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Blog by:  Ken Mogren, CPCU

A recent story in USA TODAY had insurance folks buzzing.  The article questioned whether or not using humor to sell insurance is effective. The article seemed to be prompted by the actions of some insurance companies who believe humor is not the way to go.

Insurers certainly spend big bucks on advertising. According to the USA TODAY story, “Geico, Progressive, State Farm and Allstate now rank among the USA’s 20 most advertised brands—outspending consumer-product giants such as Budweiser, Coca-Cola and Home Depot.” Anyone with a sense of humor has to get some good chuckles watching the Geico  gecko, Progressive’s Flo and Allstate’s Mayhem.

But does the money spent on ads pay off?  The article quoted an industry source who said that many people are hesitant to switch companies and that only about one of every 10 people who shop actually switch.  Two major insurers, Nationwide and USAA, were cited as proponents of a different approach, avoiding humor.

We would speculate that many buyers of insurance, at least subliminally, find humor inconsistent with the serious, complex nature of insurance and aren’t likely to make a purchase based on funny ads. We also wonder  if people who are drawn in by the ads eventually open up a renewal bill, realize that a good chunk of what they are being asked to pay will be spent on advertising, then go shopping for a lower price.

There are still plenty of funny ads out there, so some insurers are obviously still believers.  But, as in most matters of commerce, consumer buying patterns will ultimately decide the fate of such advertising.

Posted 10:24 AM  View Comments

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