Direct Line tops ad spend 1998/99

Leading direct insurers appear to be increasing their spending on advertising to boost their market share, according to industry figures obtained by Insurance Times.

Direct Line has more than doubled its advertising spend for home insurance to more than £10 million in the year to June 1999 (compared to £4.6 m in the 12 months to June 1998).

The direct insurer, known for its snappy advertising jingle and trademark red telephone, also spent £1m more on advertising motor insurance this year rising to £6.6m.

Television adverts accounted for 93% of Direct Line's £10m promotional budget in 1997/8. But a high profile campaign using outdoor poster sites has reduced television's share this year to 63% or £10m out of a budget of £17m.

Chris Wermann, Direct Line spokesman, said much of the increase was related to the launch of new products including roadside assistance (attracting 300,000 new customers since last May), pensions and a credit card.

Direct Line's nearest rival in terms of advertising spending is the AA.

The motoring organisation has only marginally increased its £7m-a-year budget for advertising despite closing its network of high street shops and switching to call centres.

The insurer is spending slightly more on adverts for motor insurance but less on household.

AA spokeswoman Rebecca Hadley said it tended to switch its advertising “fighting fund” between television and other media to obtain the best results.

For example, the AA as a rule does not book television advertising on Sunday evenings, for fear that its call centres are skeleton staffed at that time and would be unable to cope, Hadley said.

Other direct insurers with a high advertising profile are Churchill £3.3m (£3m) and Privilege – although its spending dropped from £1.7m to £400,000 this year. A spokesman said that its advertising was “still up to strength”.

Figures for Guardian Direct's motor insurance advertising slumped £2.5m to £1m this year in the wake of its merger with AXA.

AXA, meanwhile, maintained its spending between £1m and £1.5m.

Overall spending by insurers on advertising slipped by almost £5m to £87.9m this year.