Trust in the Insurance Industry

19th April 2020 by Sarah Dunne in Business Interruption Insurance Claims, Insurance Claims News, Uncategorised

Trust in the Insurance Industry

I have worked in the Insurance Industry since November 1980, so it will be coming up on 40 years later this year. I don’t know where those 40 years have gone.

Jim Flannery, Director

I am aware that trust in financial services generally is low in Ireland.  Despite the introduction of the first Consumer Protection Code in 2006, many firms see it as a minimum standard rule-book, which they had to be seen to comply with.

The Edelman Trust Barometer analyses trust across a range of sectors and a range of countries (see www.edelman.ie).  Findings for the Financial Services sector in Ireland for 2020 gives a rating of 45 which is categorised as ‘Distrust’.  The good news is that Family Owned businesses had a rating of 71 which indicates a strong degree of trust.  That includes most Insurance Brokers and Financial Advisors.

Many people who have to make a claim under their insurance policy have their first encounter where the ‘trust’ issue comes into sharp focus.  If they feel sceptical or intimidated or anyway uncertain they are often heard to exclaim – “but I’ve been with them “x” years, and I’ve never made a claim before”. They expect the insurance company to trust them, but they don’t feel it.

Claims – the shop window

Claims are the shop window of the insurance company.  Most of the time the claim is dealt with fairly and promptly, and the majority are reasonably satisfied with the outcome.  In some cases there can be protracted disputes which eventually get resolved, and the customer walks away feeling somewhat dis-satisfied.  In a small minority of cases the matter ends up in the Financial Services and Pensions Ombudsman’s office or in a Court of law.  Even after a successful resolution, the customer has a permanent disgust and mis-trust of Insurance Companies for forcing them into the situation.

I left an insurance company after 19 years in 1999 to set up a Loss Assessing firm.  It wasn’t because I didn’t ‘trust’ the big organisation. I could see people needed help when it came to makeing a claim, and I always wanted to work for myself.   To be master of my own destiny.  To be able to deliver a meaningful and personal service.   I have always operated with a “family business” mind-set, and indeed that is the clearly defined culture in Balcombes.

Building trust

Each member of our team collaborates very closely with each other.  We co-operate and assist in the overall goal of helping each and every client to get their claim to a successful resolution as promptly and professionally as possible, within the terms of the policy.  From the moment of our first contact with a new client we openly and clearly engage with them on a very personal and human level to understand their problem and how it affects them.  We explain the process and clearly communicate all the steps to resolution. We provide practical advice and explanations to ease the process for them.  In many cases we develop a very real and warm friendship with our clients.  Most of our business comes from word of mouth referrals.

Building brands

Insurance Companies spend millions of Euros each year on their branding and try to develop positive sponsorships and advertising campaigns, to show they care.  It takes a long time to build a good reputation, but it can be destroyed in a very short time.

We are all living through some very challenging and strange times.  Everyone is in self-preservation mode.  People have to abide by new ways of living and observe social restrictions.  Some are in total isolation and many are in physical and economic lock-down as they struggle to figure out how to keep going.  Anything is better than contracting Covid-19.

I love the insurance industry. I have spent my entire career immersed in it.  It has provided my family and I with a good living, and I recognise the overwhelming good it provides to society and to individuals and businesses who need to call on it.

Since becoming a Public Loss Assessor 21 years ago, I have heard derogatory comments about our profession being ‘ambulance chasers’.  Most disappointingly was when this was from those within the establishment of the industry.  I mostly ignore such innuendo and tried to rise above it, knowing that “right” is always on my side.  There is no better role in life than to be on the side of the consumer – fighting the corner for the underdog.  We practice ethically and professionally to achieve a positive outcome for all our clients, within the terms of their policy.

Covid-19 and Insurers response

Nothing has disappointed me more than the response from some Insurers, who clearly have a liability in relation to Business Interruption claims, where they have infectious disease/denial of access/public authority extensions.  There is no exclusion for “epidemic” or “pandemic”. They are the drafter of the policy and they have to abide by its terms.  They cannot have their cake and eat it.  Some are issuing declinature letters to business owners, who have zero turnover due to temporary closure of their businesses.  Insurers are trying to decline and renege on their contractual obligations and preserve their own cash.  We have seen several insurers misquoting the wording in their own policies, in an attempt to avoid paying Business Interruption claims.

Meanwhile their advertising campaigns carry on, and they make bold statements about supporting their customers during Covid-19.  They make it sound like they are contributing to the national effort, while trying to avoid and distract from the elephant in the room.  Some insurers are now even writing exclusions for pandemics and coronaviruses into their policy wordings from April of this year, that were not in their policies before Covid 19 struck. These same insurers are declining claims when no such exclusions existed beforehand.

The call to do the right thing

We have seen corporate scandals and unethical behaviour within Insurers being punished by the Financial Regulator over the years.  My plea to the industry now, is to do the right thing.  My plea to the Government and Central Bank is to make them do the right thing. Some have said that it could bankrupt the Insurers if they have to pay these Business Interruption claims.  I don’t accept that. They are currently saving massively on Property, Motor, EL & PL claims due to the current lock-down.  If they are prudent they will also have re-insurance arrangements in place to help with their losses.  The Government levy on every premium (currently 5%), is there to protect the consumer against failures.  It would be better if the Insurers that have a policy liability, settle with dignity, rather than sending our small business community down, beyond recovery, to the detriment of all.

Jim Flannery ACII, Director