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Insurance Consumer Advocate

Sha'Ron James


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Opinion: The Insurance Industry's Image Problem & How They Can Fix It

 

Date: February 03, 2017
Source: Insurance Journal
Author:  Amy O'Connor

 

The insurance industry has an image problem. That is probably not really breaking news to anyone reading this, but it’s an important topic to discuss and one the industry can address and, believe it or not, an issue that can be resolved.

The Florida Chamber of Commerce’s 2017 Florida Insurance Summit held in Miami this week included a panel with journalists who cover Florida. The discussion was robust and important andoffered insightinto one of the big reasons the insurance industry has an image problem: they won’t talk tothe media.

Now rather than getting defensive and calling the media the “opposition party,” the industry might consider the job the media tries to do.

The panelists, including this Insurance Journal reporter; Mary Ellen Klas, Capital Bureau chief for the Miami-Herald and co-bureau chief, Tampa Bay Times, who covers legislative issues; and Todd Ulrich investigative reporter for Orlando television station WFTV-9 agreed one of the big reasons for the insurance industry’s typically negative image is access.

There are plenty examples of bad coverage the industry has gotten over the years, and it isn’t always deserved. But if the industry won’t talk to the media, won’t tell their side of the story, it won’t be reported on.

Covering the insurance industry means interviewing and having relationships with insurance professionals and executives, as well as many state regulators, and other industry stakeholders and contributors. It is obvious the industry cares about its clients and works hard for those clients. Whether it is helping them after a catastrophe, negotiating with a carrier on their clients behalf, or the charitable efforts that an entire agency pitches in to support, there are a lot of stories for the industry to tell.

There are also times when things happen that paint the industry in an unflattering light. It’s no secret that most consumers don’t understand how insurance works – why their rates go up when they haven’t had a claim or why insurance companies say they have to raise rates when they made millions of dollars the previous year.

As a reputable insurance news organization, not a publication just there to promote the industry’s interests, Insurance Journal reports on stories that may not always make the industry look good. The industry should be held accountable when something that isn’t right is going on. At the same time, Insurance Journal goes straight to the source when a negative story about the industry is reported.

A trade publication like Insurance Journal does have an advantage over other media outlets because of its focus on the industry and understanding of what it does. The relationships formed with those in the industry are invaluable to getting honest answers and being able to report on the industry in a fair manner when questions about its integrity arise. Insurance Journal will give the industry credit where credit is due, but that can’t be done if nobody will talk.

When insurance companies put up roadblocks on important issues it can be nearly impossible to break through. That was the main topic discussed on the reporter panel at the Florida Chamber of Commerce Insurance Summit.

Take the issue of assignment of benefits abuse that is currently rampant in Florida. The problem is leading to increased rates statewide, and carriers pulling out of certain regions of the state and refusing to renew or write new business in areas where the abuse has been especially bad. Florida’s state-run insurer, Citizens, is anticipating its policy count will grow over the next several years after years of depopulation efforts and reaching its lowest policy count in over a decade just last year.

This is a big deal, and it’s a big deal for the industry’s clients. Klas and Ulrich said as journalists in the Florida media, they have reported on the topic but not to the extent they would like. Ulrich has done many hidden camera investigations in Orlando documenting the abuse by unscrupulous contractors. He has seen first-hand how consumers are completely in the dark about what is going on and how this abuse will eventually affect them.

Ulrich thinks and believes the industry that this is a big problem, but in reporting on these stories he gets radio silence from carriers directly affected by the abuse.

The industry needs to tell these stories. The industry needs to give the media hard evidence of how this abuse is affecting their companies and most importantly their clients. This can be through financial data or e-mailed statements, but it could and should go a step further – the company’s own experience with this abuse either targeted to its clients, agents, or adjusters.

Floridapolitics.comreported that CFO Jeff Atwater, who gave the keynote speech at Thursday’s event, said after his talk that the industry has helped to perpetuate its negative image.

“I’m not crying crocodile tears for anybody in here,” he said. “The industry has created its own perceptions — slow walking, not getting a repair done on time, lowballing with a contractor. Over a long period of time, this created conditions where there’s a tremendous suspicion of what could really be the motivations of the insurance industry.”

Insurers use the defense that they are a regulated industry, that claims data is sensitive and private information and this data cannot be disclosed. They also don’t want to alarm stockholders by discussing trends that could negatively impact results. In the case of AOB, there is also the issue of quantifying the abuse – insurers have just started to break out and really analyze that data.

That’s all understandable, but if the industry wants to combat this problem, if the industry wants to change the perception of why rates are going to increase for years to come and why legislation needs to be passed, the information as to why must be accessible and provided in a way that makes sense for those who are affected by this abuse.

The media is stretched thin. There are fewer reporters covering more than they ever have before. If the insurance industry wants their side of the story told, they need to help with telling it.