Viewpoint - Marketing the middleman

Marketing has always been a bone of contention between insurers and brokers. All too often, advertising campaigns by the big insurers are viewed suspiciously by some brokers as a means of trying to cut out the middleman. The reality, however, is that this argument is a distraction from the fundamental need for brokers to identify and promote their differentiators and the value they add to the client experience.

It is fair to say that our £10m marketing campaign, which launched earlier this year and is due to hit the media again this month, raised some eyebrows - not least within the broker community.

There was some concern that this was Hiscox growing its direct business at the expense of the broker arm. Our aim though is much wider, and our television and print campaign is all about raising awareness of the brand as a whole. Growing the direct business and increasing the flow of work from intermediaries are not mutually exclusive. Both channels benefit from the greater awareness and understanding that a strong marketing campaign generates. So far we have seen dramatic increases in both direct and broker-led sales as a result of our marketing and long may this continue.

However, some major players are clearly solely promoting their direct arms and, here too, intermediaries' concerns over the marketing of direct insurance and the impact on broker profits misses the point. Rather than worrying about what others are doing, brokers need to be more concrete about their own proposition and realise that it is folly to compete with the direct channel head on. Instead of fighting a battle on price that they will never win, brokers need to shift the battleground on to areas where they can have a distinct impact.

Brokers add value to the client that a direct relationship can never hope to emulate. As Kevin Pallett from Fusion quite rightly pointed out in the last issue of Professional Broking, brokers need to be consultants and not just buyers' agents. They need to utilise their strengths such as their local face to face relationships with the end consumer. And what is more, they need to shout louder about the value they add.

With the intermediary market coming under increasing pressure, it is vital that brokers do more to highlight their value to consumers. The high profile generic advertising of insurance players like Hiscox will help drive some business towards intermediaries but brokers themselves must fully grasp the nettle, differentiate their offering and then shout long and hard about it.