I led a trio of daily newspaper reporters covering insurance astheir fulltime beat into the lion's den in Boston yesterday,moderating a panel discussion about the industry's poor reputationduring the annual conference of the Property Casualty InsurersAssociation of America. Read on for the insights and keen advicethey and many others at the meeting offered this reputationallychallenged industry.

The panel felt like a focus group, only instead of the sponsorsbeing comfortably separated from their critics by a one-way mirror,or watching the critique later on a video, the two groups wereliterally face to face.

I give a lot of credit to the journalists for flying up todeliver in person their frank assessments of the industry'scommunication shortcomings. But I also credit PCI for having theguts to convene the panel, since we all know the first step insolving a problem is admitting you have one.

Unfortunately, the room was only about half-full for our panel,when it was packed the day before when Rep. Barney Frank and SteveForbes spoke. Perhaps that was because many snuck out to join theBoston Red Sox championship party as the team's victory paradepassed right up the block from our Copley Square hotel.

More likely, however, the thinner turnout only goes to show thatmany in this industry are still in denial, unable to appreciate theimpact of their poor public image on operations, the politicalclimate and their bottom line. PCI and other groups still have alot of educating to do to convince all of their members to makereputational risk management a priority, or suffer theconsequences.

And consequences there are, as the three reporters who joined meon the podium were quick to point out.

Both Tom Zucco of the St. Petersburg Times and Becky Mowbray ofthe New Orleans Times-Picayune cited a “bunker mentality” on thepart of insurers, noting how difficult it is to get anyone inauthority to speak to them when catastrophes strike.

Ms. Mowbray noted “a big difference between the response oftrade groups and individual companies,” citing how the InsuranceInformation Institute was “a huge help in explaining the bigpicture,” while top insurance company officials were too oftennowhere to be found.

“Maybe that's by design,” she speculated. “The insurers want thetrade groups to take the hits, while it's really hard to reach thekey people on claims, with everything they say vetted first bytheir attorneys.”

Beatrice Garcia of the Miami Herald said it was “hit and miss”in getting insurers to comment, with the top dogs at smaller, localcarriers far more accessible than CEOs and claims managers at thenational giants. However, she also complained about “informationfrom the insurers getting filtered through media relations,”calling PR intervention “counterproductive. I want to speak withthe actual people responsible.”

She noted that during the Northridge earthquake in California,she interviewed the president of Fireman's Fund on his mobile phoneas he drove through the devastated area, describing the damage hewas encountering. “That kind of access and response is all toorare,” she said.

All three noted that they are inundated with calls and e-mailsfrom disgruntled and often desperate policyholders, who are eitherconfused about their coverage or angry about a claim that's onlypartially paid or rejected outright.

“Readers ask us what to do, but we're not their insurers andwe're not their attorneys,” said Mr. Zucco. “But it shows howdesperate people are for reliable information, which they are notgetting from their carrier, their agent or their government much ofthe time.”

The flight of carriers from a market devastated by a disasterdoesn't do much to improve the industry's image, the reportersagreed.

“Those who get paid are grateful to their insurers, but manybelieve the insurance industry is making it very difficult fortheir communities to come back, as claims are not fully paid,carriers disappear from the market and rates soar,” said Ms.Mowbray.

“What people feel about the industry is reflected by what theysee on their bills,” she added. “They see higher deductibles,higher premiums and less coverage, if they are offered a policy atall.”

Mr. Zucco added that reader complaints about the industry spikeafter his newspaper published insurance company earning reportsshowing profits soaring while their coverage shrinks and premiumsskyrocket.

The two Florida dailies represented on the panel tried to bridgethe information gap by holding public forums and roundtables tobring together people from the community and the industry withregulators and political leaders. Both published edited versions ofthe discussion in their publications, with full versions appearingon their Web sites. They urged insurers to initiate more suchpublic forums with local media after catastrophes strike to clearup confusion, give out information and explain the marketimpact.

“This provides an opportunity for the industry to get the wordout, present its point of view and suggest possible solutions,”said Ms. Garcia. “It's a chance for them to get their message outuncensored, instead of complaining about only getting a fewsentences into a news story from a much longer interview.”

The reporters also urged insurers to speak English, rather thanconfusing journalists and readers with technical jargon. “Mostpeople hear the words 'actuarially sound' and they think you'retalking about a body of water,” said Mr. Zucco.

According to Ms. Garcia, “where the industry gets its biggestblack eye is when mishandling claims. Word of mouth spreads fast onbad claims experiences.”

One suggestion to enlighten the public was imbedding reporterswith adjusters assessing claims in disaster areas, but the resultsof actually doing so were mixed–at least from the industry'sviewpoint.

Ms. Garcia related some very positive experiences riding aroundwith adjusters following the Northridge earthquake. But Ms. Mowbraynoted that a colleague accompanying an adjuster on a HurricaneKatrina claim witnessed a policyholder break down in tears whentold their loss was flood-related and therefore not covered by thecarrier, and it turned out the insured did not have federal floodinsurance, either.

However, the two agreed that going out on a number of adjustingcalls would show the media and the public what the industry is upagainst working in a veritable war zone following a naturaldisaster.

The day before my panel, David A. Sampson, PCIs president andCEO, meant to state his commitment to improving the industry'simage during his first public address, but due to time constraints,the former deputy commerce secretary was forced to cut that sectionout.

That's really unfortunate, because Mr. Sampson seems torecognize the depth of the problem, and it would have been apowerful message to deliver to his membership. But at least PCIauthorized the release of his full written remarks following thespeech.

In his text, he called insurance a “misunderstood industry,”adding that too many consumers perceive the industry to be theirenemyan unresponsive monolith of corporate greed that is moreconcerned about profits than people.

In his speech text, he said this public perception issymptomatic of a growing wave of economic populism nationally andconsumer opinion about the industry in many parts of the country,especially in coastal areas prone to natural disasters. He citedthe industrys poor image in the aftermath of Hurricane Katrina asone major cause undermining insurer credibility with both thepublic and policymakers, and pledged to work to turn publicperception around.

I am not nave enough to think the industry can wave a magic wandand convince the vast majority of the public to love us, he wrotein his speech text. But I do believe that by focusing on thefundamentals of our industry and through more effectivecommunications with consumers and public policymakers, we canrestore their trust in the industry and their respect for ourcontributions to personal safety and economic security.

He conceded that enhancing our public image and reputation willnot be easy, nor will it occur overnight. But it is possible, andwe must make this a priority for PCI and the industry.

To be fair, besides convening this tough love panel ofjournalists, PCI has been fairly active in addressing theindustry's image problem.

The day following my panel, their presiding chairman, TomTierney, the president and CEO of Vermont Mutual Insurance Group,noted in his report to the membership that the PCI board had “hiredone of the nation's premiere pollsters, Frank Luntz, to conductextensive public opinion research so that we could betterunderstand why consumers felt they way they did and what actioninsurers could take to change public opinion and set the stage foran open and honest public policy debate over realistic long-termsolutions to Florida's property insurance problems.”

The research “identified several strategic initiatives in theareas of storm-proofing homes, encouraging market-based reforms tothe state's regulatory system, and developing a limited federalrole in financing catastrophe risks, all of which appealed toconsumers,” while “helping us learn how to explain the benefits ofthose initiatives to consumers that were free of industryjargon.”

Following up with another study to show the dangers of thereforms the state had imposed, “the report served as the basis fora series of editorial boards that PCI staff conducted with majordaily newspapers throughout the state, and helped restore thecredibility of the industry in discussing how to rebalance Floridapublic policy.”

Mr. Tierney added that “our industry's ability to be 'for'something was also noted as helping significantly. Such effortshave restored the industry's ability to challenge the governor andother political figures when their pronouncements are imprudent anddo not protect consumers.”

Mr. Luntz, chairman and CEO of Luntz, Maslansky StrategicResearch, engaged PCI members on the industry's image for an hourthe day before our panel, and didn't pull any punches.

“Insurance is about security and protection,” he said. “Butpeople perceive that the insurance industry is not only ignoringthem, but is openly hostile to their needs.”

He said that “if I had been running your message, I would havebeen running ads and having your top officials making personalappearances right after Katrina, to say you are there to helppeople recover and rebuild. Instead, most people felt you wereabandoning them, avoiding them and running away from them.” Headded that “I would have had your top people all over SouthernCalifornia” in the wake of the recent wildfires.

He noted that insurers “are so good at numbers, it's a shame youare not so good with words,” advising carriers to “speakaspirationally. You are dealing with people when they are at theirworst. You need to give them hope that whether it's their home orcar or business that's been lost, you're going to help them make itbetter.”

Emphasizing that “words matter,” he asked: “Do you sound like aperson or a corporation when you communicate with yourpolicyholders?” Later, he lamented, “don't read me your missionstatement, because that's corporate. I want to see your missionaryzeal to help your customers.”

Observing that “insurers are quiet about what they do, whilelawyers are loud,” he suggested that “this industry is too quiet.You need to get louder, to show you care about what you do and thatyou're passionate about doing it right.”

So what lessons were the industry taught during the PCIconference–at least for those who were paying attention? Among thehighlights:

–Managing reputational risk must be a part of the standard jobdescription of every insurance company CEO, who–along with otherkey officials–must be accessible to the press and very visible atthe scene of every major disaster.

–Public relations officials should serve more as booking agentsto hook up reporters with company leaders to assure accountabilityand credibility, rather than merely be a conduit for pat statementsthat few pay attention to or believe.

–Insurers should more actively engage the press–and throughthem, the general public–by meeting with editorial boards andconvening community forums to respond to questions and clear upconfusion following a disaster.

–Insurers must do more than “just say no” to public policiesthey do not like or markets that are hit by disasters, proactivelyoffering alternative solutions that involve more than merely hikingrates or abandoning troubled areas.

On the other hand, Mr. Luntz noted, insurers might be doomed toforever be unappreciated because of the nature of their business.“You sell a product to protect people against bad things happeningto them, and only deal with them in a substantial way whensomething bad actually happens,” he said. “That's a perfect storm.It's a wonder you aren't worse off when it comes to publicperception.”