Insurance and Advertising

May we talk about insurance advertising for a moment? I’m not a fan. It’s insulting to our intelligence. Rather than promoting what matters, insurance ads divert our attention through base humor and lowest common denominators. Insurance advertising is like political advertising that never goes away.

My hat is off to the advertising firms, though. Insurance ads are among the most memorable of any industry. Insurance ads are also ubiquitous, with billions of dollars spent annually to make sure the promoted companies never have an opportunity leave our conscience.

Silly mascots make the industry look like some kind of anthropomorphic zoo; talking lizards, pigs, elephants, ducks, dogs, zebras. What’s next? I have nothing against animal mascots, per se. (My favorite mascot is a turkey, after all). But if we’re banking on people choosing insurance because they think a squealing pig is weird and funny then we shouldn’t be surprised when the industry becomes a total mockery and all its value is eroded.

One auto campaign running right now shows people standing in front a famous landmark describing their terrible experiences dealing with insurance companies. Citing generic, cynical stereotypes, the ads undermine the credibility of the entire insurance industry before claiming the advertised company is different. I could understand the company using specific criticisms of competitors. Instead, these ads basically say, “Insurance is bogus. Buy our insurance.” WTF?

Despite all the insurance ads, and obviously because of some of them, insurance is one of the least liked industries.

So it’s not unreasonable to wonder: what real value is eroded when billions of dollars each year are sucked away solely for the purpose of making dumb ads? (And that’s just the brand awareness piece. Billions more are spent by insurance agencies to acquire new customers through various forms of lead generation.)

Lead conversion is terrible, too. Never mind barely-actionable TV ads featuring neanderthals and nasally waterfowl that only exist to promote a brand. Even when potential customers do convert every carrier has a built-in filter called underwriting that makes sure carriers only write policies for the acquired customers they actually want. Believe it or not, carriers, don’t want all the fish that are caught by mass-marketing dredge nets. Basic ad acquisition and contact selling can’t determine who is close to a shore, has aggressive breed dogs, has a pool with a diving board, has made too many claims, has faulty credit, has a home business,  etc., etc.  Keep in mind that any acquired customers effectively arrive at just one company, mainly because they like the quirky waitress best, and those customers have no easy way to get and choose from comparable options. (To say nothing of how poorly educated most buyers are about insurance.)

This just all seems insane to me because nearly everyone must have insurance! Few people would voluntarily opt out of insuring their homes and cars – even when they don’t fully understand what they are buying – but if those homes and cars are bought with borrowed money then having insurance or not isn’t a choice. Insurers are gonna get theirs no matter what. So why do they need to spend so much on advertising and why is that advertising so often trivializing or irrelevant to the need and product?

What if there is a better way to make sure buyers and sellers find and become optimally matched with one another?  Can we create a new marketplace where buyers gain the ability to easily and objectively compare policies while providing sellers a no-cost ability to access and filter the entire market in order to potentially acquire only the customers who are a good fit with underwriting? Can we recapture the billions of dollars that are annually diverted from insurance into senseless advertising? I’m sure there will always be a place for brand awareness, humor, and mascots. At best, that place is secondary in a market that is healthy, competitive, and fair.

Competition won’t go away in our new marketplace because even though most carriers are niche oriented there are still plenty of insurers out there whose underwriting rules and target audiences overlap. In fact, competition thrives when companies know their potential customers are comparing options. In today’s insurance market competition isn’t happening among the products at all. Competition is primarily among ad campaigns, at the wide, shallow top of the sales funnel. The sizable competition that exists at the possible point of sale is among agents vying for customer attention after they’ve bought customer contact information sold eight times over. That is what’s bogus.

It doesn’t have to be this way. We’re building a better market for insurance at Comparity. Our mission is to simplify insurance shopping so everyone wins.

Email me if you’d like to learn more about it.