Raising Standards is yet to make its mark

Despite public demand, the insurance industry’s quality scheme suffers from limited uptake and a lack of consumer awareness, says John Stones

The financial services sector has had its share of scandals, yet an attempt by the insurance industry’s trade body to set up a reassuring “stamp of quality” mark for its products has so far failed to win mass member acceptance.

This is despite apparent public demand. According to a survey carried out by YouGov for the Association of British Insurers (ABI) and published last week, consumers want a quality mark on savings and investment products far more than they do on electrical and dieting products.

However, of the major insurers, Standard Life has no initial plans to use the Raising Standards “P” logo in advertising and Legal & General and Virgin Money have shunned the scheme from the start, preferring to support Government-designed “squeaky clean” products such as stakeholder pensions and the forthcoming Sandler simplified products.

Norwich Union does use the quality mark in its TV campaign, but the logo merely appears, unremarked, on the end frame.

The pensions and savings industry is well aware of its poor public image. The ABI launched the “P” mark under the Raising Standards banner in 2000, in an attempt to ward off Government intervention. High street banks already have the Banking Code in place, and in 1999, the Government launched CATmarks (fair Charges, Access and Terms) standards for ISAs and mortgages, although the scheme has struggled to capture the imagination of consumers or providers.

Raising Standards takes as its template Woolmark, the highly successful clothing quality mark, set up originally by Australian sheep farmers. It was created to provide a quality mark that would increase consumers’ confidence in purchasing complex financial products.

According to the YouGov online poll of 2,500 people, the scheme enjoys public support. Fifty-two per cent of respondents said they would like to see a quality mark for savings and investment products and another 41 per cent said they would like one for mortgages. Support for marks on non-financial products was much lower.

In 1999, when the Raising Standards scheme was first mooted, face-to-face research with 294 subjects, commissioned by the ABI, suggested that 83 per cent of people were more likely to buy a financial product if it was quality-marked.

The scheme is administered by the Pensions Protection Investment Accreditation Board. In return for meeting minimum standards for clarity and maintaining customer satisfaction levels of over 90 per cent – both of which have to be independently monitored – brands can use the P logo, developed by Fishburn Hedges, which advised the ABI on the setting up of the scheme. Earlier this year, the consultancy was replaced by PR agency Financial Dynamics.

Raising Standards covers 36 per cent of the industry by market share, with companies accounting for another 30 per cent in the process of accreditation. Despite the fact that an estimated 10 million people are already covered by the scheme, recognition outside the narrow confines of the industry is almost non-existent.

Standard Life is currently going through the accreditation process. Marketing manager Andrew Black accepts that profile is an issue: “There is no consumer recognition. That is not a criticism, it is just where the scheme is at present.”

Norwich Union head of external relations Rob Davies believes the logo’s appearance at the end of his company’s ads is a good way to begin building awareness of the scheme.

But Virgin Money marketing manager Graham Maw says: “The main reason we didn’t want to join the scheme was that the standards required weren’t high enough. There is a danger that it will raise expectations rather than standards.”

There is also scepticism among advertising and brand agencies about Raising Standards. Paul Gordon, managing director of specialist ad agency CCHM, is scathing about the scheme, saying it is useless if not supported by a generic campaign, and criticises Norwich Union’s use of the logo in its television ads. “It is nonsense. The company should either use it and explain it or not bother at all,” he says.

For Raising Standards to be a success, Gordon says it is vital that the scheme’s benefits are communicated so that it reaches a similar level of reassurance to the Association of British Travel Agents’ bonded scheme, under which the body undertakes to rescue holidaymakers if their travel company goes bust. “People are nervous of buying holidays without the ABTA mark,” points out Gordon.

Rita Clifton, chairman of brand consultancy Interbrand, agrees, saying that the most successful accreditation schemes have either – as in the case of Woolmark – been established by extensive generic advertising campaigns to become aspirational brands in themselves, or – as in the case of the Soil Association or Fair Trade logos – have established their ethical credentials through operating as quasi-NGOs. Clifton suggests that an industry scheme such as Raising Standards will carry the taint of vested interests without the endorsement of a recognised and credible third party.

But Raising Standards is still searching for outside endorsement and a generic campaign looks increasingly unlikely. Stuart Tragheim, the project director for the scheme says depressed markets mean there is very little money available. “Companies want to invest in their own brands rather than contribute to a multi-million campaign which is just not appropriate at the moment,” he says.

It seems, then, consumers will have to carry on waiting for a truly universal insurance product accreditation scheme – unless the Government takes matters into its own hands.

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