It’s time to paint the insurance industry with a new brush. For too long, this critical sector has been “the ugly duckling” of the financial services brood, but now, as countries seek sharp recovery trajectories from the effects of COVID-19, the insurance industry can and must realise its full swan potential.
Danish poet and author Hans Christian Andersen’s original “The Ugly Duckling” fairytale (in Danish: Den grimme ælling), published in 1843, has a happy ending. After a lifetime of physical and verbal abuse, the “ugly duckling” at the heart of the tale - who was rejected by his family and other barnyard birds and animals for being different - eventually discovers he is in fact a beautiful swan, he is accepted by a swan family, and spreads his wings.
I believe there’s a similar happy ending on the cards for the insurance industry IF it can alter its narrative slightly.
Unfortunately, the insurance industry has never had the best public reputation. Fundamentally, it’s extremely difficult for the average consumer to understand paying for an insurance policy year-over-year that they will more than likely never have to make a claim upon.
“If I never have to make a claim and get a payout, then where’s all my money going?” From an educated guess, that’s what I imagine lots of consumers think about their insurance. But the fact of the matter is, they’re often required to purchase certain insurance products (e.g. home and auto insurance) by law, so they buy the policies – but it’s a definitely grudge purchase.
That’s just one reason why insurance might be seen as the “ugly duckling” of the financial services world.
Then there are the unfortunate insureds that actually have to make a claim on a policy. I would argue that even if the claim experience is top notch and the insured receives excellent communication and support, quick adjudication, and a swift payout, suffering a loss is and always will be an “ugly” experience. Yes, insurance companies are doing everything they can to improve the customer experience in claims, but it’s still seen by many as an ugly business.
At the end of Andersen’s “The Ugly Duckling” fairytale, the duckling looks at his reflection in the water and realises he’s been a swan all along. I think the insurance industry needs to take a long, hard look at its own reflection.
What the industry does is by no means “ugly”. It literally pieces people’s lives and businesses back together after a loss, and enables people to take risks, innovate and grow.
Shout about that! And I mean everyone in the industry – not just the brokers, whose core value proposition revolves around advisory services.
Help consumers, business owners, regulators – everybody - understand where their money is going, how claims work, and, perhaps most importantly, how insurance underpins and supports all global industry, and therefore, all human opportunity. Explain that while they might never make a claim, insurance is an essential part of good financial hygiene. The potential for positivity in the insurance narrative is great, and yet, the industry has not quite managed to shake off its perceived “ugliness”.
Changing the narrative and painting the insurance industry with a new (and more accurate) brush might help the sector overcome one of its biggest challenges – the talent shortage.
Ask yourselves: How do teenagers and new graduates consider the insurance industry? If they were anything like me growing up, the only interactions they would have had with insurance might be with car insurance (at quite the financial hit to a teenage bank account), travel insurance, and possibly renters’ insurance – all things (minus travel insurance) that you have to purchase by law, but frankly, don’t want to. That’s not an attractive selling point for an industry.
Unfortunately, that’s never going to change. But what could change is the narrative the industry spins around those products and services. For example, there’s lots of exciting innovation happening in auto insurance at the moment around things like usage-based insurance (UBI), electric vehicles, driverless cars, telematics technology, and so on. This goes back to what I said about insurance enabling innovation. That’s the selling point.
Talking about innovation and drumming up excitement about the role of insurance in evolution – especially for insurance products that everybody has to buy – will increase general interest and acceptance of the industry and potentially draw talented individuals towards a career in insurance. Only then will the insurance industry grow its flock and realise its full swan potential.