Looking Beyond The Horizon

ITEM: The man who mows my lawn weekly hit a rock with his mower and it flew into one of my windows causing $800 of damage. He was insured but declined to file a claim for fear of cancellation.

ITEM: My own Property & Casualty Insurance is up for renewal and my agent suggests that I raise the deductible to $2,500. I have had no claim in years, but implicit in the recommendation is the idea that it would be hazardous to file a smaller claim if I had one.

The level of anger is rising and people are saying, “What good is insurance if when you use it, you get canceled.” They are not asking what good is property and casualty insurance rather, just “insurance,” and that includes all of us. The public has never really made a distinction between various lines of insurance–we are all tarred with the same brush.

The concern I have is this: Is what is happening to people I know a pandemic condition? It would be hard for me to believe that the carriers are picking on just my circle of friends.

Add to the foregoing the runaway cost of health insurance. Local teachers are complaining that despite an annual pay raise, they are taking home less pay because of the increase in health insurance premiums. True, we are not the cause of these increases, but we are the messengers regarding rising health care costs, and its the messenger that usually gets killed.

I am not for a minute suggesting that rate increases are not justified. Claims (including 9/11) are high, and investment yields are not offsetting underwriting losses. Health care costs are rising as our population ages and as expectations from our system (including malpractice litigation) increase beyond reasonable limits.

The only point that I am trying to make is that public opinion can consume you like a forest fire, and we need to start setting some backfires to ward off a PR disaster. It clearly has been demonstrated in the past that unfavorable public attitudes toward insurance can affect the amount of hostile legislation introduced in Congress and the states, P/E ratios of companies and the morale of agents.

AT&Ts Arthur Page, considered the father of corporate public relations, said, “If the reputation of business is good enough with the public, no one representing the public–whether in the press, politics or any other capacity, will be hostile to it.”

We also have learned from bitter experience that the reverse is also true. Its later than you think. We need a PR offensive now–fire prevention in a sense.

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 25, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.