It's time we got out and told the good story about insurance

Russell Hutchinson takes umbrage with the media bashing insurance; and says it's up to advisers to get out and tell the story.

Monday, February 3rd 2020, 11:43AM

It is very depressing to see this tone set in the media. The headline above seems to be the starting point for any article on insurance these days.

For example, in an article on travel insurance coverage and the impact of the coronavirus, the headline was: “Insurance may not pay out for coronavirus.”

The headline makes it sound like if you catch the virus your treatment would not be covered, but it would. It could be interpreted that if your flight was cancelled then you might not be covered. But you would be.

The only circumstance the insurer mentioned in the article was if you had booked travel after the virus was known to be spreading and you have merely changed your mind. Travel insurance doesn’t cover changing your mind – which I think is fair enough.

But some journalists don’t.

The industry has problems. Tainted by reports from Australia about "junk insurance" emerging from the Hayne Commission investigations, we have now had a report from our own Reserve Bank which raised questions about the claims payment ratio.

Clearly, the efficiency of the industry is in focus. But people do not buy “insurance” from “the industry.” Instead, clients buy a specific product from an individual insurer.

There are plenty of products from insurers that have higher claims payment ratios. What’s more, I know insurance is the only way to create an estate of hundreds of thousands of dollars for a young family from just a few dollars a week.

I know that financial risk transfer is the only way to provide any meaningful protection for most catastrophic risks for all but the richest people in New Zealand. You know that too, of course.

Most of the insurance on sale is of good value. But consumer-focused media aren’t there to tell our story.

They are there to shock, make people click through to an article, to raise their blood pressure a bit. Heck, if it creates the interest necessary to tackle issues like insurance law reform, and the challenges in income protection that have bedevilled us for years, I shall be very happy about it.

But that leaves it up to us to tell our story. It’s “ours” of course, only to the extent that we share a goal.

I am positive about insurance. I want people to know that it’s a viable solution to the problem of financial risks. I want them to have their families protected.

But the story doesn’t just tell itself. We have to tell it.

Tags: insurance Russell Hutchinson