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LETTER FROM THE EDITOR

Burn Or Burnish?

Brand is burned on your skin.

The word “brand” comes from an old Germanic form of “to burn.” It was associated with the mark that was burned into the skin of animals and later stamped on products.

It is no secret that branding has become a top concern of businesses over the past century or so. Today, people have even become comfortable with speaking about themselves as brands.

But brand is not what a company or person says it is. Any statement starting “our brand is …” is aspirational. It is what someone hopes the brand will convey.

Content marketer Michael Brenner said in this month’s interview with Paul Feldman that his view of branding was redirected by a statement he heard more than 20 years ago: “Brand is something that exists in the mind of a consumer. You can’t intercede into their brain. You can only try to influence it.”

Brand is not the logo, but the action.

Today, brands are not burned but earned.

You Are What You Do

Expectation is the root of the brand. We expect Coke to taste a certain way and when it didn’t with New Coke, the company had to scramble for its life. Even when we see people we know, we expect them to behave a certain way. And if somebody is always funny, we will probably smile a little just upon seeing that person.

One of the reasons companies are having more difficulty in marketing is that consumers have become cynical, largely because they expect companies are lying.

For example, guess which company’s mission statement this is: “Connect, Protect, Explore and Inspire the World through Aerospace Innovation.”

Boeing. After two 737 MAX crashes within six months and the information that has come out since, it is difficult to believe Boeing is protecting and inspiring the world through aerospace innovation.

This is a company whose own workers said it was risking people’s lives by cutting corners, deceiving regulators and lying to airlines. One worker said the 737 MAX was “designed by clowns, who in turn are supervised by monkeys,” according to an internal email released from within the company.

Boeing’s failures damage not only its own brand, but also the image of the United States worldwide. Marketing and brand-burnishing are not going to undo that company’s self-inflicted damage any time soon.

In the financial space, this advisor had a mission statement that gleamed like gold.

“In an era of faceless organizations owned by other equally faceless organizations, [advisor name] Investment Securities LLC harks back to an earlier era in the financial world: The owner’s name is on the door. Clients know that [advisor name] has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm’s hallmark.”

That advisor’s name was Bernard L. Madoff, the perpetrator of a $65 billion Ponzi scheme.

Rules As Rehab

The insurance industry has its own issues. This is a business built on an image of helping widows and orphans, but when it came to ensuring death benefits were paid, companies were not always so upstanding.

States had to sue many of the major companies to force them to check the Social Security Death Master File to see whether their insureds had died and pay death benefits to the beneficiaries.

It is not as if the companies were unaware the file existed. The investigation was “initiated after it was discovered life insurers used the DMF database to their benefit to identify deceased annuity holders, so they could stop making annuity payments to them, but failed to use the database to identify deceased life insurance policyholders and failed to pay benefits to their beneficiaries,” according to the California Department of Insurance.

It is difficult for consumers to feel as though they are in the good hands of a neighbor who’s there after that neighbor looked the other way when it came to fulfilling promises.

We can also point at tricks with caps, participation rates and illustrations as other practices that challenge the industry’s credibility.

In our main feature this month, we look at the implications of the regulatory squeeze being felt by insurance agents and brokers from new rules being shaped by various agencies on the state and national levels. Most of the rules have “best interest” at their center.

Client-First Standard

Regulators might feel they have a mandate because consumers don’t trust insurance companies for their practices and agents for their sales tactics. We all know that some agents might talk a good game about taking care of their clients but really are looking for the next prospect for a big commission and then moving on.

The image of an insurance agent at the kitchen table might warm the heart, but when I had one at my table last year, all he wanted to know was how much in premium I was willing to pay each month.

The suitability and fiduciary standards each have their proponents. But both areas have their wrongdoers. And both standards have their place.

The essential problem is the insurance brand has been tarnished over the past few decades by unscrupulous sellers.

New York’s new Regulation 187 holds insurance companies accountable for the actions of agents, which is difficult to carry out with independent sellers. But this problem creates opportunity for insurance marketers that can ensure agents are following documented procedures.  

Nobody wants to load onerous rules on the distribution chain, but regs like this can be a way to earn the public’s trust. Americans have an expanding retirement crisis that the insurance industry can help solve.

Being the hero would go a long way to burnishing the brand. It would certainly be better than being burned.

Steven A. Morelli
Editor-in-Chief

Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. Steve may be reached at [email protected] Follow him on Twitter @INNSteveM. [email protected].


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