Table of Contents
- 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?
- 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
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