After years of well-publicised scandals, the protection industry is in need of a boost. David Worsfold explains why previous campaigns have failed and why the iron is now hot
The calls for an industry-wide campaign to promote protection insurance to the general public were enthusiastically supported by the audience at the recent COVER Forum. This is by no means the first time such a call has been heard, however, so why should it be heeded now any more than it has been in the recent past?
It is the logical response from those trying to make an honest living in a market that has been battered by a decade or more of scandal - pensions mis-selling, endowment shortfalls and now gathering storm clouds over the payment protection market - that forms a drab and depressing backcloth against which to do business.
There has been a collective market failure to prevent such damaging scandals, so why should there not be a collective market response to repair the damage?
Add to this the huge figures bandied around about the 'savings gap' and the 'protection gap', and the belief that a generic promotional campaign is needed starts to gather real momentum. These arguments were certainly more than powerful enough to persuade the COVER Forum audience that action is urgently needed.
Track record
Just about every sector of the insurance market has advocated such a campaign at some time in the last 25 years, but nothing has ever come of it. Why?
The industry has run a collective marketing campaign before. It ran during the 1960s with advertisements in the national press, popular magazines and a television campaign. It was paid for by insurance companies through the then principal trade body, the British Insurance Association.
A cartoon character, imaginatively called Fred, urged readers and viewers to "get the strength of the insurance companies around you" by wrapping a huge policy document around himself and then banging the side of it, striking an 'Englishman in his castle' pose. It was successful in as much as it was certainly memorable. The last adverts ran over 35 years ago yet you can type the catchphrase into a web search engine and come up with several hundred references to it.
The reason why it stopped is also the reason why the industry has been so reluctant to contemplate resurrecting it.
The cosy world of motor insurance - where most premium rates were set by insurers colluding in the so-called tariff scheme - had been severely disrupted by the emergence of an aggressive new player in the late 60s. By 1971, Vehicle & General (V&G), the new kid on the block, had gathered several million motorists into its fold.
It then collapsed and, with no compensation scheme in existence (the Policyholders Protection Act was passed in 1975 in response to the V&G and other failures), the exhortation to "get the strength of the insurance companies around you" suddenly sounded hauntingly hollow. Fred bit the dust immediately, never to rise again.
This has left a legacy upon which all subsequent proposals for generic advertising campaigns have floundered. The 'egg-on-face' argument has always won the day and provided a reason for doing nothing.
The fear - mainly among the trade associations - has been that a campaign could boomerang back at them if a similar scenario emerged again. A company collapse or mis-selling scandal would be disastrous in an age when the general public, politicians and commentators are much less forgiving than they were 35 years ago. It could, some have argued, even lead to class actions against the industry and its trade bodies for promoting an investment that turns out to be less secure than portrayed.
Does this destroy the case for a campaign to promote protection?
There is almost universal acceptance among all key interest groups that the UK would benefit economically and socially from a greater take-up of life and health protection as the limitations of the welfare state become more universally understood and accepted. Certainly when it comes to the benefits side of the welfare state equation there is virtual unanimity on its limitations.
On the NHS there is less agreement, although a growing understanding across the political spectrum that it cannot do everything and a steadily increasing role for the private sector in health-care provision is a result.
The overwhelming majority of the population do not have sufficient cover to bridge the protection gap, so there is a strong case for explaining both the problem as well as advocating the solution.
Of course, in the last quarter of a century, marketing theory and practice has moved on apace and people now live in an era where brand is everything.
This means that all major insurers and financial institutions pour millions of pounds every year into building up their brand, raising its profile and imbuing it with values they believe will help sell the products that go under its banner.
It is frankly naïve to think that they will be willing to submerge their brand identity in a generic campaign or contribute the millions of pounds that would be needed to create and sustain a campaign of sufficient magnitude to make an impact on the general public.
Although IFAs may think this is the way to go, it is not going to happen. Does this mean the whole idea is a waste of time?
With some creative thinking there is no need for the idea of a campaign to promote protection to be stillborn as it is not a question anymore of a generic campaign or nothing. The very fact that all the product providers run major marketing campaigns creates the opportunity to reach out to the public with a simple message about why financial protection products are an essential element in any family budget.
Consensus
Surely, it cannot be beyond the wit of the marketing brains in the industry to agree a list of common messages and agreed themes that they could all include in their multi-million pound promotions so that a critical mass of consistent common advice - whether as slogans or more in depth - is presented to the British public.
This would still take a huge effort and a tremendous amount of goodwill but should not necessarily present the obvious insuperable hurdles that trying to win backing for a full-blown generic advertising campaign would.
Looking much further ahead, this may stimulate discussions about simple, generic products widely available for the less well off. That, however, is a long way ahead and should not be seen as an objective at the outset.
Just as the objectives need to be realistic, so does the mechanism for delivering them. While it is both impossible and inappropriate to try to sideline the major trade bodies, especially the Association of British Insurers, it is probably wise to avoid the potential quagmire of trade association politics.
Ideally, a campaign like this needs to be owned by the major product providers working closely with the larger IFAs: this requires people to step forward and take the initiative but needs companies to set aside a lot of corporate pride for the common good. Is that a challenge too far for the industry?
David Worsfold is group editorial services director at Incisive Media
