Insurance Companies – Heels or Heroes?

Insurance Journal
Tuesday, January 25, 2022

The insurance industry is far from the economy’s most-admired sector. A Forbes survey found insurance ranking low in popularity in the public eye. Three main reasons are responsible for insurers’ relatively poor rating. First is the intangible nature of the insurance product. Unlike a car one can drive home from the dealership, or a chocolate bar whose taste can be savored, purchase of an insurance policy does not lead to immediate physical gratification. To be sure, if there is no loss, one may never get a flavor of its value. Second, insurance is associated with life’s tragedies, its most physically, emotionally and financially distressing experiences—a home damaged by a storm, a car totaled, being sued, a death or dread disease, or a crippling workplace accident. Insurance payments can take away the sting with financial recovery, but loss remains painful, especially if one discovers the loss is not 100 percent covered. And third, the insurance industry has become an easy target for critics who regularly vilify it.

The insurance industry’s reputation is regularly assaulted by “watchdog” organizations spawned by the “Nader’s Raiders” movement. Groups including the Consumer Federation of America, the Center for Justice & Democracy, the American Association for Justice and other self-styled consumer crusaders regularly accuse the insurance industry of being greedycollusive, cash-rich and defrauding. In the wake of hurricane Ida even President Joe Biden hopped on the anti-insurance bandwagon, calling on insurance companies to “do your job.”

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