Editor’s Note: Is the image insurance industry forever tainted in the public’s eyes?

November 20, 2005

Ipsos Public Affairs, a market research company, recently conducted an online survey of the public’s perception of the insurance industry in the wake of hurricane Katrina. While the 1,000 adults who responded hardly provided enough information for a scientific survey, the results are telling.

“While nearly all respondents approve of the job being done by charities and nonprofits, only 18 percent approve of the job being done by the insurance industry. Forty-three percent of Americans disapprove of the job being done by insurance companies, and 39 percent are unable to take sides at this time,” the study indicated. Charitable organizations, as well as all government levels-local, state and national-scored higher, according to Ipsos.

Meanwhile, because of Marsh, which illustrated one instance of wrongdoing, the industry seems to be permanently scarred. Now there is an assumption that agent and broker practices are not on the up and up. The industry, state insurance commissioners say, needs guidelines to prevent steering and bid-rigging.

The high-profile commissioners in New York and California have recently backed away from stringent regulations, offering to let the insurance industry police itself.

Yet even in making that announcement, California’s Commissioner was steadfast in his desire to cleanup what he perceives to be a seedy industry.

“We are continuing with our investigation and will bring enforcement action against any agents, brokers or insurers we find to have violated the law by bid-rigging, steering or failing to disclose information to consumers,” he said at a recent press conference.

The commissioner is not wrong in wanting to protect customers from illegal activities. But does the public’s perception of the insurance industry in response to catastrophes or insider misdeeds reflect reality?

Hardly.

Across the nation there are examples of insurers, agents and brokers performing good deeds. But the industry continues to be pushed around by negative publicity, and that image is difficult to overcome.

What can insurance agents and brokers do to win the public relations battle?

Perhaps Greg Ostergren, CEO of Springfield, Mo.-based American National Property and Casualty Co., summed up the solution the best: Insurance agents and brokers have a responsibility to “seek to lead, rather than barely reacting to those debates,” he said at a recent PCI meeting. “Insurance is a contract between business and society,” he said.

Ask yourself if you are a leader in your community. Do you strive to clear up public misperceptions in your daily dealings with your clients and accept the higher responsibility placed on you by customers seeking your advice?

After all, if you can’t show your clients how your existence benefits society, then they won’t be able to either.

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