Insurance Flipsides: Countering the Industry’s Negative Perception Problem

By | May 10, 2018

The editors at Wells Media have long noticed that the insurance industry is viewed rather negatively by “civilians” – your customers. As a result, we are beginning a regular series of columns, called “Insurance Flipsides,” which will highlight the many ways the industry and its practitioners make positive contributions to society – both professionally and personally. We’d like to get your help in collecting these stories, so please keep reading!

The insurance industry has a serious public relations problem. I’m sure you’ve noticed.

Have you ever been asked what you do for a living and found yourself hesitating before answering because you suspect wearily that mentioning a career in the insurance industry would be a conversation stopper? Perhaps you bravely declare your line of work and get reactions ranging from general apathy, to eye rolls, to sympathy, to sarcasm. “Oh, that must be fun.”

Have you ever gotten the feeling that the public views insurance professionals as negatively as other alleged bottom feeders: bankers, lawyers, politicians, real estate agents, and – oh, the horror – journalists?

Common complaints about the industry include: insurers don’t pay claims (as a result of exclusions in the fine print) and insurers raise premiums after an auto accident (involving policyholders with previously unblemished records). Sadly, the list is long.

There also is the perception that the industry is a necessary evil: “I’ve paid years of homeowners’ premiums, and I’ve never had a claim. I could have been putting that money into my bank account and pay the claim myself.”

Many civilians think the industry is boring. Remember Ned Ryerson, the insurance salesman in the movie “Groundhog Day?” I also would have crossed the road to avoid his annoying sales pitch. But he was just an archetype for an industry stereotype.

Let’s face it: a large part of customers’ feelings about the insurance industry depends on whether they’ve had a negative or positive experience with their points of industry contact – sales and claims. Was the process easy or was it difficult? Did their claim get paid, or didn’t it? Did their premiums rise, or did they stay level?

These negative perceptions, or stereotypes, even wash over journalists who cover the industry; it’s certainly a message I’ve heard frequently over the years. I must emphasize, it’s not just me – a straw poll of colleagues in my company and industry public relations people (who often are former journalists) revealed similar encounters.

Sometimes it even gets personal.

Late last year, a friend vehemently criticized me for my chosen profession. “How could you work in such an industry with overpaid, fat-cat executives, who take junkets in exotic places and have jobs that don’t contribute anything to society?”

He angrily said the costs of all those excessive salaries and liberal expense accounts trickle down into premiums, which “we all have to pay for.” “If I had a chance, I’d give those guys a piece of my mind,” he shouted.

As I slowly put my beer down on the table, I tried (and, no doubt, failed) to explain my experience of the industry I write about – the flipside to this negative viewpoint.

My friend gave me a roasting about my chosen career, even though I don’t work in the industry, I just write about it. It was classic guilt by association. I can’t blame him though. He was simply articulating a common perception that many people have about the insurance industry – your industry.

Although it was a difficult conversation, I should probably thank my friend because it created a positive result. It led me to ask: Is this a fair perception? Are the industry and its practitioners as ghastly as he suggested?

And then, I wondered what could be done to counter the industry’s serious public relations problem.

Perception Creates Reality

Perception – fair or unfair – creates reality, and with the prevalence of such negative viewpoints, how will the industry be able to attract young, talented people as the Baby Boomers retire?

Indeed, many insurance executives admit that the industry does a dismal job of selling itself.

And what of those thorny questions that came to mind after the conversation with my friend? Was his negative perception of the industry fair? As perception is reality, I would have to say, yes, his perception is fair. He’s certainly not alone in his feelings – and, you, industry practitioners clearly have done a poor job at selling the value of insurance, at changing his mind and the minds of many of his fellow consumers.

The insurance industry certainly has its problems – with public relations, with cumbersome back-office systems, with high expense ratios, a lack of transparency, product inflexibility, and with selling the value of its value-chain. Sometimes claims aren’t paid and sometimes premiums do rise, even for motorists with unblemished records.

It gets more complicated if you ask whether my friend’s perception ultimately has merit. Insurance has been called the DNA of capitalism and is certainly the engine of globalization. We can all debate the merits of capitalism in a globalized world, but one thing is certain: our international and local economies would grind to a halt without insurance.

Planes wouldn’t fly; ships wouldn’t sail, and trucks wouldn’t travel the roads to deliver your online order, which you made just last night, on your laptop built in a factory covered by property and business interruption insurance with product protections ranging from liability to cargo and everything in between.

When your faulty laptop sets your house on fire – you’ll be on your own without insurance. When you crash your car on the way to your temporary post-fire accommodation and seriously injure another driver, without your auto coverage you’ll be on the hook financially to replace your car and for your personal liability.

A Brief History of Insurance

Insurance was born of a need to manage risk. Without insurance, many business ventures would never get off the ground. Few entrepreneurs want to risk the financial damage or even ruin associated with international trade and will consequently look for ways to manage that risk. This is the case now, as it was many centuries ago when humans first began sailing uncharted seas.

The root of all branches of modern insurance is marine insurance and it’s been around for more than 3000 years when the Phoenicians and later the Romans protected shipowners against the risks of their international maritime adventures. The early globalization of trade was particularly risky for merchants and shipowners, who often staked their personal fortunes on the safe return of their vessels.

Prior to the 1800s, most British companies were one-man or family affairs – thus, the financial ability to set up a shipping line or participate in a foreign investment was limited to the fortunate, wealthy few. Insurance – particularly marine insurance – provided vital protection of their personal assets.

By mutualizing – or sharing – their risks, shipowners and merchants could survive a catastrophic loss of their vessels, cargo and crew – and their businesses would live to sail another day.

When Edward Lloyd opened his coffee house in London around 1680, it became a favorite haunt for underwriters and merchants to trade gossip, business information and, of course, to underwrite insurance. Although Lloyd wasn’t an underwriter, the name stuck after his death in 1713 through several owners and changes of address because it was so well known in the marine trade community. In 1871, Lloyd’s of London was incorporated as a society of private underwriters by an act of Parliament.

Sleazy Operators?

Why should we care about the industry’s interesting history or its value as a driver of the global economy – if it is filled with reprobates and sleazy operators who are in it just for the money?

In my experience covering this industry (for more years than I care to say), I have had the good fortune to encounter many people who care deeply about what they do, work hard at their jobs and try – and do – make a positive difference. Many give back to society on a personal basis with their time and their money.

As in all walks of life, there are excellent people and, unsurprisingly, some who perhaps are less excellent. One would hope that mastery and excellence are rewarded and those who are incompetent are shown the door.

Yes, top executives in insurance, and many other industries, make large salaries – some would say excessively so. But I’ll have to leave that debate to companies’ shareholders and boards of directors to determine whether their highly paid executives provide value for their money.

And yes, some industry meetings are held in “exotic places,” but most are held in ordinary towns across the world because insurers, reinsurers and agents and brokers follow their clients. I’ve attended all kinds of events from high-end to humdrum. Some executives travel 100-plus days a year, which makes business travel much less appealing and very unglamorous.

The Crux of the Matter

After this short consideration of the pros and cons of the industry, with a soupcon of history (so we don’t forget why we’re here) we come to the crux of the matter, the reason these words have been written.

Wells Media Group has launched a regular column called “Insurance Flipsides,” and we would like your help in finding stories about people in the industry who are making a difference, either professionally or personally.

This is not a PR exercise. We’re simply gathering proof of something you all know – that you work in an interesting industry, which has enormous societal value and makes a profound contribution to our global economy.

Do you know a company or industry practitioner that have made a difference to their communities? Perhaps you have a colleague who is tirelessly doing charitable work in his or her spare time. Do you have examples of insurance products that saved businesses from ruin, or helped them recover from catastrophic losses? Then let us know and we’ll see if we can write about them.

Here’s a chance for you to show the flipside of the industry’s negative perception. It’s time for the industry to stop hiding its light under a bushel, as they say. Here’s a chance for you to tell your stories and give young talent a reason to want to join this industry.

We’ll publish an “Insurance Flipsides” column, with a new story, every month. We hope you’ll help by sending your ideas to this address:, with your contact details.

Together, we can do our best to chip away at the industry’s negative perception, one story at a time.

Topics Market

Was this article valuable?

Here are more articles you may enjoy.

Latest Comments

  • August 21, 2018 at 3:35 pm
    Jestr says:
    The insurance industry is full of a bunch of snakes. Look at all the premium fraud the DOI prosecutes each week. There is also of faction of agents who will do anything to s... read more
  • May 14, 2018 at 2:02 pm
    Robert R says:
    I work in insurance as a broker (for over 20 years). So did my father. So did my grandfather. I think you are missing the point. Yes - the insurance industry and it's practiti... read more

Add a CommentSee All Comments (2)Add a Comment

Your email address will not be published. Required fields are marked *


More News
More News Features