INTERVIEW: How Hiscox found triumph in ‘disaster’

Hiscox is forging ahead with its positioning of difference versus big corporate insurers as it reaps the benefits of a successful and disruptive brand campaign, according to its Head of Brand.

Hiscox had historically been a brand with a higher profile than one might expect from its size, explains Ed Birth, much of which was due to “fantastic brand advertising” in the late 2000s and 2010s. He says that while he was working at advertising agencies at that time, Hiscox always stood out as a brand that was very different – a brand that was “zigging when everyone else was zagging.”

“It used intelligence, wit and humour, and had this really distinctive black and red colour scheme.”

This was particularly important considering the smaller size of Hiscox compared to large corporate insurers such as Allianz, Zurich and Axa. Where the insurer is positioned, it also competes against the more agile Insurtechs.

Like many brands, however, Hiscox had got drawn increasingly into digital performance marketing. A key target market was small business insurance, which is very search engine-driven.

“People aren’t in market, then suddenly, they’re in market for just two days. So when they search for business insurance, you’d better be there on Google or you’re going to lose the leads somebody else.”

Hiscox ended up putting more and more of its budget into measurable performance marketing and less and less into brand, especially as leadership changes meant that priorities shifted. Covid also hit the insurance sector hard, leading to a pullback in brand advertising.

“It ended up creating a classic case study. It doesn’t happen very often when a business has a strong brand, basically turned it off and just did acquisition, and suddenly we could see in the acquisition numbers that it was not as effective as it was.”

When Ed joined the business in December 2022, the business had acknowledged the problem and the case for acting on brand was very clear.

Both Ed and CMO Fiona Mayo acknowledged the strength of the existing brand work, but felt it had some limitations. It had very much previously focused on white-collar professionals in the London and south-east area, which was coming across as exclusive, elitist and masculine.

“It was not as inclusive as it could have been, and that was important because the shape of our small business appetite had been changing,” Ed says, noting that alongside management consultants, accountants and lawyers, growing customer bases included gardeners and hairdressers who rent a chair in a salon.

What Ed calls the “balancing act” was to “take the good bits, such as the humour, the tone and the look, and bring in a more accessible tone, then add a bit of modernity to it.”

Hiscox wrote a new strategy and used that to ran a pitch for a creative and media agency simultaneously. The strategy aimed to emphasise what makes the firm different from competitors, which is the sense of seeing people behind the policy and being a real specialist in its chosen segments of the market.

“There was a bit in the DNA of Hiscox in terms of having a bit more personality and humanity than the big insurers.”

He adds: “It really helps in the UK that the big insurers are quite po-faced in the UK. It is really fun to have a brand that’s pushing against that, and so we came up with a campaign idea that showcased that we really understand these businesses by showing what can go wrong for a business.”

Ed says that while it may sound simple for an insurer to talk about things going wrong, this is quite unusual in the category.

“There are so many along the lines of ‘we’ve got you covered’ or ‘we’ve got your back’. It’s all very fuzzy.”

The idea was to show what could go wrong, through what was termed “the most disastrous campaign ever”.

“We realised there was a quite a lot of creative fun in dramatising these disasters.”

Some of the ads are more traditional posters about disasters, but some formats really pushed the message by making the ad itself into a disaster. This included posters that looks like it’s been misprinted or is peeling off, or a Metro cover that looked like it had a printing error. The concept can also be translated to formats such as radio, with one ad featuring a parody of a famous track by the band Feeder, which aims to highlight the risk of copyright infringement.

“We’ve found that that message, told with humour, is a really powerful and repeatable creative technique.”

One reason for adopting such an approach is that the brand is never going to have the budget of an Aviva or an Allianz, as Ed notes.

“We need our money to work absolutely as hard as it can. Hiscox has always done creative work, but a lot of what Fiona and I did was talking to the organisation about how important it is to be bold, creative and unexpected.”

It is hard in financial services to do that, he argues, where firms have got “a lot of forces pushing [them] towards safe.”

In terms of the channel mix, Ed says that out-of-home suggested itself as a natural fit for the lead channel. This was partly because it was a medium that Hiscox was well-known for, but also one where it could punch above its weight.

The budget wouldn’t have stretched so far on TV, and would also have meant that Hiscox was “quite a small voice” amongst the other insurers.

“We chose a channel which wasn’t used massively by other insurers, so we could own it. That was our lead channel and we had some real big spikes of activity to get that kind of awareness up.”

Radio was the efficiency channel alongside out-of-home, a great format to be creative and interesting. These were supplemented with more targeted digital display and social media advertising, aimed at specific business verticals.

This created a two-speed approach to advertising, where the broader mass approach reached all small businesses with some wastage and a precise, targeted strategy underneath it which was more aimed at consideration.

At the same time, the search activities hadn’t been turned off.

“That’s still absolutely vital for harvesting the demand that we’ve created.”

While brand can appear nebulous and hard to measure, Hiscox was able to prove the return on such brand spending relatively quickly. The campaign targeted spontaneous awareness as the lead brand measure.

As he explains, this is the key factor in insurance, as a lot of business is generated through people who need professional insurance and people may search directly for “Hiscox business insurance”.

“That’s the real manifestation of spontaneous awareness.”

Hiscox had always done consistent brand tracking, speaking each month to a sample of SMEs and then reporting on a granular basis every three months.

“I’ve got a much more sensitive instrument there than I would imagine a lot of FS marketers have, who are only in market once or twice a year,” Ed explains.

The fact that Hiscox had gone straight from zero brand marketing to a full-on campaign made the difference fairly stark.

“We’ve seen spontaneous awareness go up, and that curve has continued and is way above our expectations,” says Ed.

At the same time, perception of quality and approachability have gone up.

There are some particular measures in the acquisition funnel that reflect the brand-building effects, such as searches for “Hiscox business insurance”. These people are also much cheaper to acquire than customers who have just searched for business insurance. Click-through rates from pay-per-click also showed an increase after the brand campaign.

What Hiscox is moving towards in its measurement is regression analysis, which is the gold standard of measuring effectiveness. This models results in relation to different variables in order to try and isolate which variables are having an effect – in this case, price relative to competition, PR, product changes, service levels and website downtime, for example.

This will deliver insight into which parts of the campaign are working best, allowing Hiscox to optimise accordingly and move spending around.

Formative in the approach was research showing that Hiscox’s customers were actually no different to other segments. At the same time, IPA research shows that campaigns with wastage targeted to the broadest audience have higher effectiveness.

All of this made the case for targeting a broad audience.

“We weren’t worried about that from a marketing point of view,” says Ed, “but it takes a bit more explaining from an internal point of view actually.”

However, where the out-of-home advertising was placed was fairly sophisticated, targeting specific areas where more smaller businesses are based.

Did Ed view the campaign as risky? For example, spending money on an advert that features a misprint of Hiscox’s logo could be seen as a waste of money.

“The risk of not being creative is bigger. Whenever you’re thinking about risk, you always have to be thinking of the risk of not doing interesting things.”

He references a recent Mark Ritson article in Marketing Week that defends Tesco’s controversial decision to omit its name from its recent billboard ads, instead spelling it out using the initials of pieces of fruit and relying on its three dash symbols to generate recognition. Perhaps slightly unintuitively, creating a cognitive effort for viewers enhances memorability and makes it more likely that they will remember an ad or brand name.

Ed also likes what it says about the “body language” of the business.

“It makes you think positively about the confidence of the business, and in financial services you know you want to have a confidence in the business.”

Looking ahead, Hiscox plans to build on this work, not changing approach because the team has got bored.

“We are going to stick with what is working, and optimise based on the learnings from our econometrics,” says Ed. “We’re not going to be the marketing team who says: ‘should we do another campaign, I’m a bit fed up of this one’.”

They will add new messages, such as focusing on copyright infringement, as well as more efforts targeted at specific verticals.

Home insurance will be a major area of focus – the audience here is more niche as it tends to be wealthier people who have valuables to protect.

There was also the John Cooper Clark work earlier this year, where Hiscox teamed up with the Manchester-based punk poet for a series of comical poems about small business disasters.

“The John Cooper Clarke thing was a huge success in terms of the scale we got for the spend, so we want to do more in the PR sense next year. It supports the positioning of difference versus the big corporates.”

Ed adds: “Basically the test is, ‘would Aviva do it?’ If the answer’s no then it’s probably good for us.”