Question & answer

How do Hiscox’s direct marketing campaigns conflict with supporting its retail brokers?
Daniel Binks, Director, Henderson Corporate, Henderson Insurance Brokers Limited

Annabel Venner, Hiscox Head of Marketing, replies:

Hiscox has always underwritten the vast majority of our business through brokers – and this will continue to be the case. However, we are also committed to developing our business through our different distribution channels.

There is logic in selling direct, as buying habits are changing and many customers see insurance as a commodity that can be purchased via the internet or phone. Independent research shows that an increasing share of the client base is prepared to purchase direct – both personal lines and SME commercial.

Promoting brokers
With direct marketing, our aim is to win mid net worth business from insurers that people are familiar with, such as Direct Line, Churchill and More Than.

The vast majority of our direct household business comes from these ‘standard’ insurers. We also want to target small commercial businesses who are happy to buy direct, and these tend to have low average premiums – approximately £400.

Our advertising campaign drives awareness for Hiscox and its point of difference versus other insurance companies. We have already had feedback that this increase in brand awareness has started to benefit brokers.

This year, for the first time, Hiscox’s direct advertising specifically mentions and promotes the broker channel. For example, this advert gives Hiscox contact numbers, but also recommends that people visit their broker to discuss the large premiums that are involved with business or home insurance.

We will continue to do this where the advert refers to a policy feature where clients will benefit from brokers’ involvement.

Eric Galbraith, BIBA Chief Executive, replies:

It is encouraging to see that Hiscox’s aimis to continue to write the majority of its business through its brokers. It is also great to see that they are promoting brokers within their advertising campaigns. This is clear recognition of the value of intermediated business and we believe that it is an acknowledgement of the service that brokers provide, along with the quality of business that is driven through this channel.

Brokers are key
It is important that insurers support the broker channel. Providing advice and choice is a key part of a broker’s USP (unique selling point), and we are keen to support Hiscox in their initiative to drive business to its brokers through its marketing activity.