Insurers need to take a risk

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Quick: Name 10 insurance companies. Life or nonlife, it doesn't matter. Chances are, if you're not in the insurance industry, you can't. Try taking the test again, this time with banks. Chances are you'll pass with flying colors.

The point is not that insurance companies' products are inherently dull and unmemorable. Free checking is not conspicuously more interesting. The point is that insurance companies are bad at promotion. Insurance is a $2.6 trillion industry, yet not a single insurer figures in Interbrand's list of the world's 100 most valuable brands, whereas there are six banks and brokerages in the top 50.

After scrutinizing the efforts of insurers to promote themselves through advertising, I've concluded that most insurance advertising fails because insurers-ironically-are risk-averse.

It was not always so. Take a look at the old print ad accompanying this piece. Ignore the old typography and the dense body copy (this was 1968-people had more time to read). Forget the fact that you've never heard of the American Home Insurance Company. What do you think of the ad? Intriguing. Especially if you are a company director. Who is this guy? Better read on.

The ad was produced by a young Turk of advertising, Jerry Della Femina, for a young Turk of insurance, Hank Greenberg. It was designed to promote a new form of coverage called directors and officers (D&O) insurance, which the American Home, a forerunner of today's AIG, was underwriting. And it worked: Della Femina recalls that the day the ad ran in The Wall Street Journal, the insurer received 765 requests for information, including one from the chairman of U.S. Steel. A few months later, Forbes ran an article saying the American Home had outstripped the venerable Lloyd's of London as a provider of D&O coverage.

Fast forward 35 years. Open The Wall Street Journal early last year and you might have seen an ad for another insurance company. Simple, like the American Home ad. But the body copy was much shorter. And the typography was more elegant, a clean sans-serif. "The St. Paul," the headline read: "A 150-year-old company that refuses to act its age." Precisely how St. Paul was refusing to act its age was unclear. Nor was there a sliver of beef in two other handsomely designed print ads produced by Fallon to proclaim St. Paul's exceptional antiquity. Remember the ads? Thought not.

"Overwhelmingly, ineffective advertising has one source," opines David D'Alessandro in his book, "Brand Warfare: Badly managed relationships between the various agency and corporate players." As the CEO of John Hancock and the client behind of some great brand-building advertising from Hill Holliday, D'Alessandro knows the terrain. But how does an entire industry come up with wallpaper advertising?

collective failure of nerve

In the case of insurance, it looks like a collective failure of nerve; a reluctance to admit the essential truth about the industry's products. At some point in the last decade the idea of insurance as a response to something bad happening became taboo. AIG stopped saying it-its ads became instead a celebration of human potential. A new conventional wisdom took shape, at least in nonlife insurance advertising. Risk was good.

Unfortunately the effect of this has been to emasculate insurance advertising. AIG got away with it for a while. In 2000, its commercial by Ogilvy & Mather depicting the first moon landing with a voice-over from T.S. Eliot's "Love Song of J. Alfred Prufrock" ("Do I dare/ Disturb the universe") was genuinely uplifting. But in advertising, as in nature, uplift is hard to sustain. And so it proved for much of the "realize your dreams" exhortatory insurance advertising of the late 1990s.

More troubled times have seen the emergence of another, simpler theme: financial strength. This is presumably what the St. Paul ad was subtly alluding to: We're here for the long haul. Less elliptically, it's what XL Capital, a big Bermuda-based insurer, is saying in print ads that depict the company's logo expanded to vast size and deposited in various landscapes. Even AIG's most recent "We know money" campaign trumpets the scale of the firm's assets.

Financial strength is of course a serious matter. But humor has not been banished from insurance advertising altogether. This year's Risk and Insurance Management Society convention in San Diego was generally an advertising wasteland. All the better, therefore, for Liberty Mutual, which took its workplace-safety campaign to the pedicabs ferrying delegates to the convention center. "At 9 mph," they proclaimed, "it's hard to have road rage."

Kirshenbaum Bond's work for Liberty Mutual is a rare bright spot in an industry that has the raw material-the challenge of risk-to produce memorable advertising, but which shies away from it. This is ironic given that our awareness of risk is higher than at any time in recent history. The insurer that picks up this gauntlet, as American Home did in 1968, may yet create great advertising.


William Pitt is a senior adviser at marketing consultants HawkPartners in Boston. He was formerly director-marketing services at financial-services giant Marsh & McLennan Cos.

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