How to change negative public perception of insurance

Canada’s property and casualty insurance industry has an opportunity to change the general public’s negative perception of the industry, says Kenny Nicholls, president and CEO of Western Financial Group.  

“I often hear people in our industry talk about how negatively the general population talks about insurance and it makes me cringe,” Nicholls says. “In the end…all industry participants own that image, so if you don’t like it, you should change it.” 

The industry alone has the power to change that perception, but how? 

“I think we need to make insurance more human, more caring — as it is — and tell everybody about it,” Nicholls suggests. 

Fewer numbers and statistics, as well as more unity and commonality of policy wording should help, Nicholls says. “Everybody’s trying to be on their own, but for a customer, it’s complicated,” he says. “For a broker, it’s also complicated. Why can’t we have it more common and more industry cooperation as well?” 

That’s not to say data, algorithms, and regulatory compliance aren’t important. “But I don’t think we need to throw it in front of the customer and get the customer involved in all these issues. 

“There’s technology today that allows us to keep that in the background and offer a great experience to customers.” 

 

Necessary evil?

Despite the societal benefits of insurance — which allows people to legally drive cars and safeguard their homes and loved ones — it’s still seen as a “necessary evil,” Nicholls says. This is why he’s calling for all industry participants to come together to help change the perception. 

“If we don’t do it, unfortunately, we might actually be surprised by someone completely outside doing it for us,” Nicholls says. “I think we’ve kept the disruptors at bay thus far, but let’s not wait until someone comes in and makes insurance feel more human and more friendly.” 

For its part, Western is working to make insurance more understandable to customers and trying to attract university students to the industry. The brokerage recently hired chief customer experience officer Lisa Colangelo to represent customers. Colangelo and her team’s actions have improved the brokerage’s Net Promoter Score from a high of 63 in 2022 to 73 in the first quarter of 2024.  

“This score’s considered [the] top decile of not just insurance but of all financial service companies,” Nicholls says, adding he’s striving for an NPS of 75. 

Brokers also have a role to play by explaining wordings to help consumers understand policies. And carriers need to ensure policy wordings are clear. 

Nicholls recommends industry players find a way to differentiate themselves on their service levels.

“How quickly can you come back to a broker? How quickly can you come back to a customer or a policyholder that has a claim?” he says. “That’s where the focus should be.”  

As it stands, the industry remains fragmented, especially from a technology perspective. Some industry participants, particularly those whose direct-to-consumer offerings are affected, aren’t willing to collaborate to develop a unique and seamless tech environment. 

“This would allow brokers to have a seamless connection with pretty much all carriers, similar to what you have in other financial service industries, like the banking sector, where they have a common settling system,” Nicholls says. 

There is an initiative — supported by Western and some other brokerages and carriers — to lobby the Centre for Study of Insurance Operations to work on technology accessibility. “I’m happy to see that this proposal was accepted by the board at CSIO, and we’re seeing some industry players working together to try to develop those tools. 

“There was a time where, in the banking industry and the securities industry, they all had a similar issue,” Nicholls says. “But the players all decided to come together.  

“I don’t think the [insurance] industry is quite there yet with some players. We’ve got some carriers that are truly committed to getting this done, but unfortunately, not all.”

 

Feature image by iStock.com/wassam siddique