Insurance is a crazy concept, isn’t it? You ask someone to take on a risk that you’d rather not take on yourself. You transfer that risk elsewhere for a sum of money. Then you sleep soundly in the knowledge that you don’t need to worry about X or Y, because you’ve got it - literally and metaphorically - covered.
But at the same time, it’s not a purchase any of us want to make. Buying car, life or commercial insurance doesn’t spark joy. Whether you're an individual or a business, you just want the cheapest option, should the worst happen.
So marketing teams at insurance companies are dealt a difficult hand from day one. Do you build on the fear and uncertainty of your target audience, to compel them to act? Or are you simply a reluctant party in a price war, where the lowest offer wins?
Or is there another way? With insurance companies being established from the ground up, without the 400-year legacy of the London market behind them, are we seeing the rulebook rewritten - or chucked out altogether? And how are large ‘titan’ insurers learning from their more rebellious insurtech peers?
Marketing the grudge purchase
I recently spoke to Hiscox’s former CMO and insurance marketing veteran Annabel Venner, about her experiences marketing this so-called ‘grudge purchase’.
Annabel told me that there is a “deep distrust of insurance companies and whether they will pay out, should the worst happen”. Likewise, a recent YouGov report revealed a lack of trust in the insurance industry – to the point where most consumers simply don’t believe their insurers will pay out legitimate claims.
And according to Annabel, aggregators plus a price war on new business hasn't helped either.
“Consumers have been encouraged to choose the cheapest deal, and they don’t think about why it may be cheap. The reasons can be hidden. High excess, exclusions, limits, etc. You wouldn't buy the cheapest parachute, why buy the cheapest insurance policy? You need to check to see whether it fits your needs.”
Hiscox kept away from the war on price and carved out a unique position in its look and feel, being “in but not of” the insurance industry. “Its marketing connected strongly with its target consumers and demonstrated that it clearly understood them and their needs”, said Annabel.
Insurance companies have had to walk a delicate line to win the hearts and minds of their customers - arguably, because they haven’t had their foundational trust, which has made it very difficult to push boundaries.
Building trust from the ground up: the Lemonade effect
Lynzi Ashworth, Head of Digital Marketing EMEA at Aon, acknowledges the challenges with creativity and risk taking for many in insurance today. “The [entire] financial services industry is highly regulated and sometimes archaic in its thinking, due to aligning to legacy brand values and generally having a low risk appetite when it comes to creativity.”
But some challenger insurers popping up today don’t have a ‘legacy’ brand to contend with because they’re creating something unique, from scratch. Therefore, they’re building trust from the ground up, as well as the product.
Take Lemonade, a NYC-based online insurance company, that offers low-cost renters’ and homeowners’ insurance.
Lemonade tells us to “Forget Everything You Know About Insurance”, consciously disassociating itself with legacy brands and the current system altogether. There’s plenty in the product itself that supports this, from the mobile app to the AI-bot. But there’s lots in the marketing too.
It’s transparency and down-to-earth approach to insurance is unrivalled, publishing negative customer feedback, and writing blogs about why the company - quote - “sucks”. There’s a clear social purpose agenda too, with impact forming part of the company’s legal mission and business model.
And with customers and investors having bought into their approach from day one, they have scope to flex their creative muscles too. When was the last time you saw an insurance company publish a “book about a dog who fricken loves pizza”?
Lemonade is a great example of an insurer doing things differently. However, it’s important to remember the very different position Lemonade is in versus well-established competitors with 300+ years of heritage behind them.
I recommend this great Secret Leaders podcast interview with Lemonade CEO Daniel Schreiber, if you want to learn more.
Driving creativity in more traditional firms
So we’ve seen fundamental shifts in the way new entrants are approaching marketing and communications. But according to Annabel, while there has been a shift in insurance advertising more broadly, some of the well-trodden tropes from the last few decades aren’t going anywhere.
“There’s still a proliferation of toys, mascots and comedic imagery,” said Annabel. “Many work well and drive high awareness, particularly for the aggregators - look at the success of the meerkat! But there is a risk that they trivialise the industry.”
What’s clear, from my experience in the industry, the people I’ve worked with, and those I’ve spoken to here, is that creativity is a challenge insurers are tackling head on today.
At Aon, for example, Lynzi has always seen these challenges as a great opportunity for truly creative thinkers. She said, “If you can overcome all of these ‘creativity hurdles’ and still come up with ideas that make people sit up and notice your brand - and to shift perception in the desired way - you know you are winning at your game!”
You can listen to Lynzi talk on the topic here alongside Clarity EMEA President Rachel Gilley, at a recording of a recent panel at Cannes Condensed.
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