Today at last, we saw the end of the Allianz direct and Cornhill direct brands selling car insurance direct in the UK. As it moves into an uncertain future, the company has changed its’ strategy to focus instead on selling through brokers.
A few years ago Allianz bought Cornhill insurance. At that point, Cornhill was a major player in the UK market which was focused primarily on the over 50’s audience. Many people will remember the old Cornhill as test match cricket sponsors, and at the time it looked like a fair future was set for the brand.
When Allianz Direct relaunched we were excited to see what a new player in the direct market would do, and whether the strategy would work. Initially things seemed positive. The brand achieved some serious growth during 2013 and 2014. This growth was partially due to an aggressive pricing policy on Price Comparison websites, and that policy was backed by some award winning creative direction.
The above graph shows the company’s momentum at renewal. A positive momentum means that you are gaining more customers than you are losing, but a negative one means the inverse. In essence, you are losing more then you are gaining.
The graph clearly shows that Allianz have been losing momentum for the last year and a half as they have struggled to get prices up.
What does this mean for other players in the Car Insurance market?
Allianz is a global brand with major resources and the ability to make long-term investments into the market. The very fact that they have exited so quickly indicates that this space is not for the faint-hearted.
Making an impact in the UK insurance market is tough. You need excellent brand experience, world-class analytics and organisational brilliance that gives you the ability to move with agility. Being big is not enough. Having a global brand is not enough. You have to be able to out-think, out-smart and out-pace the market. Allianz couldn’t. It’s a lesson worth learning.