The name says it all.
The revelations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry have had a negative impact on perceptions of the entire financial services sector. The insurance industry is no exception, with brands experiencing reputational damage regardless of having acted improperly or not.
At a time when Australians are dealing with the fallout from unprecedented bushfires and drought, and are coming to terms with the ‘new normal’ of our environment, the role of the insurance sector has never been more important. It is vital that trust in the sector be regained as quickly as possible so the community can better manage the risks we face today.
While firms in the insurance space are all tarred with the same brush to some degree, the Royal Commission presents a unique opportunity for your brand to differentiate and engage more deeply with customers and prospects.
What’s the impact?
In addition to the industry-wide action required to redress this negative perception, the key questions individual organisations need to ask are: Will it affect our revenue (short and long term), and what can we do about it?
Ultimately, you need to determine:
- Is the impact so significant that consumers will reduce, cancel or no longer buy insurance products?
- How long might this negative purchasing attitude last? (Could you ‘ride it out’?)
- How loyal are your customers? (Will your service quality and product differentiation overcome any backlash? Or do you have a transactional relationship and customers will look elsewhere?)
- Are you all in the same perception boat – or are some brokers or underwriters perceived to be more reputable, and may therefore benefit at your expense?
What can you do about it?
The significant backlash from the Royal Commission will take more than a photo shoot and new tag line to overcome. When faced with brand and reputational damage like this, you have two broad options:
- Ignore it. Large firms playing the long game may be able to get away with ‘business as usual’ until the dust settles. They’re more likely to have the kind of brand equity and resources to withstand a sustained period of reduced revenue, and ‘relaunch’ their brand once the backlash has died down.
- Address it. While you don’t want to dwell on the negatives from the Royal Commission, the fact is the insurance sector is facing heightened scrutiny, and there’s every chance it will be top-of-mind for customers. So it’s best to address the elephant in the room: yes, the insurance sector has behaved below expected standards. Addressing the issue, and agreeing the industry needs to improve, opens the door to differentiation. Detail how you’ve embraced the opportunity to review all aspects of your operation in order to deliver fairer and better products and services to consumers.
Tools to help you own it
You have an opportunity to change the conversation and differentiate your brand by sharing with customers the meaningful changes you’ve made. Ultimately, these changes – backed up by communications – are about rebuilding trust. Here are just a few examples of how this might look:
Customer experience. When your reputation is in question, actions speak louder than words. The changes you make to your customer processes over the next 24 months are critical. The focus needs to be on the impacts and benefits for customers: how they will be better protected and better placed as a result of these changes.
Customer communications. Diffuse any potential backlash to your messages by acknowledging the issues the sector is facing, then shift the conversation to the positives: the changes you have made to address these issues, and the benefits of these changes for customers.
- Letter to customers. This is a great way for your organisation’s leadership to formally address the issue, and detail the changes you have made to processes and procedures as a result (with a focus on the impact for the customer).
- Blog/vlog. Consider an ongoing blog or vlog (video blog) as a ‘behind the scenes’ glimpse into how you are tackling the many layers of this issue, and your multiple responses. A video series in particular will showcase your human side by allowing the personality of your team to come through. Where possible, provide real customer examples (case studies) to illustrate the benefits of the changes you have made.
- Home page video. Nothing says ‘we take this seriously’ like a leader acknowledging an issue front-and-centre, and stating the changes you have made to avoid any recurrence.
If there’s anything to be learned from previous episodes of reputational damage – ranging from catastrophic man-made disasters (the global financial crisis) to less devastating but just-as-absorbing scandals (such as cricket’s ‘Sandpapergate’) – it’s that in most cases, reputational repair is possible.
Australians are a pretty forgiving lot; provided you show you have been listening to the concerns of the community, and most importantly that you have taken positive and meaningful action to avoid a repeat, you will be welcomed back with open arms in time.
