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PR pros give insurance companies low grades post-Katrina

Mississippi public relations professionals give low grades to the insurance industry for how it has handled the post-Katrina challenges in Mississippi.

“I give them an ‘F,’” says Reed Guice, CEO of The Guice Agency, Biloxi. “Here’s the thing. As a public relations professional, my number one directive to my clients and to myself is to always tell the truth. And it appears to me that many of the insurance companies in their statements to the press have either used half-truths or outright lies. That has caused the media to become very skeptical of anything the insurance industry has to say.

“As an advertising professional, it is interesting for me to see their advertising messages, which are in stark contrast to reality. Nothing will kill a product faster. Good neighbor? Give me a break.”

What would he do differently if he was representing an insurance company? Guice says until the insurance companies start treating customers right, no amount of public relations or advertising dollars can shine their tarnished reputation.

“My heart goes out to the local agents who have to represent these companies,” Guice says. “To me, they are getting unwarranted blame for what is going on.”

Liza Looser, CEO of The Cirlot Agency, Jackson, says insurance companies took a very stealthy approach after Hurricane Katrina. She said the companies have failed miserably to follow through on promises made to clients and hence have lost the trust of the public.

Looser’s parents lost their home in Hurricane Katrina, and yet the insurance company gave them only $7,000 for wind damage. Her parents lived in a small trailer for a year and a half during which time they were hospitalized numerous times. The insurance company finally settled with the couple, but not until they had gone through much stress.

Looser says no amount of public relations can compensate for the poor treatment many people received at the hands of the insurance companies. To rescue their reputation, the companies would have to be sound community stewards and aggressively support the community.

“Instead, many have left the state and people’s insurance has doubled,” Looser says. “People who are older and on fixed incomes, it is an incredible burden for them. But that is their home. They are at that age where they can’t pick up and leave.”

Insurance companies have further weakened people’s opinion of them by failing to offer wind insurance. Looser thinks that companies that do business in the state should offer all types of insurance, not just auto insurance.

It didn’t help the reputation of the industry when it showed record profits after Katrina.

“Corporations have to look at their bottom line and provide return to stockholders,” Looser said. “Everyone understands that. But to get up and leave because something bad has happened, or jack up rates incredibly high, is not right. No company wants to lose a lot of money. But with record profits and the fact they had the resources and the money to weather that storm, it was just a bump in the road for them. As far as being good stewards of what their industry represents, being a good corporate citizen, they lose miserably.”

Looser questions whether the large companies care about Mississippi. Because the state represents such a small percentage of the national market, they can easily pull out of the state without damaging the company long term.

Ted Riemann, president, The Prime Time Agency, Gulfport, said if a survey was done on the Gulf Coast asking people if they think insurance companies are truthful and honest, there would be 99% to 1% opposed to that proposition.

“What they have done is after taking a beating in public, they have just spun it,” Riemann says. “They have said, ‘We don’t want to talk about home insurance. We don’t want to talk about flood insurance. And we don’t want to talk about Katrina.’ What we want to talk to you about is we will sell you car insurance. That is exactly what they have done. It is a well thought out strategy. They are trying to pick the low fruit. The hard fruit they aren’t going to pick any more. It is a typical spin doctor move by the insurance companies.”

Lack of affordable business, commercial and home insurance on the Gulf Coast is a major impediment to the recovery. So many people are resentful of insurance companies red lining the region.

Riemann says no amount of good advertising or public relations can overcome the bad experiences people have had with their insurance companies.

“I don’t think they can win the game of ‘We’re a good neighbor’ because we know they are not,” Riemann says. “It is corporate greed, and I frankly don’t know what I could do for the insurance companies to bolster their positive image in this community. When people pay premiums every month, quarter or year, we expect service and we did not get it. I just don’t believe the hearts and minds of the Coast people are going to be swayed by any message the insurance companies puts out.”

Philip Shirley, president and CEO of the GodwinGroup in Jackson, says his advice to insurers is the same as to any other client, and it’s simple.

“Tell your story fully, frequently and repeatedly,” Shirley says. “Then trust the public to make reasonable decisions. As an irreplaceable cornerstone of any free economy, it is critical that the insurance industry continue to hold the trust of its stakeholders in business, government and the public. No two companies face the same situation, so judging their responses is neither practical nor helpful. The only issues that various insurance companies dealing with Katrina have in common is that the events happened on the same day.”

Contact MBJ contributing writer Becky Gillette at bgillette4@cox.net.

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