PHILADELPHIA, PA.–The public has a poor perception of the insurance industry overall, but consumers have a less unfavorable view of individual companies, a polling expert told an audience of insurance company representatives.
Speaking at the National Association of Mutual Insurance Companies' (NAMIC) 2008 Annual Convention, Nicolas Boyon, senior vice president, Ipsos Public Affairs, said as of July, 44 percent of Americans held a very or mainly unfavorable view of the industry.
Ipsos, he said, has tracked insurance industry popularity through surveys of 1,000 people per month for over two years. As of July, 19 percent held a favorable view.
Since July, Mr. Boyon said, the numbers have deteriorated slightly, with 48 percent unfavorable and 17 percent favorable. The remainder of respondents held a neutral view.
However, results differ when respondents were asked about individual companies. Taking the average of responses on 40 different insurance companies, including 22 property-casualty insurers, only 7 percent of respondents held an unfavorable view and the favorable view increased to 24 percent.
Mr. Boyon noted that over two-and-a-half years, the worst rating for an individual company was 16 percent unfavorable.
The numbers look even more favorable for insurers when polling actual policyholders. In a case study conducted one year after Hurricanes Katrina and Rita, published by the Insurance Information Institute, Mr. Boyon noted that 9 out of 10 homeowners in Louisiana and Mississippi were satisfied with their insurance companies. Homeowners who had filed claims were equally satisfied.
Both Mr. Boyon and a member of the audience likened the public's view of the industry to its view of the federal government: People tend to like their local representatives but have an unfavorable view of Washington in general.
Thomas Dials, president of the Armed Forces Insurance Exchange, chairman of the Armed Forces Insurance Corporation and outgoing chairman of NAMIC's property-casualty conference, said in a separate interview that he believes the industry's reputation suffers because the business of insurance is easy to pick on and not well understood.
He said insurance is really a "financial transaction," not "an entitlement," and the industry has not done a good job of making that clear to consumers. Instead, he said, the industry has allowed itself to be defined by others, such as politicians and lawyers.
To counter this, he said the industry should work to create education programs in high schools and colleges that would teach young people what insurance is and how it works.
Mr. Boyon said insurers should find ways to leverage satisfied policyholders so that they advocate for their companies. Insurers should look to other industries that have found success in this area, rather than looking at other insurance companies, to find ways to get policyholders to bring in friends through word-of-mouth.
In comparison to other industries, Mr. Boyon said insurance is perceived more favorably than oil and gas companies, but is comparable to mortgage lenders, the federal government and chemical companies.
He also noted that, worldwide, the perception of insurance companies differs depending on the progress of economic development. For example, in the U.S., Great Britain and Japan, the industry is viewed unfavorably. In India and China, though, insurers are viewed very favorably.
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