Insurance image improving but what else needs doing?

The insurance industry has made vast strides in improving its public perception but more needs to be done and brokers have a major role to play, says a panel of industry heavyweights.

The panel gathered on Friday at Sydney’s AICLA/ANZIIF Claims Convention to discuss the public attitude to insurers and claims, with consumer awareness of insurance’s role a hot topic.

Insurance Council of Australia Executive Director and CEO Rob Whelan says consumer research performed after the 2011 Queensland floods showed people felt positively about insurance.

“They think it’s important, they think it’s a good product and they think it’s essential for protecting their lifestyles and their assets,” he says.

“What they don’t like and what they found disappointing was how we were performing against that promise.

“In 2011 over 50% of policies didn’t cover flood. As a consequence we had a very high level of denials so we were out there telling people ‘Sorry, your product’s not going to save you here. You’re on your own.’”

Meanwhile, Whelan says when the same places flooded in 2013 with even greater damage, 90% of policies had flood cover.

“The level of disputation, out of 98,000 claims is 22. Not 22,000, not 2200, but 22,” he says.

“The reason for that is 99% of claims were accepted. That’s a fundamental shift.

“The conversation in the media went from ‘You bastards. You don’t pay, you don’t deliver, you look for the fine print and how to get out of it’ to ‘How can we stop this from happening again? Mitigation’.

“The whole conversation, and the whole perception, changed because we delivered. That’s what we’re focusing on; getting people to understand what their policies are, being clear about what they can expect us to do and for us to deliver on that promise.”

Whelan says part of that is improving financial literacy in the community, something the ICA is attempting to tackle when it launches its Understand Insurance website this quarter.

Steadfast Strategic Partnership Manager Graham Cassidy says brokers can do more to burnish the perception of insurance.

“Brokers are incredibly powerful advocates in the time of a claim,” he says.

“In reference to the floods, managing expectations is one of the key issues there. Brokers can certainly do a lot more to help clients through that process and to manage their expectations.

“I think it is really important clients understand early in the process if there is going to be an issue and how you might be able to help them through that.”

During a keynote presentation earlier in the day Zurich Australia and New Zealand General Insurance CEO Daniel Fogarty hit upon a similar topic, drawing on a Australian Readers Digest Most Trusted Professions that found insurance salespeople ranked below sex workers and talkback radio hosts in trustworthiness.

“I actually think it’s not just brokers; it’s just that brokers are at the sales end of the whole industry,” he says.

“We do things right a lot of the time but the things that don’t go right are the ones that sell newspapers.

“That’s why I encourage people to talk about being proud of the industry they are in.”