Customers and stakeholders are increasingly savvy and cynical about PR. Deeds – not just words – are needed to build the industry’s reputation post-Covid-19, says Director of Advocacy, Ben Wilson
How bad has the reputational impact been on the industry in 2020?
It has undoubtedly been a difficult year for the industry but it is important to understand the nuance.
Our research shows that the dispute around business interruption insurance has had limited visibility and impact with consumers as a whole. At the same time, consumers are more concerned and engaged in their long-term financial futures, so products such as pensions and insurance have actually more salience than ever. Overall, this means that attitudes are quite fluid and it is a pivotal time for the sector in terms of its ability to shape perceptions. But clearly no industry likes to be in dispute with valued customers, and longstanding challenges around low levels of trust will certainly not have been helped. For example, the ABI has seen its MP caseload rise steeply as a result of local constituents raising concerns about business and travel insurance cases.
Has the industry response gone far enough?
In terms of the response to Covid-19, the ABI has consistently stressed that this has been a major insured event, not simply one that has been uninsured. With more than £1.8bn in claims predicted to be paid including record amounts in areas like travel insurance, the industry’s response goes well beyond this.
The ABI has worked with members to set-up the Covid-19 Support Fund, Britain’s biggest sector-wide charity initiative; customer pledges across insurance lines; a trade credit reinsurance scheme with Government and; a voluntary agreement not to deduct Government grants from small businesses from insurance claims. In addition, we have been working quietly behind the scenes on Pandemic Re solutions. As the year has gone on, there has been a growing recognition of all these initiatives amongst key stakeholders including politicians and senior civil servants.
What should the industry do next?
The ABI has worked with members to develop a reputation roadmap for the sector.
There are, broadly, three key areas that our Britain Thinks research says is important to customers in improving trust and reputation, and underpin this roadmap.
- First, there is a need to address the expectation gap through greater transparency and simpler customer communications around products. This might involve more upfront conversations about the trade off between price and product coverage in insurance, or making pension products easier to understand and access.
- Second, while a clear majority of customers believe that insurance is worth paying for even if you can’t always be covered for everything, they do expect the industry to strive for solutions to providing future pandemic cover.
- Finally, the sector has an important role to play in ‘building back better’. Whether that is using our financial muscle as an investor in infrastructure and jobs, tackling climate change or helping creating a more fair and inclusive sector and society. While consumers will always care most about whether the products they buy work for them, these are all areas where our research shows that action can also shift the dial on how the industry is perceived.
What role has the ABI in improving trust and reputation, and what can firms do?
Improving trust and reputation has to be dealt with at both firm and industry level.
Through our political, media and regulatory networks, the ABI is uniquely placed to act as the voice of the industry, and to tell a complete story of how the industry acts as a force for good through the products it provides and the economic contribution it makes to the UK during a time of recovery. In 2020 alone, the ABI gave more than 145 media interviews and over 40 briefings on Covid-19 to ministers and politicians. It can also galvanise action across the industry - as we have seen throughout 2020 - and act as a convener in dealing with some of the most knotty challenges.
Firms own the customer relationships. Because pensions and insurance are low engagement sectors compared to some – such as broadcasting or newspapers which are in your home every day, or supermarkets or banks with which you might engage on a weekly basis – customer experience and engagement is even more critical to reputation. That’s why issues like customer transparency and managing the millions of touchpoints with consumers are, rightly so, high up on the agenda of our general insurance committees.
How important are issues like climate change?
One of the surprises to polling companies during the Covid-19 pandemic has been that movements like Black Lives Matter and action on climate change have risen in prominence and public concern rather than being crowded out by the pandemic. Our data shows a variation by age of customer. Amoung 18 to 34-year-olds, 29% are likely to identify taking action on climate change or sustainability in driving positivity towards the industry compared to 21% for over 55s.
It is also worth noting that our member survey reflects that a notable rise from firms in identifying climate change as a priority issue for the years ahead.
What lessons should the industry learn from 2020?
Our Britain Thinks research highlights how it is a challenging times for brands, across sectors, when it comes to connecting with customers - and finding the right tone can be elusive.
The main lesson I would draw is that customers and stakeholders are increasingly savvy and cynical of PR. Reputations are built on a foundation not only of communications but also of deeds: stakeholders can see through PR that isn’t supported by real and consistent business activity.
It will be those industries and firms that go through a full process of introspection and change that will come out stronger.
Virtue signalling, and short-term or defensive strategies, will not work over the long-term. As our research shows, actions speak louder than words. To quote Socrates: ‘Endeavour to be what you desire to appear.’