Hiscox: Turning prospects into profits

Hiscox has been making waves over the past year.

The company’s bold approach to marketing has been widely recognised, sweeping a clutch of awards.

The broader business, meanwhile, has been benefiting from the company’s marketing excellence, reporting record profits in its last annual results (31 December 2023), with net insurance contract written premiums up 10.7% year on year.

The Anglo-Bermudan insurance group has been rarely out of the spotlight over the past 12 months. Its “Your Business Story” campaign saw off challenges from broadband provider TalkTalk and Asahi UK to win the Cross Format campaign of the year at the Outdoor Media Awards in June.

Prior to that, it collected gongs at The Drum Awards, in the search marketing category, three wins at the Creative Circle Awards, the finals at the Cannes Lions International Festival and a platinum service award from Feefo in recognition of the quality of its customer experience investment.

Responsibility for brand marketing belongs to Ed Birth, a creative marketer who joined Hiscox from agency land in December 2022.

Data relevance
Unsurprisingly, given the need to measure, interpret and anticipate risks, the insurance market has looked closely at hard data when considering product or marketing activities, but Birth’s career experience is helping Hiscox to go one step further and look at softer insights too.

His work with his internal colleagues is now generating commercially appealing campaigns, which are also delivering on the hard data that drives business objectives.

“We do research with different sub-sectors to find out what triggers them, and then play that back to them across various touchpoints to show we understand them, in a humorous way,” he explains.

“We leverage the internal insights of underwriters, for example, who are incredibly knowledgeable about a relatively niche sector, before speaking to our customers.”

Birth acknowledges that the work of he and his colleagues is a genuine “mix between hard data and softer insights”, but claims that marketers structuring approaches on hard data alone will struggle to ensure their message lands with potential buyers.

“The hard data tells us their turnover and number of staff, but the hard data won’t make interesting campaigns. The softer insights allow us to showcase a proper understanding of what it’s like to run a small business,” he says.

In May, Hiscox said its core retail ICWP business had grown by 5.8% quarter on quarter, while its US digital partnership business grew 11.3% over the same period. The company’s chief executive, Aki Hussain, was bullish on the opportunities for the remainder of 2024 across the company’s retail proposition and for Hiscox Re and ILS.

Understanding the buyer
Much of the success of Hiscox’s brand – particularly with UK small and medium sized businesses – has been in establishing empathy with its target market and demonstrating solid market understanding.

Birth (and his team) has leant into this approach to customer acquisition by crafting careful promotional narratives that demonstrate relevance to potential prospect groups.

“Of course, every business wants to be trusted,” he says. “But the mistake businesses make is thinking their main messaging needs to be around trust. You don’t say ‘please trust me,’ you show that you’re trustworthy.

“By getting your brand awareness up, you will generally find that you’re more trusted, considered, and recommended.”

He also believes that customer loyalty is “weirdly” something that doesn’t get discussed often within insurance circles, but he says that the emotional relationship with decision making should be considered before any campaign gets deployed.

“In insurance, decision making is even more emotional because there’s only a promise to pay. Customers can compare what’s theoretically covered by one insurer vs another, but they really have no idea whether the product is good, or which insurer is going to go the extra mile when they need it. The emotions attached to the brand, therefore, become even more important,”
he says.

“As we’re in a business where customers renew each year, we resell to them each time and don’t take loyalty for granted. People think that business decisions are less emotional than they really are. We’re still humans, and all the psychological evidence says we make our decisions emotionally, then post-rationalise them.”

Birth believes that decisions in business are ultimately made in very much the same way although he suggests that “people are hesitant to confront the emotional side of their decisions in the same way.”

If marketing approaches ensure buyers feel like they’re the custodian, they will ultimately be more successful, he says.

“The buying journey when speaking to business owners rather than consumers is usually more complicated. There’s inevitably more jargon, complexity, and specialist knowledge required,
but a good strategist can get under the skin of that.

“B2B can feel more opaque, but it just requires more segmentation and research into the different departments and personas you want to access.”

Birth says that marketers benefit from being realistic about the real level of importance of the product being sold to the customer.

“Insurance products are likely of low interest to small business owners, so for Hiscox, it’s more important to show up, be entertaining, and forge that emotional connection, rather than directing them to the website to read seven long articles about the importance of insurance.”

Measuring brand health
While some of Hiscox’s success can certainly be attributed to its deep understanding of its customer group, the company has also been keen to use data modelling and qualitative surveys to build market awareness.

The specialist insurer has been measuring levels of brand awareness and brand health since deployment of its most recent campaign. It has seen levels of “emotional feeling” and positivity towards the brand nudging upwards since the work was first deployed.

However, Birth says that he takes feedback from surveys with a pinch of salt, as some of the data can be misleading.

“There are limitations to brand studies and survey questions,” he says. “People just want to get through the survey and their answers can be quite artificial. Within brand tracking, one of the measures that we look at is spontaneous awareness – how many people name Hiscox when they’re asked to list, say, five business insurers.

“That measure has gone up, as has search behaviours. The number of people searching for Hiscox business insurance online is essentially the commercial version of spontaneous awareness, a metric that can be measured.”

The next project to measure the marketing team’s work, however, is playing out in the second half of 2024, when the business will be carrying out an econometric analysis, which Birth considers the gold standard for measuring brand investment. Within advertising, an econometric analysis can help marketers to form econometric models to predict how changes to the campaign strategy could impact sales.

“The challenge is the volume and duration of data required to formulate the proper regression modelling, but it will eventually show us the attribution of incremental sales over the medium and long term,” Birth says.

This article features in the special insurance-focused edition of Financial Promoter, released in September 2024. To request a subscription, please contact Ella.farmer@rhoticmedia.com