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It's time to counter bad press
Tuesday 28th of July 2009
Yesterday we held the ASSET Magazine Insurance roundtable. This is where we get together a group of people from various parts of the life industry to discuss current issues.
I wasn’t going to discuss this until a little closer to when we publish the Round Table discussion in ASSET.
However an item on TV3’s Campbell Live last night picked up on one of the issues discussed.
The issue is simple – the public perception of life insurance and risk advisers.
On Campbell Live there was a piece getting stuck into Sovereign for not paying a claim made by a guy who was dying of prostate cancer.
It seems the key issue is the man had failed to disclose a number of important conditions when he filled out the application form.
What was fascinating is that although Sovereign’s clinical director John Mayhew tried to put the case, it was impossible to make any headway as Campbell clearly didn’t understand how life insurance works. Rather he played on a strong emotional line: How can you deny paying a claim to a man who is dying?
This isn’t the only example of bad press for life insurance. The whole financial sector took a hiding in the Sunday Star Times this week when it published results of a survey. The key point, and it is little surprise in this market, is that there was little trust of the either advisers or the firms who provide investment and insurance products.
Perhaps most galling was a comment no one trusted insurance advisers anyway so it was no surprise there wasn’t a positive public perception.
When things go wrong it makes headlines. It’s really easy for the media to be critical of life insurance.
Also when things go wrong there are plenty of willing outlets for the story where it is current affairs shows like Campbell Live or Fair Go.
The point is that the media totally ignore the great work life insurance plays and the thousands of claims they pay out each year worth many millions of dollars.
What the life insurance industry needs to do is get out and sell its good news story. It has a great story to tell. It has thousands of people who have benefited from having life insurance.
It’s time the industry put aside its differences and works together to get the facts out there.
The sooner it happens the better it will be for everybody (except the uninitiated who want to tell sensationist stories).
Comments (5)
Philip Macalister
I see Russell has commented on the story too. You read his thoughts here http://chatswood.typepad.com/moneyblog/2009/07/campbell-live-and-sovereign.html
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15 years ago
Phil Menzies
I agree with Phil's comments in this blog. I did see Campbell Live and can say that Sovereign's representative acquitted himself well. This isn't easily done when being interviewed by a twit. Apparently according to JC (joke intended) we do much of our prospecting in 'the Pub'. Since I don't, and I suspect many of you don't either perhaps we should allocate all Pubs in NZ to say the members of the IFA. This can be done on a rotation basis say in 12 month cycles. JC simply confirmed that he doesn't understand the business.
As far as the client is concerned my educated guess is that he had one of the 'off the shelf' whole of life policies that AMP pedalled in those days. Every one I came across was either for $10,000, $12,000 or later $20,000 sum assured plus bonuses. So he was offered the option of spending the same premium on tens of thousands of term cover. And I imagine no matter what the adviser said at the time the surrender value of the whole of life policy was already 'spent' on something else! I do feel sorry for the client who decided to cash in something small but worthwhile to take out what would have been a much more realistic cover. Pity he didn't tell the full story on the application. Personally I don't ever complete an application these days. I just think its wise not to but the client is left in no doubt about the consequences of 'non disclosure'.
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15 years ago
Philip Macalister
I could not agree more with the sentiments of Phil’s column and recently I sent a letter to the editor of Business to Business on just such a matter in response to one of their editorials . The letter to the editor was in the July edition of Business to Business and it is quite surprising the feed back that I had from various clients in support of what was said by me.
However to a point it is our own fault in that we occupy the flashest buildings (although only leased) the employees for the majority are well paid (and why should they not be) and we set ourselves up every time because /due to a person’s attitude on the day that the claim is submitted.
I have just a similar case now against an insurance company because they have declined a claim on a legitimate loss based on an assessors preconceived assessment of the events which led to the loss . Although the client is going to the insurance ombudsman the insurance company is still not backing down . It will/ may still go to Fair Go and the insurance company will be made Toast and at the end the insurer will have another black mark against it and will have to pay out in view of the public eye . Why do the insurance companies do this ?
I read the other day in an another management magazine that reputation of a company comes down to the people that are employed to do a job . The people in a company are the front line in the sight of the public. These people in the insurance world look after the interests of people 24 hours a day 7 days a week 365 days of the year and we are responsible to ensure that we have the insured correctly covered. What other job is there in the world that places this much responsibility on to a person and we can only cover what is provided in accordance with the terms and conditions on a piece of paper . It’s a contract .Its a legal document. It’s not a guarantee of payment .
It’s about time the insurance industry in New Zealand started to shout back at the buying public and be proud of what we do and how we do it .
But I think if we could be a little more quieter in the manner in which we portray our selves then life would be some much better, i.e: don’t have the flashest buildings don’t be seen to be still having the flashest parties. It does not help when individuals and industry are cutting costs to watch insurance company personnel have swanky parties and still enjoying the high life on their customers premiums and yet still be seen to be increasing the premiums. It does not reflect well.
Regards John
This is a comment from John Barley emailed in.
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15 years ago
James Sheridan
One point I would like to make is that it hasnt been disclosed how much AMP cover was replaced. If the policy was taken out at age 18 and he is now 53, thats 35 years ago.
No one will know how much cover was taken out 35 years ago but some might say that it is probably minimal relative to cover taken out 2 years ago.
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15 years ago
Phil Sowman
Does anyone know what sum of money was involved? I saw the programme and was not convinced by Sovereign.
Even the email out to advisers didn't seem that clear as regards what the underwriting decision would have been if all information was known.
Unfortunately in these situations the insurer is never going to come out looking good and the lasting impression will always be the cold fish insurance company vs the very personable former client.
When will the insurance companies start to invest in some good media training so we all don't get the flack when an insurance company representative gets on TV and lets us all down.
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15 years ago
2 min read
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