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Friday, September 19

Tom Baigrie calls for protection advertising campaign @ 09:33 AM

I’m told that the recent ABI sales figures make interesting reading. Overall sales of Term, IP and CIC are the tiniest smidgeon higher so far in 2008 than they were in 2007, which itself was down on 2006. A sort of “dead-cat bounce” as my City friends might put it. A reinsurer said recently that sales levels are falling fast in this 3rd quarter in their view, despite the many mortgage advisers being forced to try to sell protection to stay afloat and despite the wider public becoming far more gloomy and thus likely to see the point of protecting rather than spending. Protection is simply on ever fewer shopping lists it seems.

Now if you have a product you think most everyone should buy and they are not buying it, you might consider developing a marketing strategy to promote its virtues and show people why they need or want it. If the product is one sold in lots of different forms by a whole industry of big businesses none of whom are succeeding as well as they could, you might decide on a generic campaign to awaken latent demand for the whole sector. An initial kick start by all, which individual companies can segue into their own campaigns aimed at stressing the best points of each corporate marketer as they see fit.

If those big companies were having issues in their other business areas and indeed many were starting to focus specifically on this under-bought area, you would think that such a campaign was a shoo-in. Even more so if the market was in a prolonged price war caused both by the consumer’s lack of interest in what you sell and their lack of understanding as to what makes products and suppliers different and worth paying for. When consumers think all products are the same they buy the cheapest they can and when that is added to plentiful supply a price war is inevitable. So an industry campaign that increases demand and then allows different products and approaches to be promoted would seem to this writer to be more a required investment than a brave one!

Of course, despite the malaise revealed by the ABI figures, there is no such plan in the protection sector of the UK financial services market. The management incentives within the largest providers focus on market share rather than market growth and the retail sector is so disparate and unfocused that any such campaign is beyond it. In truth most retailers’ inability to determine and promote good value rather than cheap price exacerbates the price war.

This idea for a generic campaign was triggered by the sad series of headlines in the trade press of late: ““Insurers may quit if price war rages on”; “RDR could see advisers shun protection sales”; “Ignorance takes toll on protection sales” are just a few. Perhaps one can now get a consensus of the desperate to address this pessimism, ignorance and misunderstanding at its root cause. What’s needed I think, is a bit of seed money to see through a tender process from the country’s leading consumer marketing agencies and then a far more serious collective spend on a campaign aimed at driving home to consumers their needs and turning those needs into wants.

Now asking the ABI to organise such a generic campaign (as I have done for the last few years) is no good, because to be effective it’s certain that such a campaign has to make consumers understand their vulnerability to personal financial catastrophe. It would have to be as edgy and even dark as a government road safety campaign and it is unfair to ask that of a trade body.

It’s also pointless looking to the government to help. No politician would sanction a campaign that reveals how little value for money the consumer gets for their national insurance contributions and how poor the welfare state really is. The regulator is out as they have no brief to expand sales just to meet societal needs.

So it needs someone else to try to draw the big companies together to fund such a campaign, but not to exert a stultifying veto over it. A retail partner of most of them might have a chance of getting them to at least give this idea the time of day. Do let me know what you think, particularly if you work in the sector and are just a little frustrated at your never growing pay packet and suspect that may be due to the collective failure to grow our market during the last 10 years of plenty. Who knows, perhaps it needs a time of gloom for our necessarily gloomy products to appeal to the now not so carefree consumer!

This article appeared in the 11 September edition of Money Marketing.

-- 2 comments: View - Post your own comment

Posted by Alan Lakey - Highclere @ 03:17 PM, September 19

Like all right-thinking advisers I applaud and concur with Tom's call to arms. Protection, unlike savings and investment. is essential. If the ABI will not or cannot assist then it is up to the insurers to fund such a campaign. Rather than waste money on cheap cups and umbrellas they should fight the protection corner and drag consumer awareness from where it currently resides in that dark corner over there.

Posted by Phil Castle @ 03:14 PM, September 19

Having read what Tom has written it clarifies why the ABI, Govt and the FSA have not taken action. Basically it is not in THEIR best interests. As is often the case it is in our clients and us as their advisers to help them identify the risks they are taking and then make a conscious decision to do something (or nothing should they wish) to protect their families wellbeing. I would happily pay a turnover based leavy to help promote this information. The better informed clients are BEFORE we sit down with them, the more valuable use of out time can be made in front of them. It is dissapointing, that the FSA Consumer guides (and whilst I'm sure we can all find fault with them) are excellent particularly at getting voer teh basics of pensions and mortgages, there is nothing like the focus on protection. I wholeheartedly support Tom's stance on this. I know other people like Brian Lentz also consider protection needs very important. I know scare stories are not nice, but sometimes people NEED distrurbing. I use the axample of a declined critical illness claim one of my clients suffered to explain the importance of full disclosure. NO adviser wants a client to pay good money for something that proves worthless.

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