The FINANCIAL -- State Farm takes Brand of the Year honors in the home and life insurance categories, holding steady in its equity ratings as the insurance category overall experiences declines, according to The Harris Poll(R) 2016 EquiTrend(R) Study.
The 28th annual study awards the strongest brands in nearly 100 categories across the media, travel, financial, automotive, entertainment, retail, restaurants and household industries, based on consumer response.
AAA edges out State Farm to claim Auto Insurance Brand of the Year, climbing to the top spot from third place in 2015. Blue Cross Blue Shield is named Health Insurance Brand of the Year for the sixth consecutive year, a feat achieved only by nine other brands in the EquiTrend study.
Measuring brands’ health over time, the EquiTrend Brand Equity Index is comprised of three factors - Familiarity, Quality and Purchase Consideration - that result in a brand equity rating for each brand. Brands ranking highest in equity receive the Harris Poll EquiTrend “Brand of the Year” award for their respective categories. This year, more than 97,000 U.S. consumers assessed more than 3,800 brands (including 56 insurance brands), across nearly 500 categories.
“State Farm has been at or very near the top of insurance brands measured for many years,” said Joan Sinopoli, vice president of brand solutions at Nielsen, which owns The Harris Poll. “The company has an incredibly strong captive agent network on the ground, and for years maintained a consistent, familiar core campaign while running parallel campaigns to stay fresh and relevant. AAA is clearly extending its relationship as a ‘friend in need’ for stranded drivers in the auto insurance category, and with aggressive direct marketing, into home and life as well.”
Insurance Companies on a Brand Equity Decline
The Harris Poll study shows that overall, the insurance industry’s brand equity falls toward the bottom of the broader financial services category, with all types of insurance on a downward trend.
“Despite some fresh and interesting ad campaigns in recent years, Harris Poll’s research shows that consumers are challenged when it comes to feeling a connection with insurance brands,” said Sinopoli. “Membership-based and captive agent channels make the strongest connection with consumers; they can leverage their affiliations (such as AAA) and their loyal ground organizations (such as State Farm). The online channel may be the wave of the future, but it is polarizing; despite the convenience, the online channel demonstrates a higher rate of disconnection than other channels, especially captive agent.”
Harris Poll’s research shows that while the online insurance channel has the strongest positive momentum (22%) compared to other channels when it comes to brand equity, just as many consumers (20%) see it as “on the way down”, indicating that online insurance as a sales channel may require some attention. According to Nielsen’s 2015 Insurance Track, 38 percent of adults “showroom,” meaning they research their options and compare prices online before they buy from an agent.
“Showrooming is a behavior that is driving tremendous change across consumer retail and it is evident in insurance as well,” said Sinopoli. “Providing the right materials to the right audiences and driving connection through the online experience will increasingly determine which agents get booked for an appointment.”
Millennials and Women Mean Equity Opportunities for Insurance Companies
The Harris Poll shows that millennials, many of whom have not yet formed insurance brand loyalties, are an opportunity for insurance companies to build brand equity.
“Not only are millennials active shoppers, but they are at a time in their lives when many are looking to purchase their first policy,” said Sinopoli. “Nielsen research shows that nearly two-thirds of millennials have shopped for an insurance policy over the past few years, often triggered by a life event—just as we have seen with older generations. Buying their first car or home, getting married or having a child can trigger a first encounter with an insurance company. Connecting with this price-conscious, yet quality-seeking group primed for purchase will be significant when building brand equity.”
The Harris Poll study shows that women represent a different opportunity for insurance brands. Women are more likely to feel disconnected from auto and home insurance brands than men, with female respondents indicating a lower familiarity with brands and a lack of fit. Nearly two-thirds (62%) of women feel that auto insurance brands don’t “fit them”, compared to 53 percent of men. Similarly, 60 percent of women feel that home insurance brands don’t fit them, compared to 52 percent of men.
However, life insurance represents a safety net for women that insurers can leverage. Nielsen’s 2015 Insurance Track shows that women (43%) are just as likely as men (45%) to feel that life insurance is essential for retirement, while women (20%) are less likely than men (29%) to say they have other investments to rely on.
“Insurance companies can create loyalty and ultimately, build stronger brand equity with women in a number of ways,” said Sinopoli. “For example, responding to women’s insurance needs through targeted products and preferred distribution channels, tailored educational opportunities, training agents to encourage couples to plan together, and ads that resonate with women as confident insurance buyers are all ways to attract and retain female customers.”