What’s So Funny About Insurance?

Cable, Tivo, the Internet, blogging, changing demographics and globalization are among the many and diverse factors that are transforming the media business. But the fact remains that advertising works, even as markets become increasingly narrowed, speed to market becomes a faster and faster proposition and customers become less loyal. Consider the auto insurance segment, where television advertising has reached new heights of aggressiveness and creativity. Price competition is the unifying theme of current ad campaigns being run by major players such as Progressive, Allstate and Geico, but the old standbys of humor and pathos are also key elements.

This raises some philosophical questions, such as: When consumers buy auto insurance from Geico, is it because they have done research and concluded that Geico offers a superior product and service? Is it a price decision? Or is it because of Geico's hilarious series of faux commercials and media spoofs? (I particularly like the caveman theme.) After all, as we all know, insurance is sold, not bought -- so what is it that sells auto insurance?

One thing that the wry Allstate commercials, satiric Geico series or edgy Progressive offerings don't feature are references to technology capabilities such as processing speed and efficiency, security, online features or agent search. A 30-second advertising message has to keep things simple, but one would think that operational prowess would be a key selling point for an auto insurance carrier. However, it's pretty obvious that the industry leaders have determined that accuracy and efficiency are not "unique selling propositions," to adopt some advertising industry jargon. Focus on price, and, if that doesn't work, resort to humor. As the Geico cavemen might say, "That's so condescending."

For other insights into the forces shaping the insurance industry's distribution strategies, check out today's special edition Connected Enterprise newsletter and also visit www.insurancetech.com/ConnectedEnterprise.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio