Last month, I wrote of the inevitable decline in protection sales should our big insurers not spend more on marketing the need for cover to consumers. Recently, I watched a tactful Norwich Union TV advertisement doing just that after England’s rugby match against Tonga. If others follow, then our market will at last be seeking to create demand.
The big composite insurers have enjoyed real success in the motor insurance market, where cover is compulsory, but NU has clearly realised no such success will happen in our market, where the Government has discouraged financial responsibility by encouraging indebtedness.
The truth is that to get people to insure, one must make them concerned at the risks they and their families will run if they do not. It is the responsible fear of what might be that sells insurance.
A message that includes the effects of death or disablement is needed but is never going to be easy to make powerful without creating offence although the Government does it all the time with health and safety campaigns.
NU, perhaps sensibly for a pioneering effort, settles for a lighthearted and thus far from convincing message, perhaps because it fears a stronger one being misunderstood as scare tactics. I fear its enquiry yield may not be enough to see the campaign continue.
The next creative team to look at this issue should be braver. It is not irresponsible to show working people what happens to them if they cannot work through disability and have to rely on the state. The real scandal remains that the Government persists in allowing people to presume that the welfare state is a decent state to be in. If only it told the truth, many more would buy protection.
I am told that one of the reasons why our big insurers are reluctant to use effective insurance messaging is that they use the same brands for selling investments and savings and so do not want to link them to the poverty caused by an uninsured disaster. It is the specialist protection brands which could be braver and run more profitable campaigns that truly shake up complacency and thus our market.
But their problem is they are scared others will get the business that their marketing generates because they rely on IFAs for fulfilment. However, while all leads need to flow to advisers if they are to be most profitably converted (and NU is not doing this, so its yield will be further reduced), an adviser’s independence is not an insurmountable issue. Deals can be struck between switched-on advisory distributors and insurers so that the leads generated by one campaign can result in sales of that company’s products only, subject to a small safety margin for individual cases where it might be bad advice for, say, an underwriting reason. The distributor can easily explain all such cases to the marketing provider.
Closing the protection gaps needs those with capital – the insurers – to be radical and challenge consumer apathy. NU has led and others should follow with stronger campaigns and better fulfilment strategies, so the enquiries yield more sales of better quality. Well done, NU, for making a start.
Tom Baigrie is managing director at Lifesearch