Sharing a Podium with The Governator

When someone asks you what you do for a living, how proudly do you say that you work in the insurance industry? I’m guessing you don’t beam about it like you might if you were, say, an astronaut.

But I’ll bet you say it with a little more confidence now than you did three years ago. Those were dark days for our industry’s image — the darkest ever, in fact. At that time, you couldn’t tell people you worked in this industry without bracing yourself. You were surely in for a rant about rising premiums, unfair underwriting and all-around “corporate greed.” And you’d be just as likely to get the speech from a business owner as a student. We were nobody’s friend.

Things are a lot better today. Our industry image rating has gone from an all-time low of 4.9 to an all-time high of 6.0.This turn-around in just 36 months is notable from many perspectives. To get a better idea of how significant a leap that is, I talked to Michael Marzolini, who is chair and founder of Pollara and one of the leading pollsters in the country.

He said:”Well, 4.9 is Stephane Dion, and 6.0 is Arnold Schwarzenegger.” (He has polled for both.)

He noted anything in the low 5s is decent for any individual or organization. David Suzuki is in the 6s, which is even better than Al Gore, who scores in the 5s. A score above 7 is pretty much unheard of, according to Marzolini.

He added: “A score of 6.0 means you have the right to speak. You are a respected voice with the public and with government. Not many people can win a war of words against someone with a 6.0.”

So, yes, our 6.0 image rating is significant. This extraordinary turn-around can be attributed to two things: a consumer-friendly insurance marketplace and IBC’s Restoring Consumer Confidence campaign.

Regrettably, there is a good chance we are about to lose one of these things — that is, the favourable insurance marketplace — so we ought not to abandon the other.

In his book, ‘The 18 Immutable Laws of Corporate Reputation,’Wall Street Journal editor Ronald J. Alsop writes: “When companies are firing on all cylinders, they build up ‘reputation capital’ to tide them over in turbulent times. It’s like opening a savings account for a rainy day.”

I think it’s safe to say our industry has been firing on all cylinders in recent years. The industry is financially strong. Premiums have come down and stayed down. Insurers are competing hard for business and promoting add-ons like identity-theft protection for homeowners’ policies and accident forgiveness for auto policies. We’ve made great strides in the afford-ability and availability of commercial lines as well.

But a consumer-friendly marketplace is not enough to bring an industry’s image up to Schwarzenegger levels. We’ve had soft markets before. But we’ve never gone Governator.

IBC’s Restoring Consumer Confidence campaign put us over the edge. Featuring ad campaigns and outreach in communities across the country, the campaign has helped the industry reconnect with consumers in a very real way. Through this outreach, we have supported injury prevention, emergency preparedness and road safety, starring the ever-popular driver distraction simulator, the D. U. M. B. Car. More recently we have ramped up the consumer education component of the campaign, with commercials and a re-tooled Web site to help Canadians better understand the insurance product. And every holiday season we sponsor the designated driving program Operation Red Nose.

The numbers tell a compelling story. During the three-year campaign, we have connected face-to-face with almost 150,000 Canadians at 220 community events. Through news media hits, we have reached a total of 5.7 million Canadians. The amount of negative media coverage about our industry dropped from 63% to 12%. Governments have noticed: We have received almost 160 letters of recognition from politicians.

In short, not only have Canadians been reaping the benefits of a healthy insurance market, they have also seen us giving back and doing good work all across the country.

So there’s no question we have a lot of “reputation capital” in the bank. But is it enough? The answer is no. Our image rating at the moment is high, but our hold on consumer trust is fragile. Our business is not easily understood and consumers are quick to hold us account- able, oftentimes with incomplete information. Given that we are very likely heading into more turbulent times, we cannot afford simply to rest on our laurels.

William G. Margaritis, corporate vice-president of communications with FedEx Corporation, said: “A strong corporate reputation is like a life preserver in a crisis and tailwind when you have an opportunity.”

For our industry, there is potential crisis. Consider that for 2007, in addition to what we know of 2008, claims cost growth has exceeded premium growth.

This is especially true for Ontario auto, which is by far our biggest line. Economic growth has exceeded growth in business insurance premiums since 2004, suggesting that premiums in that line are inadequate. And even Canadian property and casualty insurers are not immune to the global financial crisis.

All this strongly indicates we are facing a period of declining earnings, which may lead to a hardening market. In fact, there are some signs that we have already entered one. It seems reasonable to expect a period of time when consumers will be receiving more bad news than good from their insurers, and they may be a little perturbed.

Of course this is not the full extent of our issues. There’s also Ontario auto insurance reform, court challenges against minor injury caps in Alberta and the Atlantic provinces, the need to improve regulatory regimes all across the country and a host of other issues. The outcomes of these stories remain unknown. Who knows? In the end, they could prove to have been more opportunity than crisis.

Suffice to say, they are hot button topics that can translate into pocketbook issues. Hard markets. Auto insurance reform. Caps on pain and suffering awards. Regulatory burden. These are tough issues with which consumers and governments will grapple. And even when our positions are strong, and the facts are on our side, it can be difficult for us to look like the good guys when our customers gather around the kitchen table.

At times like these, it’s good to have banked some “reputation capital.” As Pollara’s Marzolini explained, our 6.0 rating gives us the right to be heard. We are a credible voice. So maybe, just maybe, if we find ourselves having to explain premium increases, or why excessive regulation is bad for consumers, we will be consulted and believed — at least to a greater degree than we have been believed in the past.

This is why we continue our work on IBC’s Restoring Consumer Confidence campaign.

We will be out in full force again in 2009.We will be in the communities. And we will be on the airwaves. We will deliver our messages about emergency preparedness, injury prevention and road safety to as many Canadians as we can find. And consumer education about insurance basics will continue as well. This is how we will continue to make deposits in that bank of good will and “reputation capital.”

This long-term investment will help you, as well, as an industry employee. The next time someone asks what you do for a living, hold your head up high when you tell them you’re in the insurance industry. You may not be an astronaut, but your image rating is right up there with the Governator’s.

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The next time someone asks what you do for a living, hold your head up high when you tell them you’re in the insurance industry: your image rating is right up there with The Governator’s.