Why people say insurers have no compassion

Thursday, 12 September 2019

Research by Horizon Research for the Financial Services Council shows many of us do think about the risks to our financial futures, but choose to push those thoughts aside, and do nothing.

OPINION: Watching a roomful of life insurance company executives and advisers trying to work out why the public doesn't trust them is a weird experience.

After listening with bemusement at the session at an Auckland insurance conference on September 11, I concluded they genuinely don't know.

It is hard for anyone to truly see themselves as others do, so perhaps we should not blame an industry which has shrunk in real terms in the last 10-to-15 years despite a growing economy and population.

People fear insurance companies because they recognise how powerful, moneyed and big they are compared to the little people who rely on them to pay claims.

Could it be unfair media coverage they wondered? Err, no.

* Door to insurance heaven, or hell?

* 'Complacent' life insurers aren't giving customers good value

* Paying insurance premiums on your dead dog**

Could it be the public is too ill-informed to understand how wonderful they were, and how insurance works? Stop it, you're making me laugh.

Could it be that insurers struggle to speak in human language and explain what their policies really cover? Why, yes, that's part of it, but not the biggest part.

Here's the truth: Most members of the public see insurers as giant, compassionless corporates who have immense amounts of money, immense amounts of power, and the best lawyers in town.

People understand they need insurers, but are fearful that at claims time all the power lies with the insurers, not them.

Insurers control the claims process. They hire the 'loss adjusters'. They control the timeframes.

The public understands that our civil justice system favours an insurer with bags of money over, for example, the distraught owner of an earthquake-damaged house, or the victim of a heart attack told they failed to disclose something when they applied for their policy.

We should have long since created a specialised online insurance court able to deal with disputes in a timely fashion (by which I mean months, not years), but civil justice has never been any politician's priority.

Now, the public may not think insurers are actually evil, but they fear they might one day find themselves having a legitimate claim turned down, and be powerless to fight back.

Research published at the conference showed just 12 per cent of people agreed with the statement: 'Insurance companies are considerate and compassionate'.

And 13 per cent agreed that 'Insurance companies are on my side', and just 15 per cent agreed 'insurance companies do a lot of good in the community'.

And while 35 per cent of people agreed 'I had a good result when I made a claim previously', 19 per cent actively disagreed.

I'm obviously not as down on life insurers as many people.

But when only one in eight of your customers think you have a heart, and you have disappointed one in five, you are an industry with a massive problem.

Fortunately, the government plans to help insurers win the love and respect they have failed to earn for themselves.

Commerce Minister Kris Faafoi plans to pass 'conduct' laws on banks and insurers giving them legal duties to treat customers fairly.

That must happen, and as Faafoi represents you, send him your letters and emails to stiffen his resolve.

Until it happens, it's a case of adopting the best self-defence strategies against insurers you can.

Read your policies.

Make sure you've told your insurers everything you should have. If you are worried, call them now, and check.

And make it clear you are not a pushover, and will not accept a legitimate claim being declined in silence, or without a fight.

GOLDEN RULES:

* Read your policies

* Verify everything an insurer tells you

* Make it clear you are to be taken seriously