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Differentiation as the lifeline of an industry

Posted by: Jelger Arnoldussen on April 17, 2014

A study of the Best Dutch Insurance Brands 2014

Interbrand recently launched the Best Dutch Insurance Brands report, which, for the first time, was spotlighted in an article published by the Netherlands’ leading professional journal for the insurance industry. The research that forms the basis of the article shows which brands are leading in the marketplace and why. In this blog post, I will share key takeaways from the report that will benefit insurance industry marketers and brand leaders around the globe. However, because international readers may not be familiar with brands like Centraal Beheer Achmea, ANWB, or Interpolis, I will keep the focus on general insights we’ve gleaned from the report, rather than specific brands.

Dutch insurance industry is under pressure
Before we get to the insights, I will provide you with some important background information. Across the globe, insurance companies are seen as somewhat disreputable institutions. The Netherlands is no exception, and with an obvious reason. Not so long ago, in 2004, 80percent of Dutch consumers had a positive perception of insurance companies, which were regarded as reliable and responsible. But that changed in 2006. The industry was shaken up when research on investment-linked insurances by the Authority for Financial Markets revealed that clients had been overcharged and consumers were being misled. Since many well-known companies offered these plans, the entire industry was affected and most companies suffered huge blows to their reputation. Although the situation has begun to stabilize, Dutch consumer sentiment is at an all-time low when it comes to the insurance sector. The pervasive belief is that it doesn’t matter which company you join, they all want you for your money anyway.

Expertise is not enough
It has been eight years since the scandal emerged, but the insurance companies have not been able to turn the tide. One of the reasons is their failure to re-establish trust. Focusing on expertise in insurance, its functional benefits, and telling customers how much safer they’ll feel when they’re insured, is apparently not the way to go.

ANWB, ranking third on our Best Dutch Insurance Brands list, illustrates the importance of the trust factor. The ANWB is an automobile association, comparable to the American AAA and British AA. It is a consumer rights-organization at heart and offers insurance as a by-product. Despite not being an insurance company, ANWB’s trustworthy reputation earns it a top spot in our ranking. This indicates that being an insurance expert has become less important than being trustworthy, credible, and customer-focused as an insurance brand. Given the state of the Dutch insurance industry, ANWB’s high ranking is exemplary.

The best Dutch insurance brands are the ones that have connected with the public on an emotional level. This year’s winner, Centraal Beheer Achmea, has used the same central, easy-to-understand message (that focuses on convenience) since 1985. All of the brand’s messages use humor, setting the brand apart in a “serious” industry. The runner-up on the list focuses on prevention in its communications instead of insurance, which minimizes the link with insurance itself. In short, being part of the insurance sector seems of little benefit if you want to be a strong insurance brand.

Little differentiation between insurance brands keeps status quo in place
The research for the Best Dutch Insurance Brands report shows that a large majority of consumers see little difference between the brands. Insurance companies are unable to show what makes their brand different from their competitors’. As a result, the general belief remains that it does not matter which insurance company you join. The understanding of the brands is limited as well: almost all insurance brands seem to be unable to effectively convey a clear vision and corresponding message to consumers.

Though the big Dutch insurance companies could use mass marketing to shift negative sentiment, strengthen their identities, and bring clarity to their messages and positioning, their communications have not changed much since 2006. They commit to corporate positioning messages that represent category values rather than showing a “personality.” Catchphrases like “…Whatever happens” and “Critical at the right time” emphasize the function and practicality of insurance, but are unlikely to bring these companies and consumers closer together. Not only are the messages ineffective in terms of differentiation and understanding, it is also very doubtful whether they are credible in the light of the events of 2006. The bottom line: Dutch consumers don’t need to be reminded why insurance is useful; they need to be convinced that insurance brands are trustworthy.

Offering choice (and a human touch) to improve the industry’s reputation
Consumers appreciate options. They want to know they have the freedom and opportunity to make a choice that befits them. In the insurance industry, this feeling of choice does not exist, leading to a victimized role for consumers and little confidence in the industry as a whole. The industry needs differentiating brands that show aspiration, ambition, and a higher purpose. The fact that these players have not presented themselves over the last eight years leads one to question whether Dutch insurance brands have changed in any fundamental way since 2006. And when it comes to internal clarity around and commitment to company vision, there is clearly room for improvement. The upside of this situation is that there is a big opportunity for insurance companies with a clear vision and true consumer focus to shape the insurance landscape of the future. We challenge today’s insurance brands to step up the plate, for their own good and the good of the industry.

Insurance companies should embrace the notion that consumer focus is more than providing a feeling of safety and showing expertise. Expertise is necessary, but not by any means a driver of choice in an industry in which consumers lost confidence almost a decade ago. Offering tailor-made solutions and facilitating choice benefits consumers, but these instruments alone will not regain lost trust or touch hearts. 

Jelger Arnoldussen is Senior Consultant in Interbrand’s Amsterdam office

You can follow him on Twitter @IBJelger




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