The claims are flooding in following the disastrous weather of late and insurance companies must prove their worth in the eyes of the press. Tony Baker says this is not as hard as one may think
What will be said of the October floods in a month or two? Maybe nothing, and that would probably be good news. Insurers just doing their job and meeting claims.
Of course, even better would be media coverage that the insurance industry has done well. Claims have been sorted out quickly, fairly and effectively. Fat chance you might think – but this need not be the case. There are newspapers that are willing to report positive aspects and are not just looking for doom and gloom stories.
It requires little effort from insurers and intermediaries to get good publicity. Case studies with a photo are the bread and butter for personal finance journalists and they will love you for it. Before and after photographs, details of unusual claims and interesting statistics all are well received.
But how much effort will the industry put in to seeking good publicity? In the past the answer has been “all too little”.
Do companies keep a disaster file on such an event with all the evidence of a caring company contained in it? How many flood calls were received? Were call centres open 24 hours or at least for extended hours? What arrangements were put in place to inspect claims quickly, make interim payments and provide temporary accommodation? How many claims were received and how quickly were they settled in part, or in full? Did you issue a press release with advice on what to do in the event of a claim? Have claimants been asked for their views on the service provided? Did you receive any letters of praise or try to get some good case studies from claims settled?
These are some of the questions management should be asking – and the sooner the better. More often than not, individual companies and the industry try to defend themselves against accusations of poor claims settlement. This seriously damages the industry's image.
During the floods a few alarm bells started to ring. Was this a billion-plus disaster or tens of millions of pounds? Would premiums rise as a result and, if so, by how much? The story was confused and put the industry on the defensive.
The media has not reported favourably the fact that one in four households had decided not to buy contents cover. Unlike many countries, flood insurance is universally available in the UK. There are willing sellers but one in four households choose not to buy a policy.
This is most unfortunate. Many households had no insurance and so missed out on compensation as a result of the floods. Some reports portrayed the lack of an insurance policy as a criticism of the industry.
Now there is time to reflect on the floods. Memories abound of the disasters and it is very real for the individuals and businesses that suffered damage.
Flood damage is a very messy claim and one that can take a long time to be resolved. This is not due to a reluctance to settle but it takes time to dry out properties fully, check on damage and repair and redecorate.
It should not be an excuse for policyholders to be told to keep flood damaged carpet in their gardens for the odd week or two so it can be inspected. Insurers that fail to get their act together on claims deserve all they get from the media. It is unfortunate for the rest of the industry if their image suffers as a result.
So it is a good idea to find out how the local authorities, trading standards and consumer bodies think the industry has performed. Do we know and, if not, why not?
In today's consumer society companies need to take the initiative, otherwise there is the danger of the initiative being taken from you.