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A passion for protection

Do you agree that arranging proper insurance against disaster should be the cornerstone of any financial plan for a family or individual not wealthy enough to self-insure? Can you tell from all the ads that insurance generally is clearly a profitable game to be in?

Competitive, of course, but a bit of a money-spinner if you get it right, it seems.

RBS would not launch a new motor insurance brand every other year if there was not a lot of money in it. Even at Mice’s Prices. So why is it that we see no telly ads for “financial” protection products? Why has even the mighty Tesco limited itself to a test campaign or two on TV, ignored radio and cut back on its national press spend?

I asked some of the world’s biggest financial institutions and players in the protection market, why they do not spend on protection marketing to the UK consumer and some answers were quite fun.

“We are only back in the market because the multi-tie deals needed us to have a protection offering.” said one. Talk about the tail wagging the dog, I thought. “We’d have no guarantee that the resulting business would flow to us.” said another. Well, design a differentiated product and market it, I thought.

But I did have a conversation that gave me a possible insight into the real issue that those who run our market’s bigger budgets might like to consider.

I asked my question: “Why, if Lifesearch’s advertising budget is 3m-4m a year when we turn over around 11m a year does your employer, Mega-Insurer, spend much less than that, when you turn over billions a year?”

Back came the answer: “It is is the wrong time, people are feeling the pinch out there, the market is declining and premium levels are falling. People do not want to buy our product, so it is madness to advertise it.”

“But”, I reply, “the soaring sales of satellite TV dishes, which cost about the same per month as a proper protection plan for most people, imply that cash is there if you can sell to it.”

“Well, of course but they want a satellite dish, they don’t want our product.”

“Why not?”

“Because they don’t see it as desirable.”

“But they don’t see taxes as desirable either and they pay those. They fear the consequences of not doing so, so why don’t you explain the consequences of not having protection to them?”

“Can’t afford that and would we see the benefit anyway or would you put the business elsewhere? Only the ABI could do that.”

So I say to the ABI: “What is needed is an industrywide campaign to remind consumers that the state is not going to look after them, that, without life cover, they are one horrible moment away from never being able to buy a satellite dish again.

Furthermore, the shock tactics that once were anathema in advertising are now more acceptable. It is possible to tell the truth and the truth always sells protection better than anything else. Why don’t you lead an industry campaign to grow our market and the value consumers place on it?”

The ABI tells me it is “examining the concept”. I will report back on what that means just as soon as I know.

You see, it is hard to improve our market when you have no money and these days, distributors do not have any money. All of us would love to be in a position to spend the millions for a long-term, effective, national ad campaign that would convince customers to buy protection but we cannot afford it. ABI members working together could do this. Have they the passion for protection, I wonder?

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