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Why trust is the most important currency for the insurance industry

From the insurance industry’s response to Covid-19, growing scrutiny from the FCA and the state of the hardening market, the reputation of the industry hangs on a cliff edge.

Businesses pay for insurance so that when a crisis does occur, insurers are there to help. Instead, in recent times we’ve seen costs spiral, claims rise, and cover being cut.

In turn, this has culminated in a loss of trust in the industry with less than half (49%) of customers feeling confident that their insurer will deliver their basic needs.

While traditionally, the industry does move quickly to protect itself, in prolonged times of crisis like now, trust and reputation are paramount, and this period must be used to rebuild it.

An effective communications and PR strategy can help execute this and minimise any further reputational damage for the industry and those operating within it.

To do so, firstly, the line between ethics and legal correctness needs to be reviewed.

For example, during the pandemic, many insurers refused to pay out to companies over business interruption policies. While legally, this was passable in many cases, ethically – it has led to irreparable reputational loss with even the FCA recently warning insurers that they are falling short on pandemic claims.

Effective reputation management counsel can help businesses navigate the line between what is technically and legally correct and what is ethnically sound. Strong media relations would also enable insurers to publicly discuss and disprove accusations that the industry prioritises profits over ethics and their policyholders. In turn, this would help rebuild customer trust and mitigate further crises.

Also, in the digitally connected era we now live in, it is no longer acceptable for industries to stick their heads in the sand and hope for the best. Instead, it is vital that the industry carves out a new narrative to set the record straight, address misconceptions and rebuild trust.

Just as a successful communications strategy needs to incorporate digital awareness and online media streams, the industry itself needs to open up to technologies.

Across almost all industries, customers now have real-time digital access to a broad range of services and the insurance industry should not be any different.

While insurers are often characterised by their stubbornness to change, if the industry embraces digital technologies to expand access, customer perceptions are certainly likely to improve.

Undoubtedly, the insurance industry is facing an array of challenges including the highly competitive nature of the market coupled with negative customer sentiment.

However, the main reason behind the current state of the industry, also doubles up as the solution to rebuilding trust and reputation – preparation.

By implementing a communications strategy, inclusive of crisis management, the industry can prepare themselves for any future crises and even develop ways to prevent them.

For the insurance industry, trust is the most valuable currency, and the onus needs to be on re-engaging customers, repairing reputation and re-building communication frameworks.

Get in touch with the team