Backing Up The Brand

Branding is a hot topic in the insurance industry these days. Several insurers have poured millions of dollars into advertising with the express purpose of establishing awareness, trust and recognition of their brand in the consumer’s mind.

This is a positive development for the industry — in fact, some might say it is long overdue. An argument could be made that, within the context of the broader financial services industry, property and casualty insurance companies were slow off the mark in emphasizing the distinctiveness of their brand and carving out a unique identity.

“I think insurance companies in general are relative newcomers to the world of branding,” says Dr. Alan Middleton, assistant professor of marketing at the Schulich School of Business, York University, and a recognized expert in Canada on branding. “If you look back even a few years ago, the sign may as well have read ‘premises vacated’ when it came to brand identity of insurance companies. I think there is a growing recognition that the old methods don’t work any longer.”

Middleton says he is encouraged by the recent branding efforts of leading insurers, because it shows they realize now that a highly visible brand is not just nice to have, but a fundamental driver of corporate value.

BRAND = CORPORATE ASSET

The international research and consulting firm Interbrand does an annual ranking of the Top 100 global brands. It evaluates brand value in the same way any other corporate asset is valued: on the basis of how much it is likely to earn for the company in the future. In its most recent global study published for 2008, Interbrand rated Coca Cola as the world’s most valuable brand, with an estimated value of US$67 billion. Rounding out the top three were IBM (US$59 billion in brand value) and Microsoft (US$59 billion).

Another Interbrand study, also published in 2008, ranked the top 25 brands in Canada. Not a single property and casualty insurance company made the list this time round. “Strong brands create value and are business assets, but their impact is actually much broader,” Interbrand notes in its Canadian study. “The company itself, employees, investors, consumers, suppliers, government and the general public all share the rewards. And success breeds success.”

Clearly many property and casualty insurers have to play catch-up if they want to compete in the big leagues of branding. But while companies continue to spend a great deal of time and money defining and refining their messages in all available media to reach consumers, there are some potential gaps in ensuring that the brand promise consistently meets customer expectations.

Look at the claims experience. Many insurers promise their customers that they will respond quickly, courteously and fairly to any loss covered in the policy, such as a damaged car, for example. But several questions are implicit in this promise:

• How do they control the actual customer claims experience?

• How do they deal with a repair industry that shows a spectrum of variability in quality, service and capability?

• How can insurers know their brand promise is upheld throughout the claims experience?

The very real risk is that their brand is compromised by poor repair or poor service. Simply put, a poor experience diminishes the brand.

Branding has to be about consistency in expectations and consistency in delivery. In this sense, branding is about much more than simply advertising: it means insurers must have a repair network completely in tune with their brand promise and capable of managing the experience at all customer touch-points.

As Middleton notes: “The brand company is responsible for all aspects of the customer experience. So if something does not go right with a service supplier or intermediary, the stain goes on the branded company.”

CONSISTENCY IN BRAND DELIVERY

Auto repair claims represent a huge opportunity for insurance companies to deliver on their brand promise and reinforce trust in the mind of the consumer at the retail level. When there is mutual respect between the insurer and repair network, the repairers can become the best ambassadors and advocates of that brand — better than any television or radio ad.

Currently, insurers are all over the map when it comes to how they handle repair claims. Some use a wide array of car repair facilities — everything from nationally branded, multiple-location centres to the small shop around the corner. Many insurers have moved towards a closer relationship with fewer repair facilities through direct repair or preferred vendor programs. This latter approach represents a growing trend towards a partnership-based program with a limited number of nationally recognized repair networks. The goal is to ensure consistent customer experience, not to mention the achievement other performance-based metrics that might result in significant financial benefits for the insurance partner.

According to a national survey by the research firm Synovate, seven out of 10 Canadians want to be recommended to a repair centre that has a brand name. The repair network has a responsibility to build and establish that brand name, especially in an industry in which consumer trust is an issue. This has to be far more than just delivering a company brochure when the customer leaves the repair centre. For broker-driven insurance companies, the branded repair networks should support the broker community and understand how important this part of the business is to the insurer.

Take another example: car rentals. Let’s say a customer gets involved in an accident and needs a replacement car for one week. The insurance company finds a location and sets the customer up with “Joe’s Car Rental.” The office is a bit dingy, the service is slow and the client finds out he can’t get the vehicle he wants. Is that a brand promise delivered? The focus on the customer experience is one of the main reasons insurers have moved to a much closer partnership with major branded car rental companies. The same trend will likely follow into auto repair.

Some insurance companies have been reluctant to make specific referrals to clients, although that trend is changing rapidly. More consumers, especially within the younger generations, are comfortable getting referred to a repair centre by their insurance company. In the findings of a recent survey, more than 60% of consumers under the age of 34 want to be referred to a repair centre that is part of a national brand with multiple locations.

Whatever you want to label these consumers, be it “GenerationY” or the “Facebook Generation,” it’s clear these consumers want the referral process to become a much more visible, automated part of the insurer-client relationship. And with social networking technology, tools such as a branded Web site for a repair network are a necessity. For these consumers, if you are not on the Web, you don’t exist.

CHANGING REFERRAL PROCESS

In fact, insurers that ignore the referral process may be doing irreparable harm to their brand image. In the Synovate survey, more than 83% of Canadians said they would think negatively of their insurance company if the vehicle repair centre they recommended provided poor service or repairs.

The emphasis is on delivering the brand promise, with the repair network acting as the natural extension of the customer experience. In other words, customers should have as much trust in the branded name of the repair facility as in the insurance company.

In fact, one visible trend in many other industries may be on its way to the insurance sector: co-branding. This concept is simply the linking of two strong brands to create a complete customer experience in complementary products or services. The goal is to pair existing brands that have powerful images in the hopes of linking these positive images with their products or service offerings. Think Chapters/Starbucks, Intel/Dell (and others), Tim Hort ons/Wendy’s and the numerous co-branding initiatives of credit cards with business offerings.

Is there any reason why co-branding of a strong brand name insurer and a trusted car repair network could not work just as well?

To deliver brand value in the true customer experience requires collaboration across the extended supply chain. Reputation and brand value are among a company’s principal assets. One parameter that can have a positive influence on corporate reputation and share price is whether the company’s supply chain performance is accountable and measurable. A strong partnership with key supply chain vendors can significantly enhance brand value, customer satisfaction and sales figures for insurance companies.

The big question is this:Which car repair networks will make ideal partners for insurers to fulfill their brand promise? That question will be answered in the months ahead by companies committed to consistent brand delivery in the claims experience of customers.