When we conducted our insurance industry brand equity study, we uncovered the following:
• The insurance industry is highly fragmented. While there are dozens of companies whose names consumers recognize, less than a handful receive significant unaided first mention.
• While there is high behavioral loyalty, there is low attitudinal loyalty.
• Consumers have a low emotional connection to insurance brands.
• Less than one in five people indicated that their insurance company “has never disappointed them.” (One sign of emotional connection.)
• While consumers perceive there to be differences between insurance companies, they don’t perceive those differences to be significant.
• Price and rates are among the most important points of difference between companies, suggesting the category is commodity-like among many consumers.
• The following are the seven most important consumer benefits in the insurance industry. Of these seven benefits, consumers perceive only two of them to be addressed to any large degree:
o Paying claims fairly and promptly
o Good rates/prices
o Honest, trustworthy representatives
o Accessible, available representatives
o Knowledgeable, competent representatives
o Easy to understand policies
o Company financial stability
• The following benefits have the widest variation in delivery and therefore provide the greatest opportunities for differentiation:
o Representatives can provide unbiased recommendations (all insurance categories)
o Good rates/prices (all categories)
o Have knowledgeable, competent reps (life insurance)
o Have honest, trustworthy reps (life insurance)
o Can establish a personal relationship (home and auto insurance)
o Strong overall reputation (financial services)
• The sales representative and claims adjusters’ points of contact with consumers are critical to the success of insurance company brands.
• There is the most brand preference in the auto insurance category (roughly a third with “no preference”) and the least in the financial services category (two thirds with “no preference”).
• State Farm is the preferred brand by a wide margin (especially in home and auto insurance). It also has a wide lead in the emotional connection it has created with consumers.
• GEICO is an aggressive brand in auto insurance.
• Prudential is the preferred life insurance brand.
While State Farm seems to be doing many things right, almost all of the other insurance companies seem to lack any significant brand equity. But my post is not about State Farm. It’s about GEICO Direct, the aggressive auto insurance brand. And, this is a very simple, short story: GEICO began to advertise its brand at a level that was the talk of the industry. And its message was very simple: “You could save 15% or more on car insurance!”
We have more to share on this study here.
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