Direct insurers top brand awareness polls

The Ipsos Markinor / Sunday Times Top Brands Results (Business-to-Consumer) 2008 identifies the country’s favourite brands in a number of categories. FAnews looks at what the survey revealed about the short-term and long-term insurance industries.

The Ipsos Markinor / Sunday Times Top Brands Survey provides valuable insight into consumer experiences in the insurance space. One of the more shocking findings from the survey was that 64% of respondents to the poll couldn’t name a short-term insurer. Santam says the result isn’t surprising given low consumer awareness in this category. And they believe “the entire industry has a big role to play” in changing this perception.

It clearly shows that the greatest challenge to the short-term insurance industry remains efficient consumer education.

Top of mind

Another interesting trend that emerged in the latest Top Brands Survey was a divergence between the results in the short-term and long-term industries. It seems direct insurers have stuck in the minds of South Africa’s short-term insurance clients, while they hardly feature in the long-term industry.When asked to name a long-term insurer the majority of respondents in the survey mentioned Old Mutual. The top five brands were rounded out by Sanlam, Metropolitan Life, Hollard and Clientele Life. We doubt there are any major surprises in these positions. But the interesting observation was 1 Life Direct popping up in eighth position.

The short-term insurance result was slightly different. Direct insurers Dial Direct and Outsurance occupied the top two positions, with Hollard, AA Insurance and Auto & General rounding off the top five. Market share leaders Santam and Mutual & Federal were fifth and sixth respectively.

What guides consumer decisions?

Do the direct short-term players feature so prominently because of their huge advertising budget or is something else guiding consumer decisions?

According to Santam, it is possible that this tendency resulted due to long-term insurance being viewed as a complex and long-term decision. “This means that the client approaches life insurance in a different manner to short-term insurance. Switching or cancelling comes at a cost in long-term insurance through a loss of cover and premiums.” This, of course, differs from the short-term universe where the purchase is “considered easier to understand, with no penalties or direct loss as a result of a switch between insurers.”

Trend locked-in?

Is the trend toward direct insurers locked in? It probably depends on the nature of the insurance being sold.

“The short-term insurance market consumer space has seen a shift towards the direct channel for personal lines,” says Santam. “But the opposite is true for commercial lines. Whenever product complexity and expertise is required, the intermediary has found it easier to add value to the client.”

Insurer’s view

How seriously do the insurers take such survey findings? “Santam looks at the overall results but does not consider it to be one of the key measures to determine brand perception.”

Instead the insurer relies on its own brand perception studies – particularly its FIA Intermediary Research scores which survey the financial intermediaries that act as the group’s entry point to the short-term market.

Santam warns against paying too much attention to brand awareness as they believe it’s more important to measure the brand experience. “If the experience is negative and unfair, clients will not purchase the brand – and then awareness will not make any difference.”