How the Insurance Sector Can Insure its Own Reputation
This year, the US Insurance sector saw a reputational decline of 4.3-points. While this is more than the average US company decline, it’s comparable to some industry declines, like Consumer that dipped 4.4-points.
Our data shows there is hope of a reputational recovery on the horizon, but the key question must be answered: How can US insurance companies work to improve their reputation and trust with the public.
5 Ways the Insurance Sector Can Get a Boost in Reputation and Trust
The Insurance sector has work to do when improving reputation and trust in the eyes of their stakeholders. Based on our data, here’s how:
- Understand the unique challenges facing the Insurance sector.
With an average reputation score of 66.4, the Insurance sector falls just between its two competitor sectors, with Healthcare scoring 70.5 and Financial Services at 65.0. But what drives Insurance is not identical to these industries, with Innovation, Workplace, and Performance dimensions having a higher impact on Insurance than they do in Healthcare or Financial Services.
To differentiate, Insurance sector leaders should focus on these three dimensions.
Figure 1: Insurance Industry, Financial Industry, and Healthcare Reputation Scores
- Know and drive what matters most.
The most impactful dimensions on Insurance are Products/Services, Governance, and Citizenship, in that order. However, we do see some differentiation in category breakdown, with Innovation replacing Citizenship in Healthcare. Products/Services is generally gaining in reputational importance since last year, while Governance and Citizenship are losing traction. The Insurance sector must understand and embrace what which drives reputation in order to mitigate reputational risk.
Figure 2: US Insurance Driver Weights 2018: Healthcare, P&C, and Life Insurance Categories
- Healthcare: Deliver on Innovation.
Healthcare insurance, as stated above, sees higher reputational importance for Innovation than P&C and Life Insurance companies do. And yet, it scores lowest on this dimension, and has seen the largest reputation declines here among all categories. Health Insurance companies must work on being perceived as more innovative to differentiate and outperform other sectors.
Figure 3: US Insurance Sector Innovation Graph 2018, Innovation Score by Innovation Weight
- P&C: Focus on brand—specifically brand relevancy.
All Insurance companies are impacted by brand and expressiveness. Expressiveness — compromised of brand strength, relevancy, and informativeness — is critical to insurance companies, impacting 28% of overall Insurance reputation. However, relevancy is the biggest opportunity among P&C companies, accounting for 40% of expressiveness and 9% of overall P&C reputation. For P&C companies to maintain relevancy, they must score high among the following: relevant communication, value alignment, and open communication with the public. However, P&C companies must improve their performance here, for they only score in the average range at 62.5.
- Life Insurance: Work on corporate responsibility.
While Governance and Citizenship are losing traction for both health and P&C insurance companies, they are gaining in reputational importance for Life Insurance companies. The biggest reputational opportunity for Life Insurance companies is to focus on these two dimensions. However, these are areas in which the category is struggling. Life Insurance companies have seen a 2.9-point decline in Citizenship and a 4.4-point decline in Governance since 2017.
Figure 5: US Insurance Governance & Citizenship Dimension Weight Changes: 2017 to 2018
2018 US Insurance RepTrak
This year, USAA Insurance tops the list as the most reputable insurance company in 2018, with a strong reputation score of 75.7. USAA has continuously remained top of our lists over the years. We congratulate them for their reputational success. Blue Cross Blue Shield ranks as the most reputable health Insurance company, while MetLife is the most reputable Life Insurance company.
Figure 6: 2018 US Insurance RepTrak
Signs of a Reputational Recovery for Insurance
Since Q1, US Insurance has seen a 4.9-point increase in score. This is hopeful for Insurance company reputational improvement in 2019. However, in order to proactively manage reputation and avoid risk, the sector must heed the above recommendations.
About the Study
The US Insurance RepTrak was conducted in Q1 2018 and included 2,920 respondents and 44 insurance companies. The insurance companies fell into one of three categories: health insurance, P&C, and/or life. Respondents must self-identify as being somewhat to very familiar with the company to continue the survey.