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Innovation Centre

Our view of today’s market is that when price becomes the key differentiator in any market, the race to the bottom is on. Improving profitability is achieved by adding value and differentiation.

All markets continually evolve; the successful are those who have a long term vision, set out their stall and make it happen. Steve Jobs

There is little emotional attachment to insurance brands, and aggressive price promotion has encouraged switching. Innovation within insurance providers has traditionally focused on cost saving and wording improvements i.e. it has been risk not client focused.

Moreover, the entry of large consumer businesses, such as supermarkets, into the market, with their massive consumer footfall and well-developed understanding of customer behaviour, has accelerated the decline of traditional insurance brand loyalty.

The insurance sector has significant information about its customers and works within the same data protection regulation as the supermarkets. The supermarkets utilise their data to deliver products to their customers that they either need or want. Insurance providers do virtually nothing with this valuable data.

Insurers are signing away their intellectual property by supplying white-labelled insurance to supermarkets through affinity deals, and also their potential to create fruitful customer relationships. What insurers have called ‘affinity business’ is misnamed as the genuine affinity is between the end-user and their provider.

The market has now realised that the aggregator model of chasing cheap is a one way street to losing money and is a race to the bottom. Insurer brand affinity and brand loyalty are declining as we now know that price does not buy loyalty.

The market has started to shift from being solely price driven to product/service driven. Insurers can no longer rely on inertia to maintain their retention levels; customers have become trained by the industry’s marketing message to switch providers regularly.

In summary, if you have won the business solely on price. you will lose the business on price. Improved profitability will be achieved by adding value and differentiation.

Setting out our stall – The Lumley Jacobs vision

Look at things differently – engage with your customers

Start viewing policyholders not as premium machines but as customers, who have needs and wants outside of their insurance requirements.

Increase retention

A 2% increase in customer retention can have the same effect on the balance sheet as cutting cost by 10%.

Utilise customer buying power

Take your total number of customers and multiply that number by the average household income (£40k). For example, a book of 30k customers multiplied by £40k = £1.2bn annual income.

Increase your customer spend

Our vision is to see the focus shift from Gross Written Premium (GWP) to a concentration on the Average Revenue Per Customer (ARPC).

Re-frame customer relationships and build loyalty

The decline in brand loyalty must and can be changed. Recapturing brand loyalty through customer engagement enables insurance providers to grow the lifetime value of their customers.


Most insurers will say their key differentiator is their claims service. Ironically, insurers work tirelessly trying to ensure that as few people as possible experience this (circa 90% have zero experience). Incorporating non-insurance products and services within propositions helps add value and differentiate from competitors. This also provides a platform for brand building, retention strategies, PR and marketing.

Increase touch points

At present customer interaction generally only comes at renewal or when customers claim – encourage customer interaction and implement positive customer engagement programmes.

Build brand awarenes

The insurance market is being detrimentally driven by multi-million pound advertising campaigns fronted by meerkats and opera singers. We think insurers need to get back to building their brands. Historically, advertising was (and still is) the prime medium for customer acquisition, but this is an expensive way to capture customers. Today, there are other more cost effective and innovative methods to achieve increased brand awareness. We are achieving this through integrating products and services and utilising engagement programmes.

Non-insurance add-ons and value adds

Generate additional income with products and services customers need and want.

In summary, we agree 100% with Steve Jobs…

  • The “market is evolving”
  • Lumley Jacobs has a “long term vision” and has “set out our stall”
  • We “make it happen”