus profile before they throw any cashback and other money incentives. Still, with those brands you still feel as though they’re rounding up the masses, passing you through their insurance profile sieve.

If insurers move away from these tactics, they’ll be afraid of not having enough ‘pull’ to run the volumes through their quote engines. The individual decision-makers would also be looking over their shoulder as their job will no doubt rely on the figures: “How do these figures compare to last year” and “How far is that from the forecast figures”.

However, there’s something to be said for giving it to people straight. Being honest. Building trust. There’s definitely a thought for appreciation for any insurer who says things like: “You might save money with us, you may not. For a lot of people it’ll mean a substantial saving, for others a smaller saving and for a few people we won’t be able to match a quote they’ve had elsewhere“. I’ve only found one so far (also discussing this topic) and I doubt there are many more like this.

FSA Warning

So what are the pitbulls of the insurance world doing about the misleading caveats and messages? Put it this way – if you swindle people out money on in a retail environment such as eBay, they send in the Feds. If you operate an investment scheme fraud operation, you get sent down for a few years of buggery, courtesy of Her Majesty. If you lie about your offer in an insurance advertising campaign to drawing money out of people for a product they legally have to buy, you get the limp wristed industry “watchdog” knocking on your door (or sending a polite email) giving you three months to correct your naughty little mistake.

Shape up FSA. Clamp down and clamp down hard! You must; simply to restore a little bit of trust in the insurance industry. At the moment, you’re heading down the route previously taken by the loans industry, pension schemes and Jeffrey Archer! You’re lining up alongside Seb Coe and Ken Livingstone in the queue for the number 47 bus to Buggeringly-Annoying-Untrustworthy-Ville!

And One More Thing

If you do take your head out of the sand and take a look around, I’m sure you’ll find a few startling discoveries – like Compare The Market. It’s in the name for Christ’s sake …but I guess “Compare The Insurers On Budget’s Broker Panel With A Couple Of Other Desperate For Leads Brands Thrown In” doesn’t have the same ring to it. How can someone brand a company, tool or service “Compare The Market” when you don’t actually compare the frigging market! I think that’s another post for this insurance blog right there.

* We don’t believe in caveats. If you feel you have to use one, you probably don’t have a real offer or you’re simply lying!