What To Do In An Insurance PR Crisis

By Robert Dixon

InsuranceNewsNet

When a consumer watchdog reporter shows up on your doorstep with lights and a camera crew, it’s too late to start planning your public relations response.

That was the experience of Midland Life after an Ogden, Utah, woman turned to the local TV station and state insurance officials out of frustration. After 25 years of paying an annual premium of $240 for her life insurance policy, Pauline Thompsen received a letter from Midland saying her premium “needs to be increased to $1,680.”

When she contacted Midland about it, she was told she hadn’t made any premium payments for several years. But Ms. Thompsen had cancelled checks to prove she made the payments, which consumer reporter Matt Gephardt at KUTV reported to the public.

Midland's response to the journalist's queries on the policyholder's behalf was similarly tone-deaf. "Midland is unable to provide to KUTV information concerning any of our policyholders," an attorney for the company wrote back. Midland soon changed tack and reinstated Thompsen's policy but, with news reports and a complaint filed with state regulators, the damage to Midland’s reputation had already been done.

Boston-based crisis management expert Bobbie Carlton says insurance companies need to have a crisis communications plan in place before that ominous letter or phone call arrives.

“Being prepared is the best thing you can do,” said Carlton, who has handled crises for companies in a variety of industries. Every company should have a crisis communication plan and have people trained to carry it out.  Executives and spokespeople should be media trained and know what to do, she advises. “When a true crisis hits, there's no time to have the deep philosophical discussions you should have as you work on a crisis communications plan."

She emphasizes that it’s necessary to address a situation quickly.  “Unhappy customers have lots of ways they can make their unhappiness known,” Carlton said in an interview with InsuranceNewsNet.

Social media allows people to instantly spread a message to thousands.

“Make sure someone within your company is monitoring social media channels. Even if you are not participating in the conversation, you'll find that your customers are,” she wrote.  She recommends that companies set up alerts to monitor any mention of the company online and report it to you instantly.  “The faster you know there is a problem, the better,” she said.

If you are involved in social media, get the person with the complaint off the airwaves as fast as possible.

Carlton offered several rules of thumb:

- Stop problems before they escalate -- teach employees basic customer service techniques.  Teach them how to recognize problems and empower them to solve them.

- Move quickly and decisively -- the longer the delay, the more frustrated people get (but conversely, act in haste, you'll live to regret it).

- Apologize and offer to help.

- If you don't know the answer, say you don’t know, but you'll find out and get back to the person.  Then do so. Do not leave them hanging.  If it takes longer than you anticipated to get an answer, let them know you are working on it.

If someone from the media is on the phone:

- Take the call -- do not hide behind voice mail, etc.  Get the facts, find out as much as you can about the problem.

- Don't feel like you have to have an answer immediately.  It's OK to say that you need to get answers, that you need to look into the problem. Do not feel that you have to answer every question.

- Do not use the words "No comment" -- it is a code phrase that tells people there is a problem.  Say things like, "I don't know but I'll find out," or "I am not the right person to answer that question" or "I can't answer that question right now."

- Never, ever go "off the record."  Everything you say can be used against you. “Even if the reporter is someone you know and trust, they could forget what is OK to say and what isn't," Carlton warns.

In the case cited above, Carlton identified several issues:

-The case was allowed to escalate.

-Midland refused to comment -- this tells everyone there is a problem.

-When a statement was finally issued, it came from a lawyer.  This sounds very defensive.

-Even when the company knew it was dealing with the media, they allowed the problem to fester.

-The final resolution made the company look even guiltier.

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