Perception or Reality?

An interesting news release recently slipped into my e-mail box; it concerned the public’s perception of the insurance industry in the wake of Hurricane Katrina.

The market research company, Ipsos Public Affairs, was spreading the news about the results of an online survey it conducted of approximately 1,000 U.S. adults. Ipsos said its post-Katrina study showed “that while nearly all respondents approve of the job being done by charities and non-profits, only 18 percent approve of the job being done by the insurance industry. Forty-three percent of Americans disapprove of the job being done by insurance companies and 39 percent are unable to take sides at this time.” In the survey, the insurance industry rated below all levels of government–national, state and local–according to Ipsos.

This is not welcome news for the industry, which battles perception problems in the best of times. Federal, state and local governments took a public beating–deserved or not–in the media for their catastrophe response in Katrina’s wake. To be rated lower in the public’s eye than the much-maligned government entities, even in a poll of 1,000, can’t be a good thing.

But how much does the public’s perception of the insurance industry’s response to catastrophes reflect reality? Not having personally visited the scenes of destruction after Hurricanes Katrina, Rita and Wilma, I can’t say for sure, but anecdotal evidence tells me that the people who work in the insurance industry are doing everything humanly possible to help the devastated communities in Texas, Louisiana, Mississippi, Alabama and Florida restore their lives and living conditions. Much of the public may not realize that insurance agents and companies located in these storm-torn areas suffered from the destructive hurricane forces along with everyone else. In addition, adjusters from all over the country will leave their families for weeks, if not months, at a time, assessing the extent of the damage and helping insureds get the coverage they paid for.

However, regardless of whether what the public believes about the insurance industry’s catastrophe response is completely at odds with reality or not, the industry, which touts itself as a trustworthy partner in protecting this country’s homes and businesses, obviously has a hefty public relations job to tackle.

The Ipsos survey also found that while nearly 87 percent of Americans have auto insurance, 67 percent have homeowner’s or renter’s insurance and only 8 percent have flood insurance. Further, about 47 percent of Americans with a household income of less than $25,000 have insurance for their homes, compared with 80 percent of Americans with a household income of $50,000 or more.