Marketing and Advertising Strategies in UK Personal General Insurance 2008

Table of Contents

Overview

• Catalyst
• Summary

Executive Summary

• Advertising spend increased in 2007
  • Confused.com launched an innovative marketing campaign in 2008
  • The top 10 advertisers increased their spending by 36.7% in 2007
  • The top 10 insurance advertisers collectively spent more than £125m on TV advertising
  • Providers spent over £200m advertising motor insurance
  • A total of £108m was spent on combined building and contents insurance advertising and £21m on contents advertising

Table of Contents

Table of figures

Table of tables

Marketing strategies

• Introduction
• Providers are increasingly positioning their products as being green
  • Most providers are still positioning their products as low price
  • CIS and Kwik Fit Insurance are positioning their products in the green space
  • Hiscox is targeting mid net worth consumers via television advertising
• Female only insurers continue to target the female segment with product differentiation
  • Marketing campaigns for female only insurance often concentrate on special cover features within a policy
  • Intune, the over 50s insurer, highlights its involvement with Help the Aged within its advertising campaign
• Aggregators are competing on market coverage and product feature comparisons
  • Moneysupermarket.com offers the widest personal insurance product coverage of the leading comparison websites
  • Go Compare places an emphasis on policy feature comparison in advertising campaigns
  • Confused.com launched an innovative marketing campaign in 2008

Top 10 advertisers

• Introduction
• Confused.com entered the top 10 advertisers in 2007
  • The top 10 advertisers increased their spending by 36.7% in 2007
  • Direct Line was the number one advertiser in 2007
    • Confused.com entered the top 10 advertisers in 2007 illustrating the increasing importance of aggregators as distributors
  • Saga reduced its advertising spend in 2007
    • The AA and RAC saw dramatic increases in their spending due to the inclusion of breakdown cover
• TV was the dominant advertising media in 2007
  • The top 10 insurance advertisers collectively spent more than £125m on TV advertising
  • SAGA and RIAS focused their advertising strategy on direct mail
  • Other media such as radio and press played a smaller role
• Most providers lead with motor insurance advertising
  • The top 10 spent £106.3m on advertising motor insurance in 2007
  • Spending on accident and health insurance saw a small decline
  • Advertising spent on other smaller lines increased dramatically in 2007

Motor insurance advertising

• Confused.com became the second largest motor insurance advertiser in 2007
  • Providers spent over £200m advertising motor insurance
  • Confused.com, RIAS and Zurich joined the top 10 motor insurance advertisers in 2007
  • Five of the top 10 motor insurance advertisers scaled back their involvement in 2007
• TV dominated media spend among the top 10 motor advertisers
  • Confused.com, the AA, RAC, Churchill and Direct Line spent very large proportions of their budget on television campaigns
    • Confused.com is aiming to scale up its business via TV advertising
    • The AA focused its advertising message on price in 2007
    • The RBS companies continued to engage in strong television marketing campaigns in 2007
  • RIAS and Zurich use a direct mail strategy
  • Press, radio and outdoor advertising account for a small proportion of the advertising budget
• Motor insurance advertisers ranked 11-20 spent more of their budget on direct mail
  • Direct mail accounted for the largest spend for advertisers ranked 11-20
  • Lloyds TSB chose to devote its entire marketing budget to direct mail advertising

Home insurance advertising

• Household advertising spend increased by a fifth in 2007
  • A total of £108m was spent on combined building and contents insurance advertising and £21m on contents advertising
  • More than half of household insurance advertising expenditure was spent on direct mail marketing in 2007
• Direct mail is a popular way of advertising combined buildings and contents policies among the top 10 advertisers
  • The top 10 building and contents advertisers consisted of a mixture of direct insurers, insurers, brokers and bancassurers
  • On average, the top 10 advertisers spent the largest proportion of their marketing budgets on direct mail, with brokers driving this trend
  • Direct insurers were more likely to dedicate a large proportion of their budgets towards television advertising
  • Press advertising was common among the top 10 building and contents advertisers in 2007
• Direct mail remained the focus for buildings and contents advertisers ranked 11-20
  • Direct mail campaigns accounted for the majority of advertising expenses for advertisers ranked 11-20
  • Fewer advertisers in the 11-20 group used press and television campaigns to promote their building and contents insurance
• The top 10 contents only advertisers saw a large increase in their marketing spend
  • The total marketing spend of the top 10 contents only advertisers increased dramatically in 2007
  • Eight of the top 10 advertisers used direct mail as their primary method of advertising their contents only products
    • Direct mail remained a popular medium to advertise contents only insurance in 2007
  • Halifax was the only advertiser in the top 10 to pursue a television campaign in 2007
    • Direct mail remained the most popular medium for advertisers in the 11-20 bracket
• Six advertisers in the 11-20 bracket spent their entire budgets on promoting contents only insurance through direct mail campaigns

APPENDIX

• AA and RAC
• Methodology
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer
• List of Tables
  • Table 1: Top 10 personal general insurance advertisers, 2006-07, (£)
  • Table 2: Top 10 personal general insurance advertisers' spend by media, 2006-07, (£)
  • Table 3: Top 10 personal general insurance advertisers' spend by product, 2006-07, (£)
  • Table 4: Top 10 motor insurance advertisers, 2004-07 (£)
  • Table 5: Top 10 motor insurance advertisers spend by media, 2007 (£)
  • Table 6: Top 11-20 motor insurance advertisers spend by media, 2007 (£)
  • Table 7: Total household advertising spend, 2006-07, (£)
  • Table 8: Top 10 building and contents advertisers' spend by media, 2007 (£)
  • Table 9: Top 11-20 building and contents advertisers' spend by media, 2007 (£)
  • Table 10: Top 10 contents-only insurance advertisers, 2004-07 (£)
  • Table 11: Top 10 contents-only insurance advertisers' spend by media, 2007 (£)
  • Table 12: Top 11-20 contents-only advertisers' spend by media, 2007 (£)
• List of Figures
  • Figure 1: Swinton heavily featured online discounts as part of its marketing campaign in 2008
  • Figure 2: Kwik Fit launched the Green Insurance Company in August 2007
  • Figure 3: Hiscox launched a new advertising campaign promoting the prestige and breadth of cover of its home insurance
  • Figure 4: Sheila' s Wheels has highlighted special cover features in its advertising campaigns
  • Figure 5: Intune promotes its involvement with Help the Aged
  • Figure 6: Money supermarket.com has focused on a price centric approach to marketing
  • Figure 7: Direct Line spent more money advertising general insurance products than any other provider in 2007
  • Figure 8: TV was the media of choice for insurance advertisers in 2007
  • Figure 9: Providers spent most of their budget on motor insurance in 2007
  • Figure 10: Confused.com launched its "Million Pound Giveaway" promotion in 2008
  • Figure 11: RIAS and Zurich used a direct marketing strategy to advertise motor insurance in 2007
  • Figure 12: Television and direct mail remained the dominant form of advertising among motor insurance advertisers ranked 11-20
  • Figure 13: Direct mail accounted for the largest media spend for the top 10 home insurance advertisers
  • Figure 14: Norwich Union launched its "We can" campaign in 2007
  • Figure 15: Direct mail and TV remained the dominant forms of buildings and contents advertising in 2007
  • Figure 16: Only three players attributed some of their budgets to television advertising in 2007
  • Figure 17: Privilege, Abbey, and CIS devoted their entire budgets to direct mail advertising in 2007
  • Figure 18: Contents only advertisers belonging to the 11-20 bracket chose to promote their products exclusively through direct mail and press advertising