A View From The Press Box

At one time, our then wise president spent time in management meetings, and employee forums, getting the word out on current issues that were of importance to the industry. He asked every employee to avail themselves of the knowledge on hand, and if they could, to either answer questions on insurance or to direct those questions to others who could answer them.

We were never sued over answers to what amounted to mostly mundane questions. I don't believe we ever heard of any backlash, or even if there was an attempt to answer questions beyone an employee's perview--such as to answer claimant questions on a loss when it wasn't their case, or give safety and health information when an employee wasn't from safety services. It just wasn't done.

Primarily it was to act, as Sam noted, as "ambassadors" and get the word out on just who we were, what we do and what the insurance business really is all about. I believe in some small part that it worked.

If the big companies want to stifle their employees from talking about the company, they should stop them from saying anything good or bad. Thus, no question of truth or lies.

Are you in Good Hands? I don't know! Am I a Good Neighbor? No Comment! Heck, they'll all have to change their tagline to the "Silent Company"!

Having been in the industry for over 30 years, it is not hard to see what existed then still brings us down today. This industry continues to be the most misunderstood, berated, disrespected and distrusted. The reasons can be many, but certainly not challenging those who have chastised us publicly has played a significant part.

When challenged, my normal response would be “have at it,” but there are far too many within our industry that lack the knowledge and skills needed to accurately and adequately meet those challenges.

They have placed themselves in, or have been placed in, an 8 x 8 cubicle and very rarely make an appearance outside that arena. They are more in tune to doing their job, and either never knew or forgot what makes their industry clock tick.

Here’s some simple advice that could help reverse our direction and/or fate.

--Get involved; learn more about your company, your industry and, equally important, your community and spread the “good word.”

--Don’t be shy and don’t back off when challenged, but do it professionally and diplomatically.

--But, before your do respond, learn the facts and practice, practice, practice your delivery.

--Then don’t wait until you’re asked but, rather, be the aggressor and “go for it.”

Remember, we cannot rely on a few to be our spokesperson(s), as we must all meet those challenges.

Sam, I enjoy reading your blog and thought I might comment on your last two posts in that they are near and dear subjects to my heart as head of public affairs for State Farm.

As to today’s post (“Don’t Gag Your Ambassadors”), I could not agree with you more. Unfortunately companies in and out of the insurance industry hone too tightly to the notion of “one voice” and want literally one person speaking for their company’s interests.

That is foolish today, especially in a more media diffuse world where fewer people (particularly younger ones) are getting their information from traditional media (newspapers, radio, TV).

Instead companies would be smart to follow a “one message, many voices” approach: where companies provide their associates with timely information and context about breaking news, and then permit them to share what they know with friends, family and their favorite blogs (still, of course, protecting any proprietary info).

As to last week’s post (“Reality Check”), when you state “insurers might need to refuel their tanks,” I trust your readers understand that premium increases are not sought to defray past expenses, but instead to meet the perceived risks of the future.

As a result of the hurricanes in 2004 and 2005, rating agencies are requiring greater reserves to meet the needs of future catastrophes. Many insurers, also as a result of the events of 2004 and 2005, are purchasing more reinsurance on the open market.

Reinsurance rates, as a consequence, are significantly higher and contributing to the significantly higher premiums policyholders are paying in most coastal areas.

Mr. Natalizio’s comments to last week’s post point up the need for yet another reality check. He suggests that State Farm denied claims unless policyholders sued the company. Nothing could be further from the truth. More than $1 billion was paid out by the company before any cases went to court and most claims were settled within a few months of the storm.

Many of the claims that landed in dispute involved serious issues about what was covered and what was not. There were cases where storm surge (water) clearly caused all, if not substantially all of the destruction or damage, and some people believed that their insurer should be liable for the total cost and contents of their home--even though their insurance contract explicitly stated that such were not covered.

Sadl,y too few take advantage of the flood coverage made available through the National Flood Insurance Program since 1968 (fewer than 20% in the coastal areas hit by Katrina in Mississippi versus more than 60% in Louisiana) and that can be purchased from most coastal insurance agents.

But, Sam, you are right. There are lessons to be learned from recent events. Many of them are associated with the way we communicate with the public at-large and with policyholders. So many thanks for your comments.

Relying on one's employees to be ambassadors might have been a good idea when employees had a sense of corporate allegiance fostered by the "retire after 25 with the gold watch" mentality.

In today's world, where that is no longer the case and where employees are more mobile and less servile, this might not be the ideal situation.

Being a number in the corporate scheme of things doesn't really incite an employee.

In the good, old days, the insurance industry focused on relationships. The industry was ruled by folks who knew and liked people and understood the risks people faced. We worked together with our clients to spread and manage these shared risks.

CPAs and lawyers and actuaries were closeted and recognized as part of the process--MBAs were not yet born.

Today lawyers, actuaries, CPAs, and MBAs rule the industry, and stand as a firewall between the people that pay for and use our products/services-- the policyholders and those who deliver these products/services--agents, underwriters, adjusters, engineers, etc.

At one time we were driven by passion, common sense and the common good, trust, and utmost good faith. We were successful, respected and profitable.

Today we are driven by regulation, bureaucracy, distrust, procedures and the next quarterly statement. Common sense, trust, the common good and passion have been discouraged, if not totally prohibited. We remain profitable today.

Is it time for a trip down Memory Lane?

Marc Dubois has hit the nail right on the head with his comments.

As I stated in my comments, "our then wise president" was revered by the employees and was on the cutting edge of communications and maintaining employee morale.
He thought about the impact on employees before making decisions and always had their best interests at heart.

He is long gone, replaced by one who makes decisions with an "employee-be damned" attitude, doesn't communicate on a humanistic level, and is disliked behind his back by most employees.

Morale and corporate passion has died with the hiring, firing and short-term employment that I have seen. The disposable employee is more fact than fiction. Management has no sense of loyalty to the employees, regardless of length of service, and the employees feel the same way.

Respect begets respect, so why should the corporate structure expect anything but loathing from those they disrespect from the moment they sign on? Five, 10, or 20-plus years and a new regime signs on, and all your work is history.

Then a new regime comes aboard a short time later, and that changes again as they clean house and hire all their cohorts from another company.

We called it "seagull management"--they crap all over everything and then fly off, leaving a mess to clean up!

As Marc so aptly states, being a number in the overall scheme doesn't incite corporate loyalty.

Thanks for jogging the reality switch, Marc!

Mike Manes,

I'm glad you remember the good times, but I think your memory is a little fuzzy.

Management teams of 20-to-30 years ago left gaping holes in balance sheets that are still being repaired today (if the companies survived at all) and had very poor understanding of both legal and natural catastrophe exposure.

When Hurricane Andrew hit, there were insolvencies everywhere, but 15 years later, the industry was able to withstand a five-year strech of 2001 through 2005 that produced record losses with few major insolvencies.

The actuaries, lawyers and CPAs of today are in charge because the management teams of the previous years didn't have the ability or foresight to recognize and deal with the risks they were taking.

If insurers were sincerely intent on promoting goodwill, then put the veteran claims folks back in charge of the claims departments. Get rid of the pencil-pushing numbes- crunchers from underwriting and the actuarial department.

You can spend all kinds of money on publicity to promote people buying the product, but the true test lies in proper claims-handling.

There is a sad lack of employee appreciation and training. Historically seen as a "loss" department rather than a "profit" (read underwriting) center, training and continuing ed have been put on the backburner.

In times of catastrophe, claims-handling abilities are stretched to the limit, and unfortunately the folks in charge just aren't the right ones to make sound business decisions.

Rather than spend millions on publicity, pay the folks who deal with your customer base a whole lot better, and treat your adjusting team with respect--not just as pawns in a game--and maybe then your "sincere" efforts to improve your image will be realized.

It is amazing to me that people don’t feel comfortable standing up for the insurance industry.

Every time I have to defend our industry to friends and family, I always tell them that insurance is the risk mechanism that allows all of us to function on a daily basis. I remind my friends that insurance plays a vital role in the world economy, without which no one could earn a living.

I try framing this discussion in straightforward terms. I always ask them what bank would give them a mortgage without acquiring title insurance or a homeowners policy, or what company could operate if they didn’t have workers' compensation coverage to protect workers who get injured while performing their jobs, etc.

I also think that the insurance industry has missed the boat over the past 20 years by failing to promote our industry to the best and brightest graduating from our universities. The war for talent is not hype, and actively recruiting young leaders must be a core strategy for the industry if we are to successfully compete for the “knowledge-based” workforce.

At the end of the day, employees of a specific insurance company may or may not feel comfortable defending their employer. However, if so, they are doing everyone a disservice--friends and family specifically, if they at least don’t defend the insurance industry as a whole.

If we don’t start feeling comfortable doing that, we might suffer the effects of the “law of unintended consequences”--which, in the case of the insurance industry, might be reduction or elimination of coverage because of draconian legislation.

At the end of the day, if the members of the insurance community do not defend this important industry, our friends and family members will suffer greatly in the future.

Regardless of the industry, employees should believe in what they do and have some allegiance to their employer.

As a 30-year insurance industry person, I believe it is still a noble profession. We protect the most valuable assets people hold dear.

I used to cringe when someone insulted the industry and called it a rip-off. Now I politely remind them that insurance companies will replace their car, home, or life income for a very small fraction of the value. Would they be willing to do this for their neighbor?

The insurance corporate offices need to equip employees to speak up when appropriate and be the PR people in the world around them. We need all the positive PR we can get!