Ask yourself this: How many doctors have had their reputations ruined by the Coronavirus?
"Not many, if any."
Indeed, since the pandemic struck most have been appreciated more and have seen their social stock rise.
Now, how many insurance companies and brokers have had their reputations enhanced by the Covid pandemic?
Not many, if any. Actually let’s just say none.
Most have encountered serious reputational problems. Even those that previously enjoyed highly trusted brands have seen their halos slip.
Open any newspaper and you will find disdain for insurers refusing cover for Covid in direct proportion to the praise being heaped upon the men and women with the stethoscopes and the white coats.
The simple fact is that the insurance industry routinely makes implied promises it doesn’t keep. Meanwhile doctors never promise anything!
For example. Flu is a highly contagious and potentially very dangerous virus.
I had a flu jab in the autumn of 2019.
But when the Pandemic-laden spring of 2020 sprang, did I blame the medical profession for not protecting me?
Had I not just been vaccinated against a contagious and dangerous virus? And here, in front of my very eyes was a highly contagious and dangerous virus threatening my life and that of my loved ones.
Yet of course I did not feel any disappointment or anger towards the medics.
This is because the doctors never promised me anything.
Even when doctors are 100% certain of something, they hedge their bets.
Before undertaking the smallest procedure they will still caution me, that although 94% effective in men of my age, there is still an outside chance that whatever they are doing will cause me incontinence, impotence, madness or death!
Just watch US drug ads on TV to see what I mean. The roll-call of doom-laden potential side effects always seems to outweigh any claimed benefit of the potion being sold.
Medical folks are masters of under-promising and over delivering. Insurers on the other hand have a massive inverse problem.
We sell certainty. We sell peace of mind in an unpredictable world. Yet our guess as to what the future will hold is as good as anybody else’s.
If we had been the ones selling flu vaccines, we would have done it in such a way that our customers would walk out of the surgery thinking that the magic jab would cover them against ALL viruses.
Yes, we might give the patient a leaflet to take home containing disclaimers, but the customer would still have the impression that they were buying the absence of virus-related worry for a full year.
If insurers sold vaccines like they sell insurance, their customers would have burned their offices in the first half of 2020.
We need to fundamentally change the product and the way we sell it.
A typical insuring clause says that the insured will be indemnified for all things arising out of an activity or all bad things that could happen to an asset. It then lists a load of exclusions where this won’t apply.
The trouble is that we can only exclude the things that we know about. The things we don’t know about or haven’t thought of don’t make the list.
Exclusion lists read like a weird history of bizarre and unexpected historical events that have occurred, rather than a coherent and logical strategy for focusing cover on where it is needed.
My personal favourite has always been the exclusion of losses arising from the fall of advertising hoardings to be found in most standard liability policies. How often does this really happen? Should the safety-conscious among us don helmets as they enter peak zones like Piccadilly Circus or Times Square?
It doesn’t matter. It obviously happened once and an insurer had to pay a loss when they weren’t expecting it and lo, a new universal exclusion was born!
Clearly we need to ditch the concept of “all-risks minus exclusions” and go back to named perils. Fire insurance covers fire. Flood covers flood. Simple.
That’s what the doctors would do. You want 92% measles protection? Have a measles jab, but don’t come complaining to me if you get mumps! And yes, sorry, you might even still get measles too! Technology will also come into play here.
The adoption of mass consumer parametric products should make insurance so simple it won’t need a wording:
“If our clever device gets wet, we pay you $X for flood, if it doesn’t we don’t.” Everyone can understand that.
So let’s take a leaf out of the doctors’ book and stop making promises that we can’t hope to deliver. Maybe they won’t paint rainbows, toot car horns and clap for us, but our customers will thank us for it in the long run.
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