Why do some insurance companies use different trading names?
On average, each year, an incredible £25 of your car insurance premium is spent by insurance companies/intermediaries, to market themselves, to attract your business.
Insurance is one of the largest ‘marketing spends’ in the UK, with an annual budget in excess of £500 million. This is spread throughout every form of media such as television, radio, directories, hoardings, national newspapers etc.
Historically the most cost effective form of advertising has been Yellow Pages (Yell). The normal ‘cost per enquiry’ is £9, much better than any other source.
Major players in the UK motor insurance industry decided to maximise their presence in Yell. Rather than continually advertising just one brand, they decided to use different names and styles.
The Swinton Group, usually have over 60 separate adverts per directory, using many different trading names and styles, often putting these adverts next to each other to maximise the possibility of attracting several calls from the motoring public.
The latest ploy is companies which are neither insurers or intermediaries, but portray themselves as such in the directories with extravagant and misleading adverts. These companies attract calls and then simply pass the leads on to insurers and intermediaries for a fee.
Another route is the Direct Line formula of creating partnerships with household name companies such as Tesco, Prudential, Virgin, Churchill, Privilege, Egg, Lloyd's TSB, BMW etc.
This formula is also being used by Norwich Union with names like Ford, Mercedes, RAC etc.
This strategy is to effectively pay a license fee to advertise their products under these top brand names, giving the public an impression of choice that is not really there.
The outcome is that there are well over 100 pages of adverts in the Insurance section of any Yell Directory, giving a false sense of choice and competition to the UK motoring public. You pay an average of around £4 a year to Yell via your premium.
The average person finds 5 different quotes before purchasing their car insurance, by employing these tactics, the insurance companies are heavily cutting their odds from 5 to 1 to 2 to 1 or better, as the motoring public is often unaware that they are contacting the same companies time after time.
These tactics have probably caused confusion, reduced competition and eroded consumer choice. Our aim is to guide you through this confusion to help you find your best possible deal.
Comments:
What is the point of using Yell for your car insurance as even some people in the industry don’t really know the true identity of some of the advertisers. |
