Invisible Brand

The direct insurance market is certainly big, Lucian Camp acknowledges, but as yet it’s far from clever.

It’s difficult to believe that even a financial services visionary as farsighted as Peter Wood could have known quite what he was starting when he first steered Direct Line’s little red telephone in our direction back in 1985.

Depending a bit on how you count it, the direct motor insurance sector is now the single highestspending part of the financial services market, with a total spend of some £500 million or so last year – well over £10 for every car on the roads in the UK. And the number of brands, campaigns and ads continues to proliferate: every year, it seems there’s more of everything.

There’s more segmentation, leading to the launch of targeted brands like Diamond and Sheila’s Wheels. There’s more media fragmentation, leading to campaigns that run not just in the press and on TV but in dozens of different media from petrol pump handles to text messages. There’s more and more affinity deals, with so many organisations now signed up to affinity deals that you suspect insurers will soon have to start signing up tiny niche affinities like families and bus queues. There’s more and more use of the internet, which in turn is leading to the development of so many price comparison sites that soon we’ll need an aggregator to aggregate all the price comparison sites. There is, of course, more and more price competition, in a market where at any given moment there will always be several major players looking to buy market share and the hell with profitability.

These days – some would say belatedly – there’s arguably more and more innovation, as major players looking to maintain an addedvalue positioning build in benefits that are starting to show surprising amounts of insight into consumer needs. And, of course, there are more and more and more and more brand icons – phones, dogs, elephants, cartoon characters, admirals (with parrot), pink cadillacs, Michael Winners.

Some of what’s going on, it must be said, seems very odd. Don’t all the textbooks tell us that as markets mature, they’re typically made up of fewer and fewer brands, not more and more? And isn’t it strange that the major players seem quite happy to maintain portfolios of deliberately unsegmented, heavilyoverlapping brands – RBS, for example, have Direct Line, Churchill and Privilege – despite the marketing cost and the danger of cannibalisation?

And why do so many of the campaigns have to be quite so utterly repellent? I would rather give up driving and hop on one leg for the rest of my life than buy insurance from Elephant.com. True, in every market there’s room for one “SOBIG” brand (“SOBIG” standing for “so bad it’s good” – Ryanair, Ferrero Rocher, Shake’n’Vac, Glade air fresheners, holidays in Turkey). But in direct insurance, at least half the brands seem to go out of their way to be as hateful as possible. This can’t make sense, especially when I think back to our fouryear tenure of the MORE TH>N account and remember the findings from the tracking study, which said that one of the main reasons why people came to MORE TH>N in the first place and then remained subsequently was simply that they liked the brand.

But in such a big, crowded, competitive market, some of what’s not going on seems even odder.

Most of all, it seems extraordinary that as far as I can see, not a single provider has yet adopted the kind of promotionallybased, calendardriven plan that is commonplace in pretty much every other retail market.

The possibilities for promotional marketing are pretty much endless. Why can’t we have an Estate Car Month, with either some special discount or an extra benefit for estate car drivers? (Bearing in mind the renewal cycle, promotional ideas like these will have to be available to people who come for a quote during the promotional period, even if they don’t actually renew until some time later.) What about those 48hour online sales like the budget airlines do, with emails reminding us every hour for the last few hours that time is about to run out? What about marquespecific promotions (“Attention all Toyota drivers”)? Or occupationspecific?

I’m talking here mainly about customer acquisition, but the opportunities among existing customers are even greater. To my slight embarrassment, my household currently runs five cars, insured with five different insurers. I don’t think any of them has even ever asked me whether I have other cars they could cover, let alone offered me any kind of deal for taking on the whole lot. Beyond this, anyone looking closely at the data could easily find other ways of locking me in. I drive a lot on the continent in one car, and spend a lot of time and money ordering Green Cards. Anyone who could make that easier (why can’t I do it online?), or cheaper, or both, would give me an important reason to renew. I don’t think any insurer has ever asked me about the age of my children, but I’d have been happy to tell them if they’d asked: in fact, to my horror, my daughter was 17 this year, and guess what she wanted for her birthday present? The whole business of investigating how best to insure a driver of that age was difficult and horrifyingly expensive: I’d have been delighted if any of my insurers had contacted me and offered me a deal. (If anyone’s interested, my son is only 14, so there’s still time…)

And then, of course, without stepping too far beyond the remit of this article, the fact is that most of the insurers I deal with do in fact have other products and services to sell me. Most have other general insurance products: a couple have wide arrays of financial services from mortgages to pensions. All of them are completely and utterly hopeless at this, sending me no more than the same useless and boring junk mailings that they send to cold prospects.

I can only think that for the time being, it’s a bit like shooting buffalo on the plains of America in the 19th century. There were so many buffalo, and they were so easy to hit, that noone bothered to do anything remotely clever or difficult. Noone tried to shoot anything except buffalo. Even if you were only slightly peckish, you’d shoot a buffalo, cut off a small hunk and leave the rest for the vultures. If you’d shot a buffalo and put it somewhere, but then felt hungry while you were a hundred yards or more away, you’d shoot another one rather than go all the way back.

As the buffalo came closer and closer to extinction, this triggerhappy era came to an end. People shot other animals instead – even little ones, like possums and squirrels. And if they did manage to get a buffalo, they’d make use of every ounce – right down to the soup from the bones. This was harder work than simply shooting and hacking, but at the same time more creative, more rewarding and more worthwhile.

In direct insurance, as far as I can see, the buffalo are still crowded quite thickly out there on the plains. Assuming that this large and growing group of hunters keeps blasting away, though, they’re going to start thinning out pretty soon.

From a business point of view, that will be a shame. From a job satisfaction point of view, though, it will be nice to move on to some more rounded strategies. And maybe some less loathsome advertising.