Perhaps it’s a casualty of the long battle over national health insurance reform. Maybe discontent over escalating insurance premiums triggers it. But whatever the reasons, most Americans simply don’t trust the insurance industry.
Only 32% of Americans–less than 1 in 3–said they trust insurers “to do what is right,” according to Edelman’s 2010 Trust Barometer, the public relations firm’s tenth annual global survey of trust. That figure stands only slightly above the 29% who trusted insurers a year earlier, at the height of the recession and financial crisis. Among 13 major industries, the insurance sector ranked last in the 2010 survey.
This survey’s results aren’t an anomaly. In a Bloomberg national poll released March 24, 3 in 5 Americans said they have a “very” or “mostly” unfavorable attitude toward insurers. The industry ranked below Wall Street (57%) and banks (53%).
What can insurers do to restore the trust levels the industry used to garner? Edelman’s U.S. Financial Services Trust Barometer, which surveyed 500 Americans ages 25 to 64, identifies 4 key initiatives the industry and its advisors could take to help reinvigorate consumer trust:
Initiative 1: Commit to transparency in communications and to excellence in customer service.
To establish and maintain a trusting relationship, insurers should communicate frequently and honestly with customers. They should drop the insurance lingo and communicate simply and plainly so that messages are clear. It will pay off. A recent survey by Siegel+Gale, a strategic branding company, found that 84% of U.S. homeowners and investors said they are more likely to trust a company that uses jargon-free, plain English in communications.
Transparency is vital. Respondents to the Edelman Financial Services Trust survey said “quality of communications” and “customer service” are more important than “price” and “top leadership” in influencing trust and corporate reputation. Indeed, 75% of the respondents rated “communicates frequently and honestly” as important, while 70% said “has customer service available by Web or phone for help or advice” was imperative. Pricing products fairly and competitively also was rated important by 70% rating, while “has highly regarded and widely admired top leadership” was labeled as important by only 46%.
The National Insurance Producer Registry, a non-profit organization that works with companies and regulators to assist the exchange of insurance licensing and reporting information, believes the key to restoring consumer trust in the industry lies with increased transparency through technology innovations, especially digital, and more uniformity in industry standards.
“Reputation and customer security is at stake,” says Maryellen Waggoner, the organization’s executive director.
Initiative 2: Unlock the value of your most important assets.