Do you ever hear people say that what the industry needs is a concerted campaign to publicize the value of life and disability insurance generally or heighten awareness of individual products such as disability income or critical illness? They point to the prevalence of under-insurance and how the market is struggling for growth. If consumers were more aware of these products, understood how they worked and realized what good value for money they represent, they would want to find out more and become new customers.
It’s an appealing thought, and even if life and disability insurance has been classically ‘sold and not bought’, it is not too far-fetched to think that a proportion of consumers could be persuaded that a coverage proposition is appealing and even part with some hard-earned dollars for it.
So how would these ‘industry campaigns’ in which the market comes together for mutual benefit – and of course, we must not forget, the benefit of consumers – actually work? Funded by one or more industry associations? Well they don’t have the sort of cash for a significant advertising push on TV, radio, in newspapers, etc. Funded by distributor firms? Well they would never think of putting their hands in their pockets for something like this, even if they stand to benefit from the increased sales. So it’ll be the carriers then.
But which insurer should contribute how much? A flat contribution regardless of size? The small carriers cry out in horror. A contribution based on premium income? Maybe that’s fairer. But probably the big boys at the top of the pile are already doing quite nicely, thank you, so why would they bother? And why would they want to help out the small outfits?
But crucially, if you were a VP Marketing even reasonably clued up, how would you spend a significant chunk of your budget? On some generic advertising aimed at a wide audience whose results would be pretty much an unknown and with no clear benefit to your organization? Or would you spend it on a campaign aimed at your target market, and focused on your products and benefits? It really is a no- brainer.
And the smart CEOs would say the best way to spend money would be on better understanding of, and connecting with, customers, improving the customer journey, creating new channels and access routes, harnessing the power of technology and upping service to new heights – all things at which insurance companies tend to have performed poorly compared with firms in other retail sectors. That would be investing in brand-building and creating competitive advantage.
Of course, the calls for concerted industry action often come from traditional players – distributors and carriers – that are particularly struggling with difficult market conditions. But if you look closely at a market you can usually find a segment or two doing quite nicely despite the adversities. They’re the ones that understand and can connect with customers, offer a good customer journey… etc. You get the picture.