Insurers have a long association with sporting sponsorship. But what benefits do they receive from ploughing in large sums of money? John Jackson reports
Whether your sporting preference is football, rugby, tennis, racing or athletics, it is difficult these days to escape the emblazoned logos of a host of insurance companies.
From Norwich Union's £20m sponsorship of UK Athletics to Royal & SunAlliance's recently announced £750,000 rugby community investment programme, the insurance industry seems fixated on sporting sponsorships.
But what exactly is the fascination? Is it an ego trip for the directors or is there a measurable benefit to the company? And does it have to be a "big bucks" sponsorship, or can smaller firms get in on the act?
The good news is that for those firms thinking of sports sponsorship, it is not just a rich firm's pastime. Indeed ,the government will match grassroots sports sponsors pound for pound from £1,000 (£500 for schools projects) to £50,000 through the Sportsmatch programme, administered through the Institute of Sports Sponsorship (ISS).
Since it was formed in November 1992, Sportsmatch has generated more than £55m in funding. It receives about £3m a year backing from the government, makes about 350 awards annually, and has helped fund more than 3,000 projects involving 72 different sports.
Royal & SunAlliance (R&SA) benefited from Sportsmatch funding when its £10,000 sponsorship of a Merseyside schools scheme, the five-sport Panathlon Challenge, was matched.
R&SA has also received £50,000 Sportsmatch backing for its £750,000 three-year sponsorship for 12 to 18-year-olds to take up rugby union from inner cities and areas of social deprivation, known as SEE U @ RUG B.
R&SA is a big sports sponsor. It sponsors horse-racing at Cheltenham and golf at the Royal & Ancient. It also has a Rugby Football Union (RFU) hospitality agreement.
One of the biggest sponsorships in the insurance world is that of the FA Cup by AXA. According to AXA spokesman Stuart Morgan, with its four-year £25m contract ending this season, its brand has shot up in the public mind.
But the Football Association (FA) is changing its sponsorship package. The FA Cup sponsorship will not be available in its current form, but moving towards a "family" concept of five sponsors across all its properties.
AXA is currently talking to the FA about the FA Cup, the FA Charity Shield, England team sponsorship, and women and youth football.
Broker-only insurer NIG is another sport sponsor. NIG opened an office in Scotland, and last year began sponsorship of the Scottish Thistles seven-a-side rugby competition, involving the popular former Scotland and British Lions captain Gavin Hastings.
However, marketing manager David Grant says companies have to be clear about what they are trying to achieve.
He says: "People don't always get it right. You need to know how to measure it and maximise opportunities. It must be part of an integrated campaign through marketing and sales."
NIG measures its sponsorship specifically by brand awareness among its key brokers as well as by how much business is generated. So far the sponsorship is proving successful as the company has reported strong business growth for 2001 for its Scottish office.
Norwich Union (NU) is heavily into this market, sponsoring UK Athletics and the Norwich Union League - the one-day Sunday county cricket competition.
NU commercial sponsorship manager Alistair Marks says: "The deal is worth £20m over five years. The existing contract runs from June 1998 to the end of this year. We have now agreed four more years - 2003 to 2006 - but we have acquired additional rights for the existing contract."
This additional right is a grassroots scheme called Agility Challenge, which enables NU to tour clubs and schools with equipment to organise track and field events. NU has had three other grassroots schemes in place for the last three years, and £4m of the £20m goes to these schemes.
Marks adds: "Sponsorship of sports really is, regardless of market factors, something that will always go on and provide an emotional output to consumers. In the light of recent events, both financial and around the world, it provides positive benefit to people's lives."
NU receives over 16 hours of television coverage for live athletics events to provide 30 million viewers over the year, and 30 live Sunday League matches on Sky TV. But NU sees the sponsorship in a wider context.
Marks says: "We chose UK Athletics because it is all-inclusive of sex, class and race. It is absolutely accessible to anyone who wants to take part - and has a 50-50 male/female split."
One of the most successful insurance sponsorships, which lasted for 23 years, was that of Cornhill and the Test matches, which began in 1978 and cost Cornhill more than £22m in fees.
Geoff Mayhew, who ran the sponsorship, says: "Its value was quite extraordinary. It raised the level of awareness faster than we had expected.
"The reason we ended our sponsorship was not because of the cost, but because we had no over-arching brand."
Cornhill is one brand, its parent Allianz is another and Pet Plan is yet another, making promotion of a single brand difficult.
So there is sports sponsorship to fit most commercial pockets, with government funding for the more modest outlays. For brokers, the higher profile in their locality makes it an attractive proposition to maximise the impact of their brand.
Does sponsorship score for insurance?
Sponsorship: FA Cup
Package: A four-year sponsorship, which ends in 2002. AXA also receives tickets for each game and can use the cup for certain events.
Aim of sponsorship: AXA was a fresh and relatively unknown name in the UK three and a half years ago and the aim, therefore, was to build the AXA brand in the UK.
How success is measured: Its prompted name awareness level has shifted from 36% of ABC1s to 76%. On a spontaneous recognition of the AXA brand, this has shot up from a start point of 3% and is currently 13%.
The FA Cup provides huge coverage, taking place over several months, making it outstanding value for money for one of the world's premier sporting competitions.
Sponsorship: Bristol City FC
Sponsor: DAS Legal Expenses
Cost: Not known, but probably six figures
Package: DAS receives ten corporate hospitality tickets for every match and ten staff tickets.
Aim of sponsorship: To build brand name outside the insurance industry. The company is a big employer in Bristol and it wanted to raise its profile in the city.
How success is measured: Its profile in Bristol has been raised considerably in the three years it has sponsored the team. The company says this has made a massive difference to recruitment. The company says the business benefits are "immeasurable", but says "it might add to the warm feeling people might have about our name".
The sponsorship is localised, but it is a good example of using a limited budget in a cost-effective way. Could provide considerably increased brand exposure (but more expensive) if the team is promoted to the First Division at the end of this season.
Sponsorship: Rugby union premiership
Cost: Not known, but it is likely to be substantial
Package: Sponsorship began in September 2000 and runs to summer 2003.
Aim of sponsorship: An opportunity to be associated with a broad ABC1 audience. A spokesman said: "The company believes this sponsorship is consummate with the profile of Zurich and is an opportunity to build a strong profile and media coverage.
"It helps to motivate employee and distributor partners and to develop community relations and business opportunities. It also provides the Zurich brand with a tangible presence."
How success is measured: Zurich says since it commenced the sponsorship in 2000 its overall public brand awareness has risen from 56% to 67%. In its target market, ABC1 it has risen to 70%.
This sport tends to be associated with the upper range (ABC1) of potential customers. It has already increased brand awareness and will enable Zurich to build a strong association over time.
Sponsorship: Rugby union young players
Sponsor: Royal & SunAlliance
Cost: £750,000 over three years (until 2005)
Package: Involves becoming sponsor of SEE U @ RUG B as well as a sponsor of England youth rugby.
Aim of sponsorship: It is a community investment programme and the aim is to attract more young players between the ages of 12 and 18 to the game from inner cities and areas of social deprivation.
How success is measured: Only announced this month, but it should help build R&SA's brand, although its aim is for below the line activity rather than to generate new business.
R&SA is a strong supporter of projects that encourage social inclusion. The sponsorship enables boys and girls to become involved in rugby, a sport which may not previously have been available to them.
Sponsorship: UK Athletics
Sponsor: Norwich Union
Cost: £20m over five years (to 2006)
Norwich Union will provide headline sponsorship of the major domestic televised meetings that include the European and World championships, the Commonwealth Games and the Athens Olympics - three of which will be hosted in the UK. More than 20% of the sponsorship is also invested in four grassroot and development initiatives.
Aim of sponsorship: The company says the sponsorship works at many levels, providing a platform for the marketing programmes supporting its brand, as well as giving it the opportunity to invest back in communities through the nationwide grassroots schemes.
How success is measured: Building the brand name.
This package involves the top end of the athletics competitions to the grassroots, and NU has provided 20% of its sponsorship to clubs and schools. This is a first-class, all-inclusive deal.
Sponsorship: Scottish Thistle seven-a-side rugby
Cost: Estimated by the Scottish press to be a five-figure sum
Aim of sponsorship: To raise profile in Scotland.
How success is measured: The Scottish office reported strong business growth in 2001.
Clearly achieves good publicity in Scotland and will generate much wider coverage at the Commonwealth Games. An excellent targeted sponsorship.