Insurance industry bid to improve bad rep

Insurance industry bid to improve bad rep | Insurance Business New Zealand

Insurance industry bid to improve bad rep
An overt effort to improve the insurance industry’s poor reputation with the public by rewarding the media that inform them has been defended by its initiators.

An audience of business leaders attending the Trans Tasman Business Circle lunch focussing on insurance megatrends heard discussion on why insurance companies are often made scapegoats and what the Insurance Council of New Zealand has done to try to change that. 

Jacki Johnson, IAG New Zealand CEO and President of the ICNZ board, told attendees the industry still needed to work hard to earn ‘mana’ but admitted feeling frustration when the ‘right story’ wasn’t put out there in the mainstream media.

“Disappointingly we have given a lot of our stories and our customers have and they’re not getting played out,” she said. 

“We get very frustrated when either we’re personally named for things we haven’t done or else we’re not getting the right story out there.

“So ICNZ – we, as a board – will start rewarding those journalists who do get the right stories out there, because that’s part of the education point and trust.

“We’ll reward the people who are taking the role to educate our community properly through balanced reporting and that’s why we’re very excited about the journalists’ awards.”

The winners of the 2014 Excellence in Journalism Award, to be announced next month, will win cash prizes for a body of work that helps to foster a better understanding of the often complex issues of the general insurance industry by using balanced and accurate writing.

Johnson admitted she had to defend the move to some critics but was prepared to do the hard yards to earn the respect of the community.

“We’ve been criticised a little bit about the award but it’s about joining the dots – how do we make sure we’re being responsible enough to show our role in the economy and get a balanced view out there.

“One of the terms I’ve come to love in New Zealand is the term mana,” said Johnson, who is Australian.

“At first when I looked it up in the dictionary I’d always seen it as meaning leadership. Now I understand it means a lot more and I think it defines where we have to go as an industry.

“It’s about earning that respect, as a group and individually, by doing what we say we will do. And the more we do that we will have enough evidence to be able to show our role in the community.”

Fellow panellist Ross Chapman, general manager, New Zealand operations at QBE, said the challenge for the industry was to educate New Zealanders to better understand the role that insurance plays in the community.

Referring to how the banking world had recovered its reputation following the GFC, he said: “When it’s insurance versus the bank, you’re popping into the bank or doing your banking online every day whereas [with insurance] a lot of people don’t have claims so they’re not seeing how their insurance purchase is responding to them.”

“Post the earthquakes, when some of the insurers didn’t want to play any more down there people were going to their bank wanting to borrow money to build a new house or get their new business underway and the bank wouldn’t lend because there was no insurance.

“So I think we’ve got to educate people that insurance is sort of an enabler.”

Johnson talked of the ‘difficult balance’ of signalling risk and appeasing stakeholders.

“I think we have to be a bit careful because in other jurisdictions around the world, in particular London and Australia, the insurance companies have been the scapegoats of the industry for sending the signal for withdrawing capacity.

“In a normal situation in Christchurch we’d all be pulling out of Flockton for example, but I think we’ve all been very responsible as an industry working beside council to try and come up with what the solution is going to be. But if that doesn’t get mitigated, insurance is about unexpected loss, if something’s expected that’s not insurance.

“One of the dilemmas is how do we send that signal, and part of it’s education, part of it’s pricing but the other piece is capacity and we also have lots of other stakeholders who we have to appease – it’s a difficult balance, isn’t it?”

The third panellist, Adam Heath, general manager personal insurance, Vero New Zealand, agreed it was a case of looking for the right opportunities to create platforms to have the right conversations.

“We are the grease on the wheels of commerce and yet you wouldn’t really get that impression in terms of our PR,” he said.

“It’s also ensuring we’ve got a balanced conversation where it’s not all negative news and we’re actually getting some of the accolades as an industry that we do deserve.”