How insurers can insure their own reputation

There is no doubt that the insurance industry plays an important role protecting individuals and families, with providers increasingly trying to develop innovative products that meet the changing societal needs.

I recently spent some time judging some industry awards and it was refreshing to see some real passion and originality coming through in the insurance entries, in terms of the impact product campaigns have had on consumers and how this then delivered for the bottom line.

However, with the increasing importance and impact of social media and content to firms’ reputations, there are regular hurdles insurers face when managing how consumers see them.

The customer journey and experience are always vital, and often the weekend papers can have detailed case studies of how providers have allegedly failed their customers in times of personal crisis (something that obviously can be more compelling to read than a good news story).

Something that is being looked at more closely in the protection insurance market is how paid claims stats (critical illness, life insurance, income protection etc) are reported.

This isn’t as dry as it might sound, this will have an important impact on the reputation of the sector.

Firms regularly publicise across owned and earned channels how they pay ‘95% of claims / 99% of claims / all valid claims’ etc and figures from the ABI show the insurance industry paid out more than £5.3 billion in protection claims in 2018, a £200 million increase year on year.

However, journalists are becoming increasingly challenging around the paid claims figures and what they truly mean.

James Daley, MD of Fairer Finance has been open about his views that claims stats are ‘flawed’ and at present it is hard to define when a claim becomes a claim.

So what information is actually being fed to consumers and what do these figures represent about the overall reputation of insurance companies?

What is clear is that having a narrative and story behind what the claim stats say is becoming increasingly important as we start 2020.

This isn’t just for customer engagement but the overall reputation of insurance firms and the sector as a whole.

Trust and transparency are intrinsically linked to the issue, it is bigger than just generating a number, it represents what the firm stands for and how it treats and supports its customers.

The industry has come a long way in terms of how it publishes its successes but publishing paid claims stats in isolation is probably now not enough.

When transparency and accountability are now core components of any successfully managed reputation, it is time to start tackling the bigger issues around what these claims stats represent.

Kevin Carr, CEO of Protection Review comments: ‘The protection industry has published claim statistics for many years with varying degrees of success and recognition. For many, the overall purpose is to build trust for consumers, advisers and media, and grow sales as a result. These figures are used regularly by advisers, insurers, comparison sites and media as an indication of quality and with companies regularly producing similar numbers as each year goes by, they arguably become a little less interesting and a little less newsworthy.  To move forward it’s important the data continues to be fair, accurate and interesting. With similar numbers coming out from a range of companies there is now a sense of ‘What next’?’

James Daley, Fairer Finance is hopeful that something positive can be achieved for the industry if there is collaboration: ‘Customers need to judge a firm on something other than price, and if we all have the appetite to work together we can achieve something really positive.’

Time will tell if 2020 is the year to make that happen.

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