[Opinion] Shooting of US health insurance CEO thoughts
The shooting of US health insurance chief executive Brian Thompson has lessons for insurers.
Monday, December 16th 2024, 4:31PM
by Steve Wright
The shooting of Brian Thompson, the CEO of United Healthcare (UHC) by, according to the media reports, someone who was unhappy with UHC or healthcare insurers generally, is shocking. No doubt more detail will emerge over time.
Almost as shocking is the reported high level of support expressed for the shooter. When there is so much unhappiness with insurance or insurers, something is wrong. Either the insurers (or many of them) are not acting properly and in good faith or the public has unfair and unrealistic expectations of them.
Nobody is happy when an insurance claim is declined. Presumably most people make claims thinking they have a valid claim, one covered by their particular insurance policy.
Does denial of a claim, correctly made under the policy wording, justify unreasonable unhappiness with insurance or the shooting of the CEO? Obviously not!
So how does it get to this and are we in New Zealand safe from such unhappiness?
I know nothing about insurance in the USA, but I have no reason to believe New Zealand life and health insurers act other than in utmost good faith (as they are required by law to do) when it comes to paying claims. Do they get claims wrong sometimes? Undoubtedly!
This is where a great adviser can be invaluable, not only in assisting to ensure incorrectly declined claims are made good, but also in shaping client expectations and understanding through advice and education. The obligation to educate should not, however, rest solely with insurers and advisers.
I suspect that extreme unhappiness at declined claims is probably fuelled by poor understanding of insurance principles in general and policy wording provisions in particular, which drives unrealistic expectations. This is not helped by uninformed and unfair, public and private comment regarding insurance and insurers.
Unfair and unrealistic expectations about life and health insurance can be reduced through education fostering improved insurance knowledge and understanding. I think it’s an obligation of all reasonable and responsible people, advisers, insurers, regulators, disputes resolution schemes, Government and especially the media, to do their part to reduce unrealistic insurance expectations.
The industry in particular has a lot to gain from improved insurance knowledge and understanding. I believe we would be well served if, by way of example:
- Insurers made their policy wordings available publicly, along with easy-to-understand explanations of what is and isn’t covered, in language free of insurance jargon;
- Insurers take every reasonable step to ensure their claims teams deliver excellent, technically correct, claims decisions and are able to communicate decisions to disappointed policyholders with compassion and suitable justification and explanation;
- Advisers continuously skill-up on product detail and all the other knowledge necessary for educating clients and then giving them suitable information and advice;
- I’d like to see insurance marketing that doesn’t include inuendo that effectively brings insurance and insurance companies into disrepute.
I’d also like to see more good news life and health insurance stories from the media. Perhaps they could start by highlighting the three billion dollars paid by life and health insurers in claims last year.
The life insurance industry in New Zealand is an important and valuable part of our economy. It employs thousands and effectively transfers a big portion of the financial cost of caring for the sick, the disabled and those who’ve lost breadwinners, off the taxpayer, allowing the Government to utilise their taxes for other important functions.
Let’s all work harder to improve the appreciation of life and health insurance and all it does for us individually and as a Nation.
Steve Wright has qualifications in economics, law, tax, and financial planning. He has spent the last 20 years in sales, product, and professional development roles with insurers. He is now independent and helping advisers mitigate advice risk through training and advice coaching.
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