Feb

11

Say What Now Broker Boy?

Filed Under Marketing Insurance |

It’s fair to say that cultures have been shaped and changed by messages being passed down through generations, altered and embellished, resulting in something altogether …well, frankly unbelievable. In which case, I wonder what the generations to follow us will make of the marketing messages being used by the running scared brokers of today?

OK, so it’s not exactly on a par with religion but the distance between reality and truth is comparable. The bastard cousin of the comparison sector is that CompareTheMarket actually claim to compare the market - directly, implied or cleverly disguised - whilst only comparing three insurance companies when you dissolve the brands with some Cilit Bang and run them through a hot cycle. You would have thought the many regulatory big brothers who look over all of us might have done something about this by now? Not so. But they’re not the only ones.

From what I can see from the blossoming creativity (!) which is hitting our television sets and websites in the form of insurance advertising, it’s only getting worse. The main protagonists now appear to be the brokers. Running scared from the comparison revolution - more than likely. One by one, the smallest of them seem to be dwindling away into nothing. Clinging onto the odd high street shop front here and there but never really winning massive amounts of business. Those with bigger brand names appear to be stretching the truth as much as possible to entice customers into a service they simply do not provide.

The Post Office, for example (ah, the beloved Budget Group). With the use of celebrities for the endorsement value, they’ve started to use phrases in their advertising such as “we’ll shop around over XX leading insurance companies for you”. But they’re only offering the century old broker model. OK, so they offer more than one policy from more than one insurer but it’s not a comparison service and it only covers a particular proportion of the market. Looking deeper, The Post Office are also claiming to save you £209.84 on your car insurance (that 84p really does add some punch - almost makes it true!). Looking at the small print, only 10% of customers achieved this. Shocking. That’s like saying, play Arsenal and you’re going to win - well, they lose 10% of their games.

Devitt are another with their motorbike insurance offering. I recently saw an online advert in which they claimed to compare policies to find your the cheapest one. Technically speaking, the intermediaries could follow the same route if that’s the standard by which things are judged.

What makes it worse is that they’re part of the RBS Group - and we all know the stance Direct Line have taken. And so it seems, these multiple brands are simply being used as different faces to the same service, offering nothing new to the customer, no innnovation, no intelligence and certainly no creativity. They’re simply probing the boundaries to see how far they can push it …and let’s face it, such bending of truth and definition can make a huge difference to the bottom line.

As customers become wise to this (slowly/painfully/hopefully), this sort of approach should appear more like entering Dame Edna Everage into the Miss World competiton on a wild card entry! The problem is, there’s no authority in the industry or outside which is tackling this problem for fear of upsetting some of the leading insurance companies. The FSA may as well put their own advertising out their saying they compare insurance and I’ve not seen much more come from Which? than best buy tables which are immensely misleading in the insurance sector.

So who’s going to stand up for the customer in the insurance industry?

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4 Comments so far

  1. Ian Hughes on February 14, 2008 3:24 pm

    I’m not entirely sure where you are going to with this?

    The logical conclusion of your post is that everyone should strip away all of the branding and messaging. The result would be advertising that says “Insurance company number 2639: We sell car insurance, but you might be better off buying from one of our competitors.”

    The key points of this ad are that the Brand is gone (we wouldn’t want to have gimmicks like friendly red telephones or mice with American accents or elephants in a jungle). It tells the truth, they do sell car insurance, but you just might be better off buying from someone else.

    While we are at it, shouldn’t all insurance prices be the same? That way consumers won’t accidentally buy from a company that rates against their risk profile.

    In fact, let’s just get the FSA to sell insurance and do away with everything else. Nationalise the lot and be done with it.

    I understand that you believe that competitive advantage is being gained by “conning consumers”. That someone needs to stand up for consumers.

    But you haven’t actually made a constructive suggestion as to what “standing up for the consumer means”?

    Perhaps someone should start an insurance comparison engine?

    So insiders, what is a fair set of rules for consumer advertising and how would you police it?

  2. Ernest on February 14, 2008 5:36 pm

    @Ian Hughes

    Spoken like a true insurance bod!!

    To address your points, of course you wouldn’t have one rate for all, no brand variants, no advertising messages and no differentiation. What’s the word you used …”constructive”?

    Rule one: are you lying to the customer about the service you offer? Result: not allowed.

    Rule two: are you actually telling the customer something about the sort of risk profile you are set up for and serve better in comparison to the rest of the market and thus making your lead quality better from the very first point of contact? Result: allowed.

    Surely you cannot endorse any company, in any sector, misleading any customers?

    As for who polices that? Well, last year we heard rumblings of the FSA clamping down on the insurers about the accuracy of their messages (I believe Churchill and a few others had to make a few tweaks).

    They (or an equivalent authority) needs to be on top of this and keep up with market changes (not that you cannot help to have noticed the growth of the various aggregator sites). The advertising authorities are probably not even aware of the difference between an aggregator and a broker.

    I’ve heard rumblings of the aggregators across the personal finance sector forming their own conglomerate (I mean, forum) for setting guidelines and so on. But this obviously wouldn’t cover the brokers. Perhaps Biba should re-examine their recent PR campaign attacking the aggregators and take a look at their broker members?

  3. Ian on February 18, 2008 2:44 pm

    To the issue of Rule 1: “Lying about the service you offer.” Do you mean lying about the price of your products? If a statment as backed up by factual impartial research by an independent company with no axe to grind then I can’t see how that is a lye?

    With rule 2, it’s really complicated, recent press releases have said that some Female insurance specialists are actually more expensive than some of the generalists. so should the female insurance specialists be banned and the generalists forced to sell themselves as female insurance specialists.

    Would the copy line go something like “If you are female, aged between 27 and 32, live in guildford and drive a red escort, we could save you money, as long as you haven’t had an accident in the last 4 years.” Not really going to motivate people to respond who are not in that catchment.

    I see so many pieces of copy out their claiming that people are “the cheapest” or can save an unbelievable amount of money, which aren’t substantiated. But the process of bringing all this into line seems to have begun and I expect that by the end of the year things will be much more clear (fair and not misleading)

  4. Ernest on February 18, 2008 9:32 pm

    @Ian

    “I expect that by the end of the year things will be much more clear”

    I sincerely hope you’re right but recent history has shown that such efforts tend to make little difference. With a focus on ‘cheapest’ claims - although warranted - what about the others? Do you think we can expect a more wide spread tightening up.

    Obviously the copy you’ve suggested isn’t motivational to say the least. And you can completely understand why a company is going to push things as far as possible. There’s a lot of money on the line and little bits here and there can make a huge difference.

    There are also plenty of examples of copy out there which are leading the customer to a particular conclusion which may not be relevant in a different context e.g. saying you’re the cheapest - when in actual fact everyone has a different ‘cheapest’ insurer. Those have got to be the hardest things to stay on top of - if it’s worth it at all.

    The only way in which I can see that sort of thing being tightened up is if customer actually take an active interest in the product they’re buying …and that day is not even on the horizon for the majority of people who buy insurance in this country. Especially when a company such as Which (which is supposed to give clarity to the customer) is still working from best buy tables.

    We’ve got a long way to go and from what I can see, very little motivation to go anywhere.

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