Reinvigorate the insurance message in 2015

Banks more trusted than insurers. Discuss…

During the ABI Motor Conference on 2 December, one of the presenters stated that public trust in the insurance industry, at circa 20%, was lower than public trust in banks, those same banks that cost the taxpayer untold billions for their greedy and irresponsible business practices before the global crash in 2008.

Depressingly, there didn’t seem to be much reaction from 400 or so members of the audience. Perhaps a resigned shrug or two, but barely any mention was made of this sad statistic during conference chatter that day.

Is this stat a blip, or part of a wider and deeper malaise? To be sure, senior management teams have struggled with a soft market, low investment returns, regulatory pressures and cut-throat competition, especially in personal lines. Managing the balance sheet has been a top priority, perhaps the only priority, for CEOs since 2008, but protecting the balance sheet has cut little ice with customers.

Reputation management is, of course, a matter for all who work in the industry, but nowhere should this responsibility be more keenly felt than among communications professionals, both in-house and within the world of insurance PR. For 2015, there are a number of challenges for all of us who work in and care about the insurance industry.

Where are the leaders? Is there any CEO who people would pay their own money to listen to? There is a leadership vacuum at the highest level and a new Robert Hiscox is desperately needed. The industry’s standout leader is Tidjane Thiam of the Prudential, but he is busy conquering Asia and Africa, and sadly, the Pru doesn’t even write GI in the UK.
Are there any communications directors who sit on the executive committees of the insurance companies they work for? The evidence from our biggest insurers is that communications has been emasculated, victims of cost cutting and the relentless rise of compliance, with its tendency towards caution, not boldness. If communications isn’t on the ‘bridge,’ managing reputation, what use is it?
What is the industry famous for? We all know that insurance is socially useful, but why are we not doing more to tap into the big issues? For example, we need to re-engage the public by helping them to understand the nature of risk and the part risk (and therefore insurance) plays in the efficient functioning of our economy and society.
The industry is behind the curve on technology. Insurers have made a virtue of investment in digital, but where is the practical manifestation of digital technology on customers? It is patent nonsense that personal lines insurance is still largely focused on an annual renewable policy covering a single asset.
… and in external communications, with few exceptions, insurers do not handle the opportunity of social media well [perhaps compliance is again responsible].
Financial PR and communications mandates for the majority of insurers are held by very few outside agencies. It is unhealthy for the industry that power is concentrated in so few hands. Not only will this create conflicts of interest as the industry consolidates, pace Lloyds insurers, but these few agencies have grown fat on inertia, acting as a barrier to new entrants with different approaches to reputation management.
The UK regulatory environment is a mess and needs to change. Australia has one set of reporting standards, and one regulator. It is easy to compare peer group performance. How many regulators exert a measure of control over the UK insurance industry? FOS, PRA, FCA, European regulators, Westminster, the European Commission. Aviva’s half year numbers included four different measures for its capital position including two (IFRS and MCEV) for asset value per share.

These challenges are broad in nature and not all come under the ambit of communications per se. But the bald fact that we are less popular than banks must be robustly answered, and perhaps this gives insurance communications professionals, the agencies and indeed journalists who cover the sector, an incentive to row back against the climate of caution and reinvigorate the message in 2015.