Car insurer pioneers ethnic targeting

Salaam Halal is the first insurance provider in the UK focused on providing insurance tailored to the British Muslim community. All of its products are based on Shariah principles and are approved by a committee of Shariah scholars.

As a new brand and a new product, the launch campaign needed to be able to combine targeting of Muslims with the need for car insurance. Direct mail was used as the first-stage recruitment vehicle. Despite the challenges of identifying ethnicity while remaining fully compliant with the Data Protection Act, a new data enhancement product was developed which delivered a strongly positive response rate.

To launch a car insurance product designed for Shariah Muslims presented a challenge for Salaam Halal’s data service provider, Acquity. It needed to identify individuals living in areas with a high density of Muslim population and also those living outside these areas. Muslims in these areas are typically third or fourth-generation residents who are more likely to own a car.

The client provided data based on Census and postcode to estimate the size of the market. An independent research company also provided a framework for mapping integration with the British community and level of maintaining ethnic identity. Those identified as assimilated have the strongest propensity to buy the product.

Remaining compliant with the DPA, which places stringent controls over use of sensitive information such as religious orientation, was a key issue. To ensure compliance, Acquity held meetings with the Information Commissioner’s Office which provided guidance on how to develop the project.

Acquity created a new targeting system for Salaam Halal which was able to search geographical areas likely to hold a Muslim population. It applied algorithms to look for certain letter combinations in first and last names which are distinctive to UK citizens of African, Far-Eastern, Middle Eastern and Asian origin. A score between 0 and 100 was then applied based on the likelihood of these letters to indicate a person of Muslim orientation.

As an example of how this approach discriminates between individuals, the name Shelia Ali would score lower than Samina Ali, but higher than Sheila Allen. Modelling was also carried out to indicate acculturation, by analysing names for having been changed and names currently used, which indicates generations in the UK.

In addition to identifying ethnicity, Salaam Halal also needed to identify a propensity to buy car insurance. A prospect pool was created using home and car insurance renewal data. This was then scored using Nomadd to create the combined targeting of ethnicity and propensity. On top of this, decile analysis was carried out and frequency capping rules applied to ensure the contact strategy would be optimally effective.

To prove the indicative nature of Nomadd as a targeting tool for both propensity to buy car insurance and likelihood to be a Shariah Muslim, the campaign results were benchmarked against industry averages, given the absence of historical responder data. This showed that higher Nomadd scores had a better response and conversion rate. Among individuals scored 50 to 100 by the system, response rates were 328 per cent higher than among those scored 0 to 49, proving that the tool is predictive and indicative of the required audience.

Using a 30-day matchback showed that response to the launch mailing was four times higher than target, a considerable achievement for a cold mailing. Since adjusting the price point for the product, conversion rates have doubled.

Developing a targeting system that enabled Salaam Halal to find a target audience for its new product launch presented unique challenges. With no direct data available, because of the restrictions imposed by the DPA, a new approach had to be developed that would gain the approval of the ICO.

Since launching the brand via direct mail, Nomadd scoring has also been used to score other media channels. As a result, marketing activity via door drops, regional press and outdoor has been made more efficient, accurate and responsive.

(This campaign won the Data Strategy Award for Best Use of Data for a Financial Product 2009.)