If you watch any television these days then you know that as
soon as an ad sequence starts, you are very likely to see at least one ad for
car insurance. It is no accident that
you seldom see specific appeals for you to buy home insurance in NC. But that is simply because most insurance
companies are losing money on NC
homeowners insurance. But auto
insurance is different. The profit
margins for this product are much higher, thus you see so many ads offering to
save you money. These ads must work though, since the
insurance companies just keep upping the ante and spending more and more each
year. But just how much is being spent to try and
convince you to switch your auto insurance policy?
The numbers are shocking.
In fact if you are one of those who would like to see more money spent
on solving world problems rather than advertising, you may even be
offended. The insurance company that is currently
spending the most money on marketing expenses is Geico. Last year they spent $993.8 million dollars
on marketing. That’s almost a billion
dollars! Geico increased its
expenditures in 2011 by 10% compared to what they spent in 2010. And
yet, this 10% increase, as amazing as that seems, is far below the 15% average
increase in marketing spending industry wide.
Geico’s marketing budget amounted one sixth of all the marketing spent
last year by the entire property and casualty industry.
You’ve heard the saying that bigger is not always better and
I think it comes into play here. The
more ads they put on television, then the less impact each one has. But this arms race that the largest insurance
companies have joined in simply requires them to spend more and more each year
to overcome the noise that the others have created trying to keep up with
them. Where it will end is not clear but
at some point in time the return on investment will fall and this trend will
slow down or stop completely.
You may be interested to know that while auto insurance
represents about 1/3 of the total of all property and casualty insurance sold,
the advertising and marketing budgets for car insurance represent more than
half of the total spent on property and casualty insurance marketing. This is evidence to me that these direct
writer insurance companies with their faceless call centers believe that the
average television watcher is probably the biggest sucker for them to
approach. And they are probably right. They boil the complicated process of
protecting your hard won assets down to saving money. Look, saving money on car insurance is easy,
just reduce your coverage. But doing
that of course flies in the very face of why you would buy car insurance in the
first place. But hey, if they can
distract you with comedy and talking reptiles, why not? They surely won’t spend this same amount of
money trying to reach commercial insurance customers because commercial
insurance customers are too savvy to fall for the idea that all insurance
policies are the same and that the lowest price is the only goal when buying
insurance. And people who buy car
insurance should be just as careful as business customers because after all,
you are buying car insurance to protect your assets that you have worked so
hard for over the years.
At Clinard
Insurance Group we do things differently.
We don’t have billion dollar ad budgets so we have to get it right with
every person that calls us. We do this
by offering you an experienced, well informed agent who will take the time to
listen to you, hear your story and then help you find the right policy for your
needs at the lowest possible cost to you.
We insure thousands of families all across North Carolina and would love
to have the opportunity to show the difference between huge ad budgets and one
on one consistent, professional help.
Give us a call today; toll free, at 877-687-7557.
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