Marketing and Advertising Strategies in UK Personal General Insurance 2007: Industry

Marketing and Advertising Strategies in UK Personal General Insurance 2007

Published Date: March 2007

Published By: Datamonitor

Page Count: 55

Order Code: R313-21310

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CHAPTER 1 INTRODUCTION: What is this brief about?; Who is the target reader?; How to use this brief
CHAPTER 2 ISSUES AND TRENDS: Introduction; The advertising message is shifting from price to features; Personal lines advertising has long been focused on price; 2006 saw a shift in the focus of insurance advertising to policy features and customer service; Many advertising campaigns started in 2006 focused on features rather than price, driven by insurers' need to raise premiums to exit the soft cycle; Pressure from the FSA is also supporting the move away from price-based advertising; As insurance providers begin to compete on features new marketing problems present themselves; The commoditization of personal general insurance products has made differentiating products difficult; Even when an advertising campaign successfully identifies a unique feature to the market, replicating its success is easy; Advertising is dominated by a few large companies, but smaller players are finding ways of challenging them; Direct insurers dominate advertising due to their size and their need to build up strong brand awareness; A few other players are increasing their budgets substantially, imitating the successful strategies of direct writers; Aggregators are also challenging direct insurers' lock on the marketing of insurance; Smaller insurance providers have adopted targeted advertising strategies to compete effectively; Reduced and refocused campaigns can benefit smaller insurance providers; Other companies target their television advertisement towards different demographics; Sponsorship is an alternative to advertising that allows insurance providers to target specific demographics without competing against the efforts of other providers
CHAPTER 3 PERSONAL GENERAL INSURANCE ADVERTISERS: Introduction; Increases in marketing budgets were rare among the top 10 advertisers in 2006; The top 10 advertisers reduced their spending by £28 million in 2006; In defiance of the market trend in 2006, three of the largest insurance advertisers increased spending; RIAS joined the top 10 in 2006 by increasing its advertising spend by 36.9 per cent; Both RBS subsidiaries in the top 10 increased advertising spending in 2006; The majority of general insurance advertisers scaled back their advertising spending in 2006; BUPA, the AA, Lloyds TSB and Saga also scaled back advertising in 2006, though by smaller amounts; The top 10 insurance advertisers continued to devote most of their marketing budgets to television and direct mail but reduced spending on all media; The top 10 general insurance advertisers favored television advertising in 2006; Direct mail increased as a share of the total spend, and was almost as important to the top 10 as television advertising in 2006; The top 10 supported their advertising campaigns by spending smaller amounts in the media of press, radio and outdoor; The top 10 advertisers devote the most resources to motor and household products, with household increasing its share of the total budget; Motor insurance advertising declined by 24.1 per cent among the top 10 reflecting a shift in focus away from this unprofitable line; Advertising on household insurance was the only product line to receive more money in 2006; Spending on all other personal insurance advertising declined in 2006
CHAPTER 4 MOTOR INSURANCE ADVERTISING: Introduction; Advertising on motor insurance products remained dominated by the television campaigns of direct insurers in 2006; Motor insurance advertising increased by 2.3 per cent in 2006 to almost £200 million; The top 10 motor advertisers are mainly direct insurers, but two brokers were also part of the top 10 in 2006; The spend of the top 10 grew slightly in 2006, driven chiefly by the substantial increases of four motor insurance advertisers; The top 10 motor advertisers focus on television advertising, reflecting the need for direct insurers in particular to build up brand awareness; Most of the largest motor advertisers spent the majority of their budgets on television advertising in 2006; Direct mail advertising is used by most of the top 10 to complement their television campaigns; Press, outdoor and radio advertising were used sparingly by the top 10 motor insurance advertisers in 2006; The smaller advertising budgets of advertisers ranked 11-20 were more evenly split between television and direct mail; The list of advertisers ranked 11-20 contains a more varied mixed of providers; Direct mail was the most favored medium among advertisers ranked 11-20, accounting for 46.4 per cent of their total spend; Television advertising was also very important to competitors ranked 11-20 in 2006; Advertisers ranked 11-20 spent smaller amounts on marketing in radio, the press and outdoor
CHAPTER 5 HOUSEHOLD INSURANCE ADVERTISING: Introduction; Advertising on household insurance products totaled £105.7 million in 2006, though growth in marketing budgets came primarily from increases in building and contents spending; Insurance providers spent £91.8 million advertising building and contents insurance combined and £13.9 million advertising contents-only insurance in 2006; The majority of the advertising spending on household insurance was concentrated on direct mail; Building and contents insurance advertisers favored direct mail in 2006, and increased spending via this medium; The top 10 building and contents advertisers split their efforts between cross-selling through direct mail and gaining new customers from television advertising; The top 10 contained mainly direct insurers and bancassurers eager to expand their market share; Direct mail was the primary means of marketing building and contents insurance, reflecting the large number of banks and brokers in the top 10; Television advertising was also important to several of the largest building and contents advertisers; Press advertising was undertaken by all in the top 10 in 2006, though this medium played a minor role in advertising strategies; Advertisers ranked 11-20 focused their more limited budgets on direct mail advertising; Direct mail dominated the advertising strategies of advertisers ranked 11-20; Only a few advertisers included television or press campaigns in their building and contents marketing; The contents-only insurance advertising is dominated by the direct mail campaigns of banks and direct insurers, which decreased their outlays in 2006; The top 10 contents-only insurance advertisers, which consists mainly of banks and direct insurers, reduced their spend in 2006; Direct mail was the primary means of advertising contents-only insurance for all of the top 10, except Norwich Union; Direct mail accounted for the bulk of the spending by the top 10 in 2006; Norwich Union and Halifax were the only contents-only advertisers in the top 10 to pursue a television campaign in 2006; Direct mail was the preferred medium for advertising by advertisers in the 11-20 bracket; Limited budgets resulted in targeted direct mail campaigns; Press advertising was the only other expense for advertisers ranked 11-20
CHAPTER 6 APPENDIX: Research methodology; Current readings; Do you need more information?; Datamonitor Financial Services Consulting; SPP writing team
List of Tables: Table 1: Top 10 personal general insurance advertisers, 2005-6; Table 2: Top 10 personal general insurance advertisers' spend by media, 2005-6; Table 3: Top 10 personal general insurance advertisers' spend by product, 2005-6; Table 4: Top 10 motor insurance advertisers, 2004-6; Table 5: Top 10 motor insurance advertisers' spend by media, 2006; Table 6: The spending of motor insurance advertisers by media, 2006; Table 7: Total household advertising spend by media, 2005-6; Table 8: Top 10 building and contents insurance advertisers' spend by media, 2006; Table 9: The spending of building and contents advertisers ranked 11-20 by media, 2006; Table 10: Top 10 contents-only insurance advertisers, 2004-6; Table 11: Top 10 contents-only insurance advertisers' spend by media, 2006; Table 12: The spending of contents-only insurance advertisers ranked 11-20 by media, 2006
List of Figures: Figure 1: Like many other advertisers, Norwich Union's quote me happy campaign focused on low price as its principle draw; Figure 2: The Norwich Union's press advertisement from September 2006 emphasizes service and features; Figure 3: CIS launched the first advertising campaign with a green focus in 2006; Figure 4: Privilege's marketing campaign, started in 2005, targeted low claims groups with its range of ads featuring Joanna Lumley; Figure 5: Bennett's, the motorcycle insurance broker, had a very successful sponsorship of the British Superbike Championship in 2006; Figure 6: The majority of the largest insurance advertisers reduced advertising spending in 2006; Figure 7: Direct mail and television were the preferred media for advertising insurance in 2006; Figure 8: As the two largest insurance lines, motor and household also received the largest proportion of the advertising budget in 2006; Figure 9: RAC began a new print campaign in 2005 called More know how as part of its reinvigorated marketing campaign; Figure 10: Sheilas' Wheels has been aggressively marketed by HBOS via a television campaign; Figure 11: Television remained the medium of choice for most of the top 10 advertisers in 2006; Figure 12: Television and direct mail account for almost 90 per cent of spending by advertisers ranked 11-20; Figure 13: Direct mail constituted the bulk of the advertising outlay for household insurance products; Figure 14: Direct mail constituted the bulk of the advertising outlay for building and contents insurance among the top 10 in 2006; Figure 15: Direct mail constitutes the bulk of the marketing outlay for building and contents; Figure 16: Halifax far outspent any of its rivals in contents-only insurance via its direct mail campaigns in 2006; Figure 17: Most advertisers ranked 11-20 pursued a single medium approach to contents-only insurance in 2006; DO NOT DO LINE SIX

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