A study released early last month that got some play in the consumer press was bad news for the insurance industry.
The survey, compiled by the American Association for Justice (AAJ), centered on a Top 10 list of the “worst” property/casualty, health, homeowners, auto and life insurers. The results were supposedly based on “an analysis of court documents, SEC and FBI records, state insurance department investigations and complaints, news accounts from across the country, and the testimony and depositions of former insurance agents and adjusters,” according to the press release — although in reality most sources came second-hand from consumer news stories. (Judge for yourself; the full study is at http://www.justice.org/docs/TenWorstInsuranceCompanies.pdf)
Because this comes from the trial bar – the study’s full, incendiary title is “The Ten Worst Insurance Companies in America: How They Raise Premiums, Deny Claims, and Refuse Insurance Coverage to Those Who Need It Most” — we need to take the results with a block of salt.
However, as a long-time reader of various insurance blogs — and years of listening to agents complain — I’m inclined to think that where there’s smoke, there might be fire. Although much of the bad blood and bad headlines surrounding the big homeowners insurers came post-Katrina, PO’d consumers have been publicly griping about insurers for years. Check out Web Gripe Sites (http://www.webgripesites.com and you’ll find consumer complaint links to virtually every industry and many top insurers.
Catastrophic events (and just everyday claims) should be opportunities for insurers, agents, adjusters and claims people to shine — and most of the time, they do. Unfortunately, when egregious examples of claims mishandling stink up the headlines, the taint permeates all of us.
Remember the mid-’80s “perception versus reality” ad campaign for Rolling Stone magazine, depicting hippie icons like Volkswagen microbuses (the “perception”) next to the “reality” of a shiny new Beemer? The perception vs. reality mantra holds true for insurance, too. But we need a lot more than a catchy ad campaign to save our bacon in the eyes of consumers — never more so than now, when the worst economy in years is in some cases forcing buyers to decide between paying the mortgage or paying insurance premiums.
As I write this, Hurricane Faye is making a lot of noise in Florida. Instead of perceiving events like this as public relations nightmares in the making, our industry should view it as another opportunity to do what we do best — make our policyholders whole again. That’s the best free publicity in the world.