Insurance Branding

Today TV is littered with insurance mascots such as Flo from Progressive, Mayhem and Allstate and the Geico gekko.  These are just a few insurance branding sources for insurance via media.  Do these branding techniques work?  Does Flo or Mayhem persuade you to buy insurance from Progressive or Allstate?  And does this increase in advertising have an impact on your premiums?

According to E.J. Schultz of Advertising Age, since 2008 Flo has brought 2.5 million fans to Progressive’s Facebook page.  Does this translate to sales and is it worth the money paid for insurance branding?  After the appearance of Flow Allstate started the launch of Mayhem played by actor Dean Winters, Winters is also known for his lead role in the HBO series Oz.  Mayhem is a personal favorite but does not entice me to purchase my insurance from Allstate despite the clever and very comical Mayhem commercials.  What Mayhem does do is make people ask themselves if certain “accidents” are covered.  “If I let someone test drive my car or motorcycle and they wreck it, am I covered.”  “Am I liable if the cleaning lady falls at my house?”  Yes, insurance follows the vehicle and home insurance liability covers workers on your property. 

In 2011 car insurance was a $161 billion business.  In 2011, the insurance industry spent $5.7 billion on insurance branding and advertising this is up from $3.3 billion in 2006.  However, according to Jeremy Bowler, senior director of the insurance practice for J.D. Power & Associates these expenditures did not increase sales.  There are two exceptions to this lack of growth.  These exceptions are Progressive and Geico.  These companies have recently won over the more mature insurance purchaser.  When the economic recession hit people started taking advantage of insurance branding that promised a reduced rate if they switched to a new company.  Currently, studies have shown that people are happy with their insurance carrier and remain loyal.  Particularly due to the fact all the discounts for switching carriers have been exhausted.

Etler-Kettenacker Agency is contracted with Progressive, Safeco, Grange, Motorists Mutual and Frankenmuth just to name a few.  With the exception of Progressive, the rest of these companies don’t have well-known actors making commercials for them or using catchy insurance branding techniques to advertise their products.  These companies sell insurance based on cheaper rates for better coverage because billions are not spent on insurance branding.  A few months ago Elter-Kettenacker agency posted an article on the reasons why home insurance rates are rising. For more information on reinsurance visit EK’s article at http://www.ekagency.com/blog/reinsure.aspx. In short, reinsurers are expecting their money to be returned due to catastrophic losses such as Hurricane Katrina and the tornado in Joplin.  Now we are facing the devastation from the recent tornado in Oklahoma.  Money paid for claims despite where you live in proximity to these catastrophic events has to be recouped and it will be recouped by all insurance companies raising premiums.  With this said, does fancy and expensive insurance branding lure you to switch to companies like Progressive, Allstate or Geico?  Or are they just entertainment and thought provoking at best?  It doesn’t hurt to compare prices every year for your auto and home insurance.  Etler-Kettenacker Agency has wonderful representatives that can shop many companies that may be unknown to you as a customer but these companies can offer top-notch insurance at reduced rates due to the fact that they spend less on insurance branding.