In the past year, there have been 168 complaints about insurance company advertising, according to the Advertising Standards Authority. Of these 15 were formally investigated, with the complaint upheld in six cases.

No one in the insurance industry believes customers are deliberately misled, but if such a large proportion of people believe marketing is dishonest, then either the marketing methods are not clear, or they are misleading.

We all work with increasing pressures, but to what extent do we pass these on to our marketing departments? What demands do we make? Are we pushing marketing professionals into making exaggerated (some would say unethical) claims for products?

Advertising claims
Claims made in advertising are not forgotten quickly by consumers. This is particularly true of premium priced products, which require a high level of service.

Product literature is important because, very often customers rely on such information when making buying decisions. Companies that promise more than their products can deliver will suffer serious damage to their brands. Similarly, companies run the risk of brand damage by not using plain English, or by straying beyond Financial Services Authority (FSA) guidelines,

Brand value is built on consumer trust, yet financial services marketing appears to be based on fear and greed.

Trust in a brand can be established only by clear communication, realistic promises and good service. Feeding consumer fears and taking advantage of their propensity for greed is not part of this, so why do we persist?

Greed instinct
Past performance of funds has no relevance to future performance and yet it continues to be used as a sales aid. Why? Because it works. It appeals to the greed instinct.

So are we purposely misleading people, or do customers willingly participate in this deceit? It may be that their own wishful thinking, encouraged by our use of irrelevant facts, distracts them from making rational purchasing decisions.

It is important that we break this cycle and take a more ethical view of marketing. Products must be relevant to consumers, and internal values should be reflected in external marketing.

Business decisions are never neutral in an ethical sense. Corporate responsibility goes beyond charitable donations; it runs through the very core of business.

Furthermore, if third parties are involved within our businesses, it is important that our brand messages and our ethical stance are accurately represented.

For example, this third party brand representation in claims plays a vital role. Loss adjusters represent the brand in their customers' homes. This is a critical area of customer interaction with the insurer's brand.

We know the moment of truth for an insurance policy - when product promises are tested - is when the customer makes a claim. The product will have been sold, partly as a result of the quality of the claims service, which will be usually provided by a third party.

Effective delivery
To ensure that the brand is delivered effectively and to translate the ethics of the insurer's brand into the actions of a third party claims handler we return to communication. This time it is between the insurer and the service provider. We need clear communication to be confident that commercial pressures sit comfortably with the ethical approach of ensuring promises are delivered.

Ultimately, good ethics helps build trust and so reinforces brands. It could well be the most powerful weapon in the marketing armoury.

  • Jonathan Clark is an international business solutions group vice president. John Hay is marketing and product director for Buildstore.