4 lessons for insurers on building reputation before the crisis hits
Imagine this. The cost of your products is rapidly increasing, and the price increases look set to ramp up dramatically in the future. Higher prices don’t mean higher profit for you though – in fact, your profitability is falling. And to top it off, the higher your prices go, the greater the risk that the people who rely on your products will be financially ruined – and your reputation will be trashed too.
That’s precisely the position Australia’s insurers find themselves in. Climate change is already fuelling more frequent destructive weather and the impact on insurance premiums is unmistakable. In the year after 2022 – the most expensive year of Australian natural catastrophes – average premiums climbed 14%. It’s part of a broader trend, with home insurance premiums climbing three to five times faster than the consumer price index since the 1980s.
Far from making hay, insurers are facing falling profits and significant risks of public backlash, particularly as climate risks potentially make some areas uninsurable.
Matters are complicated by the fact that for many, insurance is a grudge purchase. So how can insurers – and the comms teams that tell their stories – translate big issues like climate resilience and the mental health crisis into clear, human narratives that demonstrate insurers’ value to communities, governments and customers?
This is exactly the question Mahlab hoped to answer earlier this month by bringing together almost a dozen of Australia’s leading insurance comms leaders for a roundtable.
Here are four key takeaways from the event.
1. It’s stories that can make insurance make sense
The insurance sector deals in the intangible. Like a life jacket, it’s a product one buys hoping never to use. But unlike a life vest, you cannot hold a policy in your hands. This abstraction, combined with the complicated realities of pooling and risk pricing, can create a significant barrier to understanding.
Despite concerted efforts, large gaps loom in insurance literacy – not just among the public, but also media and politicians. These gaps blunt comms impact. Education is key but its effectiveness hinges on crafting the stories that make why they should care clear and compelling.
Case studies that show real-world impact and employees who can tell those stories from the inside are the bridge – helping people see why it matters and how it works in practice.
2. The reputational risk is just as real as the challenges
Often, insurance is invisible. This invisibility is dangerous. If the only time a customer hears from their insurer is when they receive a bill, the relationship is purely transactional.
Whether it's soaring costs around mental health claims or escalating damage bills from climate-related events, insurers across both life and general are facing real pressure around sustainability and affordability crises. The sector has a long history of pushing mitigation measures, but risks still being in the firing line as certain products or regions become uninsurable.
The roundtable highlighted that without strong brands and compelling stories, insurers risk being shut out of policy debates or dismissed by the very people they protect. This is critical when discussing the future of uninsurable regions. If the industry is viewed solely as a grudge purchase, it lacks the social license to lead difficult conversations about where we can and cannot build homes in the future.
It all makes building reputation as trusted partners helping protect futures more important than ever.
3. Reputation is earned before a crisis and tested in it
The stories insurers tell in quiet times determine whether they are trusted in a crisis.
Trust is a bank account that cannot be filled overnight. When a crisis hits, the public’s reaction is filtered through their pre-existing perception of the brand. If the brand has been silent, or only present to collect premiums, there is no reservoir of goodwill to draw upon.
The participants noted that "always-on" storytelling is difficult to resource but essential for resilience. It requires a shift in cadence – moving from campaign-based spikes to a consistent drumbeat of value demonstration.
4. Insurers are getting better at delivering value outside of claims
Whether it’s text message warnings about forecast hail or multimedia experiences giving personalised information about weather-related risk and resilience, insurers across the board are elevating how they prove value to customers and broader community before disaster strikes.
Digital technologies are opening up new creative frontiers for doing this. These interventions do two things: they reduce the risk of a claim (protecting the insurer’s bottom line) and they demonstrate tangible care for the customer (protecting the insurer’s reputation).
The next challenge for comms leaders is to package these digital interventions into a cohesive story of partnership. Already, the comms teams at leading insurers are leaning into their vast troves of data to tell stories in new ways.
