Media: Strategy Analysis - Hiscox lifts profile with scare tactics

Target: audience Time-poor professionals living in high-value homes

Budget: £10 million



AGENCIES

Media: Tri-Direct

Creative: Inferno

STRATEGY

Hiscox, a leading insurer of high-value homes and other specialist
risks, moved to be the first specialist insurer to extend its home
insurance offering, with a direct consumer brand aimed specifically at
mid- and high-net-worth consumers. Hiscox needed to introduce not only a
new consumer brand, but also a new product proposition into a highly
competitive and commoditised market.

The campaign strategy focused on making higher-end consumers of standard
insurance aware of a different class of insurance, better suited to
their needs. Hiscox used the insight that this audience sought not only
peace of mind but genuine confidence in their insurance.

Accordingly, the integrated campaign was designed to dispel the myth
that all insurance is the same, and stress that Hiscox provides uniquely
extensive cover. It also aimed to convey the fact that almost 50 per
cent of claims paid by Hiscox would not be covered by a standard
policy.

Research also revealed that 45 per cent of UK consumers are underinsured
with standard policies, and only a quarter of the 2.8 million mid- and
high-net-worth households in the UK have a specialist insurance policy.
Hiscox needed to capture this demographic by challenging consumers to
question whether standard cover is appropriate for their specific
requirements.

EXECUTION

The campaign included brand awareness TV and national press ads,
underpinned by highly targeted consideration activity through direct
mail, door-drop and online.

- TV Inferno created a 60-second launch TV commercial which subsequently
ran in a 30-second version to make the ads cost-effective. Shot in
Prague, the film showed a man leaving his apartment and nonchalantly
committing 13 superstition "sins", and ended with 1,000 black cats
crossing his path.

- National press Press ads ran in a wide range of national broadsheets.
Two sets of ads reflected the TV theme of not needing to be
superstitious if covered by Hiscox.

- Direct mail/door-drops The DM campaign featured similar creative to
the press campaign; 1.5 million door-drops were also issued to support
the TV across a three-month period.

- Online Hiscox's website was redesigned to simplify quotes and online
purchasing, with the superstition campaign creative overlaid on to the
site. In addition, a viral competition and a microsite offered a prize
trip to Prague, where the TV commercial was shot.

RESULTS

Just one month after the launch of the campaign, the Hiscox customer
base had increased by 8 per cent. Hiscox's year-on-year data showed that
brand awareness was up by 500 per cent, gross written premiums up by 212
per cent, telephone sales up by 233 per cent, online sales up by 516 per
cent and quote conversion up by 89 per cent.

Search engine searches on the Hiscox name also increased, this time by
47 per cent. Household insurance demand through Hiscox's traditional
broker channel had also increased by 62 per cent.

The direct marketing programme delivered a 185 per cent sales increase
on 2005, now accounting for 20 per cent of the overall business. In
addition, the competition microsite generated 17,000 entries, with the
viral e-mail creating an unusually high response rate of 3 per cent.

The campaign won two awards in the 2006 Direct Response Intelligence
Awards: Best Innovation and Best Use of Data and Information in
Financial Services.

THE VERDICT - Jon Ghazi media development director, WWAV Rapp Collins
Media Leeds

Developing relevant propositions to meet the needs of high-value
customers is the right move in any mature market - but it's a necessity
in a saturated and commoditised market.

Everyone recognises that price-led acquisition and vanilla products have
led to a landscape with little brand loyalty beyond the (discounted)
initial 12-month period. Norwich Union will "quote you happy" and Direct
Line promises a "good deal better" - and both are backed by tangible
product innovations. Hiscox is in a strong position to take this one
step further and create a new mainstream premium market.

Using TV (or video, I should say) to establish a clear brand idea and
question the extent of cover required is spot-on, and provides the
launch-pad for the "superstitions" idea to be extended across other
channels.

I also liked the fact that the campaign didn't feel like insurance
advertising and all the pieces of luggage seemed to match. Reassuringly,
the campaign idea has been woven through the customer journey -
searching under "extraordinary insurance cover" places Hiscox top on
natural search and top of the paid-for listings under "adequate home
insurance cover".

All good stuff, but ...

There is a broad target market - one in ten households - and therefore a
risk that potential customers would think it's not for them. The work
needed to get people to reassess their needs. Devices could be used to
get the audience answering questions about their cover, raising enough
doubt to stimulate further enquiry and the opportunity for data
capture.

With more than 30,000 financial products on offer in the UK, people
often seek advice from individuals (IFAs, savvy friends) or media
(moneysupermarket.com), and more could have been done to harness this
space. Also, with such tangible claims on tap (45 per cent of customers
are underinsured and 50 per cent of claims paid by Hiscox would not be
paid by a standard policy), I am surprised there was not a greater role
for PR.

Overall, I can't help feeling that this solid effort could have achieved
much more with greater collaboration across media, creative, data and PR
at the planning stage.

Score: 3 out of 5.