How effective communication can help in a crisis

by Mimi Kalinda. Recent economic climates across Africa have resulted in many industries feeling the burn, and the onset of the COVID-19 crisis has increased this exponentially. Insurance companies in particular, face a range of challenges within the current consumer market, largely due to insurance being a “grudge” purchase for many. And even for those who recognise the importance of insurance, it is often one of the first services to go for consumers when they experience financial strain.

That’s why insurers themselves need to take steps to understand consumer’s perceptions about their brand and the services they offer as a means to overcoming industry challenges – some of which have been around for a long time – and strive to change negative views. Communication and public relations (PR) activities play a pivotal role when it comes to how a brand or service is perceived by consumers. Insurance companies are no different. Below are some of the key challenges facing the insurance industry, and how strategic brand communications activities can help move the needle forward when it comes to public sentiment and business goals:

1. Challenge: Sensitive nature of the industry

It’s not surprising that the consumer market that insurers operate within is a sensitive one. After all, it’s built around two factors that are a very personal to most people, namely, their financial and health security. How does this affect insurance companies? Well, it means that a client-related insurance issue can very quickly and easily escalate into a crisis – whether it relates to a group of consumers or even just a single customer (recent social media crises experienced by insurance brands in South Africa bear testimony to this). And due again to the very personal and crucial services insurers provided, any type of crisis is likely to have a tangible impact on their bottom line as negative publicity results in clients losing trust in a brand and consequently terminating contracts.

Communication approach: It’s all about prevention. Insurers need to have crisis management plans in place to avoid the occurrence of a crisis. This is done by having expert crisis management teams work with insurance specialists to help identify possible crisis situations and develop strategies to avoid or prevent them. As it is not possible to predict every potential crisis, this also means having damage control plans in place to manage a crisis should it occur, as well as having a communication framework prepared for handling a post-crisis environment. This applies to both internal and external communication processes.

2. Challenge: Highly competitive market

Regardless of the type of insurance services offered (asset, health, life or a combination of different types), insurers operate within a highly competitive market. This is because services provided by the vast range of companies are very similar, leaving consumers spoilt for choice when it comes to selecting a service provider when the need arises, or changing to an alternate one if already insured.

Communication approach: Insurance companies need to find strategic and creative ways to differentiate themselves from competitors. This means investing in communication and messaging activities and finding ways to position themselves as a value-adding brand. One of the best ways to achieve this is through a multi-faceted approach that includes integrated traditional, digital and social media campaigns, coupled with strong PR sentiment-focused activities – all in alignment with brand objectives. The actual (custom) content and positioning that is used as part of such campaigns is key to differentiating a brand and driving the success of communication activities and overall business goals.

3. Challenge: Negative consumer sentiment

Let’s face it, the insurance industry does often get a bad rap and is negatively viewed by much of the consumer market. This is linked to perceptions that insurers will look for any loophole or technicality to get out of paying claims. And, historically, insurers themselves have perpetuated this view by doing just that. Adding to the fact that insurance premiums are a “grudge payment” for most people, especially those on a tight budget, it’s easy to see why it’s hard for insurance companies to drive positive brand perceptions and win the trust of consumers.

Communication approach: A reputation management strategy should be drawn up as an action plan to positively shift perceptions and gain reputation equity within core markets. Elements such as building the thought leadership portfolios of the organisation and key brand personalities (such as the CEO or executives of a company). Value-rich op-eds, speaking engagements and showcasing social impact, for example, should form part of PR and reputation management plans for companies. Effective distribution channels and media networks are also important to ensure that these messages get out there and are received by relevant target audiences of the company.

4. Challenge: Communication model does not cater to consumer needs

The consumer landscape has changed – current consumers demand transparency, access and personalised service from suppliers. Insurance companies often fall short of meeting these demands – sometimes due to not actually knowing what consumer needs and priorities are. What worked before simply does not work effectively now. And in a customer-experience driven consumer environment, this will prove to be detrimental for business longevity and growth goals. Insurance companies spend a lot of money on customer service-related resources, however, much of it is inefficient use of spend because it is not in line with what clients actually want.

Communication approach: The starting point is to set up a perception audit to gauge brand sentiment with different target groups and demographics. Stakeholder mapping can also be done to get a clearer idea of what the priorities are for different stakeholders with a vested interest in the company. Such market and industry research will provide the insight needed for informed decision-making when it comes to brand activities and help customise and localise brand messaging. In current work with a leading insurance brand, we have found that consumer needs and priorities differ vastly within each of the various countries the brand operates in across Africa. For example, in Ghana, trust in a brand was found to be a key determinate in decision-making, while in Mozambique, the focus is on social transformation, and the impact a brand makes in terms of helping achieve SDG goals. These insights help in developing the type of communication that will land with specific audiences, as well as inform activities related to marketing, public relations and social responsibility. However, it doesn’t end there – such data also plays a valuable role business decision-making, such as product development and deciding on which markets or focal points to invest more resources into.

For insurance companies (or any business, for that matter), PR and communication activities should not be viewed in isolation to other business functions. They should form an integral part of result-driven business strategies. Companies simply cannot afford to overlook or underestimate the role that communication plays when it comes to boosting business results and market share. This relates to both internal and external stakeholder engagement and support. And given the competitive nature of the industry, insurers should view PR as a valuable tool that can help leverage their brand within the market.

Mimi Kalinda, originally from the Democratic Republic of the Congo and Rwanda and raised in South Africa, is the Group CEO and Co-founder of Africa Communications Media Group, a pan African public relations and communications agency based in Johannesburg, South Africa.

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