Editors' Cuts

Why the Insurance Industry Needs a Dog

Pat Speer
Insurance Experts' Forum, October 4, 2010

Our editors are privy to lots of nasty news about insurance carriers. Many U.S. states’ insurance commissioners routinely route license suspension news to us, and we find ourselves reviewing a host of news clips each day that spell certain doom to the livelihood of some insurers. 

The insurance industry has long suffered the ills of a bad reputation. Like any industry, sometimes this is the result of the actions of a few, and it’s warranted; other times it’s not.

The ink is still drying from U.S. Rep. Harry Mitchell’s signature on H.R. 5993, the Securing America's Veterans Insurance Needs and Goals (SAVINGS) Act of 2010, to require insurance companies in the Servicemembers' Group Life Insurance (SGLI) program to be more forthright and transparent about their policies and requirements.

The public’s perception as to why the law was considered in the first place fueled fires even in Washington, where lawmakers were compelled to take sides with fallen soldiers’ families. H.R. 5993 passed the House of Representatives by a bipartisan vote of 358-66 and is now pending before the Senate.

This particular news comes at a time when the industry overall (property/casualty, life and health) is faring pretty well in the fight through financial uncertainty, yet this positive revelation doesn’t lend itself to that “warm all over” feeling by the general public.  Instead, it reflects the core of what’s wrong with this industry—insurers are perceived as money-grubbing, coldhearted, monolithic monsters that will stop at nothing to improve their EBITA.

The problem with public perception is one of messaging. You don’t hear much about the happy homeowners who received great claims customer service, or how satisfied and secure the elderly policyholder felt when his or her long-term care policy arrived in the mail. The news tends to focus instead on insurers selling health care policies without a license, or on agents who are conducting business for companies that don’t exist or on claims that are justified but denied.

As dire and overwhelming as this sounds, I think there’s a solution: The industry needs a dog. More precisely, it needs a cuddly puppy.

I don’t claim to own this idea; I stole it from CBS news broadcaster Lesley Stahl, who enlightened C-level insurance executives last week at the Insurance Accounting and Systems Association’s Executive EDGE program (co-located with INN’s Women in Insurance Leadership program).

Stahl offered the cuddly puppy solution as an example of presidents trying to hang on to their reputations as leaders while serving during difficult economic times.

Stahl enlightened us with examples of more recent presidents’ past (Ronald Reagan, Bill Clinton and George W. Bush) who saw marked improvement in their ratings after adopting—and being photographed—with the new family dog.

Then she focused on President Obama as a case in point (well, maybe a case in flux). Obama has many bad luck issues to deal with, she told the audience, such as a war that was started by his predecessor and an economic crisis affecting unemployment.

“He can’t seem to win. Even the liberals are upset with him,” she said.

Like insurers that suffer from the ceaseless messaging that depicts the industry as the bad guy, the president is victim of a culture that acts as if our current economic state will last forever. Good or bad.

“Let’s face it: If the economy sucks, we don’t tend to re-elect,” Stahl said. “On top of everything else, Obama is viewed as being too cool, too detached.”

Enter Bo—the Portuguese water dog—the puppy that became a campaign promise come true to his daughters. For a mere $1,600, the president altered the playing field of public perception. Whether the dog will have any influence over the next election remains to be seen…

But consider how this could play forward for the insurance industry. For a much smaller investment, Robert Benmosche, American International Group’s chief executive, could adopt a mutt. What if he made a point of being photographed taking the puppy for a walk (retractable leash and baggie in hand) in front of Manhattan’s American International Building? Would the public view AIG or the insurance industry differently? I’m sure Obama would agree: if only it were that simple.

Pat Speer is editor-in-cheif of Insurance Networking News.

Readers are encouraged to respond to Pat by using the “Add Your Comments” box below. She also can be reached at patricia.speer@sourcemedia.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (2)

It worked for MetLife... Seriously, look at MetLife pre-Snoopy and post-Snoopy.

Posted by: Rick M | October 11, 2010 6:17 PM

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The press is always going to concentrate on the negative. That is just the nature of the beast. Unfortunately the contested or denied Home Owners or Auto Theft has become all too common. Claims are the delivery point of the product. Unhappiness there is a failure on the part of the industry. TV ads are the other contact point with the public and what do we have, too many simplictic, undeliverable promisses by actors and geckos. Now, we should introduce a puppy?
I know it is just illustrive but it strikes me as strange and a little funny.

Why don't we try bringing back management familiar and comfortable with the business of risk and service, instead of bean counters who only seem to be interested in "bottom lines" and "current stock prices". How about hiring enough people to do the job right, instead of "let's learn to more with less" for the line people and huge bonuses and payoffs for the top executives. How about returning to an industry that appreciates it's human contacts from it's agents and claims people, insted of cutting out their support and earning power to meet some mythical and unreachable cost reduction factor which is an insatiable demand for more and more with less and less.

I do not direct these criticisms and suggestions at Ms. Speer, who is only trying to bring some humor and suggestions to the situation. I am directing it at the industry in general and the major players in particular. We can not tech our way out of this dilemma we need people and service and attention to detail and real desire to provide the best to the customer. It is no accident or technological miracle that a smaller company like AMICA comes out on the top of the service polls nearly every year. What they do needs to be studied and applied elsewhere. Nuf Said. E. L. Evans

Posted by: elevans66 | October 8, 2010 10:51 PM

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