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Four Challenges Facing Insurance Companies – And How Effective PR Can Help

While most industries are feeling the burn due to the COVID-19 crisis (as well as Africa’s economic climate in general), insurance companies in particular face a range of challenges within the consumer services market. Public sentiment and perception play a large part when it comes to business performance within this industry. Public relations (PR) and strategic communication can be pivotal in overcoming some of the major communication challenges facing insurers. Here’s why:

  1. Challenge: Negative Consumer Sentiment 

Let’s face it, the insurance industry often gets a bad rap and is negatively viewed by much of the consumer market. This is linked to perceptions that insurers will look for any loophole or technicality to get out of paying claims. And, historically, insurers themselves have perpetuated this view by doing just that. Adding to the fact that insurance premiums are a “grudge payment” for most people, especially those on a tight budget, its easy to see why it’s hard for insurance companies to drive positive brand perceptions and win the trust of consumers. 

How PR Can Help: A reputation management strategy should be drawn up as an action plan to positively shift perceptions and gain reputation equity within core markets. Elements such as building the thought leadership portfolios of the organisation and key brand personalities (such as the CEO or executives of a company) through value-rich op-eds and speaking engagements, for example, should form part of PR and reputation management plans for companies. Effective distribution channels and media networks are also important to ensure that these messages get out there and are received by relevant target audiences of the company. 

  1. Challenge: Communication Model Does Not Cater to Consumer Needs 

The consumer landscape has changed – what worked previously simply does not work as effectively now due to changing consumer and market dynamics. Current consumers demand transparency, access and personalised service from suppliers.  Insurers often fall short of meeting these demands – sometimes due to not actually knowing what their clients’ needs and priorities are. And in a customer experience-driven consumer environment, this will prove to be detrimental for business longevity and growth goals. Insurance companies spend a lot of money on customer service-related resources; however, much of it is inefficient use of spend because it is not in line with what clients actually want. 

How PR Can Help: Well, the starting point is to set up a perception audit to gauge brand sentiment with different target groups and demographics. Stakeholder mapping can also be done to get a clearer idea of what the priorities are for different stakeholders with a vested interest in the company. Such market and industry research will provide the insight needed for informed decision-making when it comes to brand activities. And this doesn’t just relate to PR and marketing activities – it can also play a valuable role in business decision-making, such as deciding into which services or markets to invest more resources into. 

  1. Challenge: Sensitive Nature of the Industry 

It’s not surprising that the consumer market in which insurers operate is a sensitive one. After all, its built around two factors that are very personal to most people, namely their financial security and healthcare cover. How does this affect insurance companies? Well, it means that a consumer issue can very quickly and easily escalate into a crisis – whether it relates to a group of consumers or even just a single client. And due again to the very personal and crucial services insurers provide, any type of crisis is likely to have a tangible impact on their bottom line, as negative publicity results in clients losing trust in a brand.

How PR Can Help: Its all about prevention. Insurers need to have crisis management plans in place to avoid the occurrence of a crisis. This is done by having expert crisis management teams work with insurance specialists to help identify possible crisis situations and develop strategies to avoid or prevent them. As it is not possible to predict every potential crisis, this also means having damage control plans in place to manage a crisis should it occur, as well as having communication frameworks prepared for handling a post-crisis environment. 

  1. Challenge: Highly Competitive Market 

Regardless of the type of insurance services offered (asset, health, life or a combination of different types), insurers operate within a highly competitive market. This is because services provided by the vast range of companies are very similar, leaving consumers spoilt for choice when it comes to selecting a new service provider or changing to an alternate one. 

How PR Can Help: Insurance companies need to find strategic and creative ways to differentiate themselves from competitors. This means investing in communication and messaging activities, and finding ways to position themselves as a value-adding brand. One of the best ways to achieve this is through a multi-faceted approach that includes integrated traditional, digital and social media campaigns that are in line with brand objectives. The actual (custom) content that is used as part of such campaigns is key to driving the success of activities and overall business goals. 

For insurance companies (or any business, for that matter), PR and communication activities should not be viewed in isolation to other business functions. They should form an integral part of results-driven business strategies. Companies simply cannot afford to overlook or underestimate the role that communication plays when it comes to boosting business results and market share. This relates to both internal and external stakeholder engagement and support. And given the competitive nature of the industry, insurers should view PR as a valuable tool that can help leverage their brand within the market. 

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