Michael Faulkner says AGI's block on claims pay-outs will undermine the good image the industry gained at Boscastle

' A year ago, the Boscastle floods, while terrible for the families and businesses affected, looked like a potential PR dream for the insurance industry.

The swift work of loss adjusters, brokers and insurers helped people to put their lives back together quickly. Houses were dried out, alternative accommodation arranged, and businesses were able to trade again. Life could go on.

It is when a claim is made that the real value of an insurance policy is revealed, when the promise of an insurer is truly tested. In short, it is when the insurance industry's reputation is put on the line.

Done well and the difficult task of improving the public's perception of the insurance industry is made that little bit easier. Done badly and the damage is incalculable, particularly in the glare of the media as in Boscastle.

One year on, and the insurance industry's hard work could be undone by the actions of a single insurance company, Arab German Insurance (AGI), that is refusing to pay out what is due to policyholders, a number of whom are understood to be in Boscastle.

The industry is in the spotlight. It can take years to build a reputation, but seconds to lose it. And AGI's failure to pay out on worthy claims threatens to do just that.

The Prince of Wales and an MP have already expressed outrage at the actions of the Jordan-based insurer, and the national press have also begun to focus on it.

The good efforts of the insurance industry in Boscastle last year will be forgotten.

A year later it is AGI's actions that will be in people's minds. The rest of the insurance industry must now work even harder in all aspects of its service to undo the reputational damage that AGI has caused. IT