Why insurance is “boring”
In 1943, Abraham Maslow, an American psychologist, published a paper entitled “A Theory of Human Motivation” that proposed a hierarchy of human needs. These so-called higher needs, he argued, could only be satisfied if more fundamental needs have been addressed. The research methodology behind Maslow’s hierarchy – commonly represented as a pyramid –
has been challenged, but it is still a useful tool when considering the role played by brands of different types. Most of the brands that speak strongly to us are situated toward the top of the pyramid. But insurance is, for the most part, situated in the second layer of the pyramid, addressing our need for safety. 3
Maslow’s hierarchy of needs
Self-actualization
Esteem needs
Love and belonging
Safety needs
Physiological needs
Maslow offers a suggestion as to why insurance brands do not hold our attention for long. “When a need is fairly well satisfied,” he wrote, “the next prepotent (‘higher’) need emerges, in turn to dominate the conscious life and to serve as the center of organization of behavior.” This fits well with the common description of insurance as a low engagement purchase. “The
healthy, normal, fortunate adult in our culture is largely satisfied in his safety needs,” Maslow argued. “[I]n a very real sense, he no longer has any safety needs as active motivators.” These words were written nearly a century ago, but they still hold true today. Insurers are thus in the unfortunate position of addressing safety needs that are not, to most people, pressing concerns.
3. Indeed, Maslow in his paper identified insurance explicitly as a means to satisfy these needs: “[W]e can perceive the expressions of safety needs in … the common preference for a job with tenure and protection, the desire for a savings account, and for insurance of various kinds (medical, dental, unemployment, disability, old age).”
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