Insurance firms, banks increase advertising as competition mounts

Increased advertising is used for survival and defending one’s turf in the market. PHOTO | FILE 

By BONIFACE NGAHU

Market Talk has said in the past that increasing advertising in an industry indicates two things. One is the increasing competition and, secondly, it could be possible that the industry has problems.

In both cases, intensive advertising is used for survival and defending market share. There is a trend of increasing advertising in banking and insurance industries.

In the insurance industry, I have noted CIC promotion in Timua Prime Mover campaign. In that promotion, insuring heavy commercial vehicles gives one a chance to win a prime mover.

Industry data from the Association of Kenya Insurers (AKI) indicates that CIC is the market leader in that segment and the company seems keen to defend that position. Based on historic trend, CIC is a contender for overall number one position.

Their recent top-level hiring from the competition prompted my investment bank research analyst to recommend that I buy the share. The other contenders for number one position are UAP Insurance, APA, Liberty and Britam at a distance.

We have seen UAP invest in interesting micro insurance models. I was running at UAP Ndakaini marathon where they have painted the town red. Their CSR game is on point which is endearing.

APA has the bragging rights for having paid the Kenya Airports Authority more than Sh1 billion claim for the JKIA fire. They have been advertising that now you have a billion reasons to sleep in peace if they are your insurer.

With expanding airport infrastructure, the company has placed itself well in that segment in addition to life business. Britam has the cash and they have been on the buying mode; they acquired Real Insurance resulting in a significant jump in market share.

They are also involved in other acquisitions and buyouts. They are also into micro insurance, and have good branding practices. Liberty numbers also look good. I suspect they understand counties well, which means their revenues can gain from devolution.

Women on boards

In marketing battles, they say it is hard to dethrone the king. Jubilee is the overall market leader and apart from having a similar name with the government of the day they are ahead in many ways.

One of their interesting ads is for a motor insurance for women, which says they are better drivers.

I added in an SME banking workshop that I hear they are also better leaders and they whispered, “It is true!” Other companies are also eyeing women car owners and it is not clear who copied who.

In banking, Barclays Bank’s strategic plan is to overtake Co-op Bank to be number three in the medium term. They won an MSK award for their deposit mobilisation campaign.

They are also tapping into women brains by including many of them on the board. Co-op has been expanding fast and say “We are you” but they also own CIC. Our ‘women on boards’ analysis found that their inclusion improves a listed company’s market responsiveness.

Chase Bank is offering customers millions, the Safaricom style, in promotions and KCB is tapping on Safaricom charm and SME customers through their joint offering dubbed Biashara Smart.

StanChart had an aggressive sale promotion, which, I suspect, will have a good effect on their loan book. They also own the king of the marathons in Kenya, which is a good way to engage customers.

Imperial Bank won several MSK awards for their loyalty programme and Arsenal sports marketing initiative. Equity is also busy getting into mobile money as their Wings to Fly programme on education wins passion points.

Market disruption is on the cards for insurers and bankers.

The writer is the marketing director of SBO Research. E-mail: bngahu@sboresearch.co.ke, Twitter @bngahu