Another storm another pasting by the media of the insurance industry

Male Hand Pressing Bias Key ButtonEarlier this week I explained in a detailed post the coverage afforded by home and contents policies when it comes to the action of the sea, erosion etc. It is rarely covered and this has been the way since home insurance was first introduced into this country.

This week the major focus of the media has been to concentrate on the handful of houses right beside the ocean, which are unlikely to be insured and not the 14,500 of claims (source Insurance Council of Australia 7 June 2016) which are being assessed and paid! No criticism of the local authorities who permitted the development in these regions has been made, nor is any responsibility being placed on the home owners themselves. We all have to accept if you have the ocean or a river as your neighbour, that neighbour may wish to come visit some time. The same applies when you live in a bush fire zone. Understanding this is Risk Management 101.

So why concentrate on the bad news! My daughter, Susan who is 2/3rds through her Doctor of Psychology degree explains that humans are wired from prehistoric times for survival. Our sensors are around 10 times more attracted to bad news than good.  The water in that river is poison v the water in that river is sweet. This is all linked to the fight or flight theory.  We take much more interest in the poison which can do us harm than the news of the good water.

The directors of the news organisations know this and the lead story and majority of stories are therefore bad news. They do this so that they attract more readers, viewers or listeners. We all saw this with the Brisbane Floods of 2011 where the behaviour of some, breakfast presenters in particular, was so appalling that I have never watched the program again in protest. It did win them some awards for the presenter though, which of course only further encourages the behaviour.

It all comes down to ratings. This in turn allows the organisation to retain or increase their rates to advertisers.

Now comes the irony in all of this.  If you watch the commercial television channels, listen to commercial radio channels you will hear and see, they are one of the biggest advertisers used by the insurance industry. So our industry gets demonised as being uncaring and horrible people whom look for ways not to pay claims by the media. To counter act this, and win back customer support for our vital service and protection, we as an industry advertise more on the very stations that damage the brand insurance in the first place!

As an industry, I sometimes think we are our own worst enemy. We are the pawns falling for a three card trick orchestrated by the media barons. Choice Magazine with their Lemon Award to the entire insurance industry after the Brisbane floods are no better. This was despite the billions of dollars paid out to policyholders as a result of that natural catastrophe. The very next edition of Choice Magazine was a comparison of the cover and price of insurance to sell more magazines. I lost all faith in that organisation as a result.

If I were king of insurance for one month, I would ban all advertising for that month with any organisation that does not provide a balanced view of our industry. When it has financial consequences we may get some balanced and fair reporting.

I am not suggesting the media should be gagged. Far from it. If we do something wrong  such as what was outed in the life insurance sector or with some insurance investigators that should and needs to be reported, but when we do things right, that too, ought to be reported showing both sides of the story.

As one of those who is out there working with business owners looking to mitigate their losses, prevent a re-occurrence and having their claims paid, I do get demotivated by the bad press which in turn puts us on the back foot from the start with the Insured. Meeting someone on Monday the opening line was: “so you are one of those guys that tells me I am not covered”.  The same happened during the Brisbane floods. In the vast majority of cases I can show them that they are in fact well protected unless they, the Insured made the wrong decision when they took out the insurance, typically looking for the cheapest price.Childrens

It is not just about me. I am a big boy and can handle the questions. But I am sure the negative image of insurance from these stories means we do not attract some good people to join the industry who would otherwise would and it allows the decision makers who keep putting home and business owners into areas that are known to flood or be subject to bush fire, to avoid their responsibility.

I know a lot of people in the industry tried to counter the bad press following the Brisbane floods and provide a balanced face. For my part, I wrote a book to introduce insurance and risk management into schools and funded a segment on a retrospective documentary looking at the floods and the role of insurance.

Capture Manning on FloodWhat do we have to do this time? I know, let us advertise even more and keep the cycle of lining commercial TV and radio stations pockets going for another few years.  I am not sure this is the best “policy”!

Today’s rant is officially at an end.

2 responses to “Another storm another pasting by the media of the insurance industry”

  1. John says:

    Allan, as always spot on and entertaining. The sad side is, if insurers offered coverage for actions of the sea that covered these homes on Sydney’s northern beaches then the bad news story would be the high premium cost. You can insure anything these days, it’s just many don’t want to pay for that risk but then complain when that risk eventuates. I’m explaining this almost daily to customers!

  2. Scott says:

    Should be taught to Politicians as they normally front the media and say ” I trust the Insurance industry will do the right thing” or ” We will make the insurance look after the people effected” which can give false hope. Helps transfer the blame from, in most cases, from the people that actually caused the problem

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