There’s little worse for a travel insurer than getting bad publicity from a customer stuck abroad or a traveller with a tale of mistreatment or huge bills. How public relations (PR) firms advise clients on how to handle bad publicity is of huge importance, because, in many cases, companies are not prepared for managing crises.
“The insurance sector, in particular, faces specific challenges when it comes to crisis management,” said Katie Crowe, Global Head of PR and Communications at battleface. “These days, the pressure on stakeholders is forever increasing, with organisations being constantly judged by the way in which they manage the difficulties they experience and how they respond in real time.”
Myra Godfrey, author and PR expert, agreed: “Public relations and crisis management are crucial for the travel insurance industry. Planning and crafting the perfect message can, and will, still be interpreted in various ways by the receiver, leading to a prolonged crisis, so it is crucial to use every tool available – from marketing to social media influencers and best PR practices – to create an effective response.”
Insurance companies are no strangers to the impact of crises, said Richard Morgan Evans, Co-Founder and CEO of Sapience Communications: “In recent years, almost all major insurers will have dealt with a multitude of events that have had consequences on both business operations and customers. The implications of a global pandemic, a growing number of severe weather events, the rise of artificial intelligence fraud schemes, and a snowballing cost-of-living crisis have meant policies and regulations have had to be updated, insurance costs have risen, and maintaining the trust of customers has become a key focus.”
Godfrey went on to say that it is not a question of if something will happen, but when. “It might be a simple mistake that your audience forgets in a week, or something as serious as your audience wanting to ‘cancel’ you for good. Travel insurance players need to have a system in place, in line with their organisational policy and structure, to respond to crisis situations effectively.” A minor inconvenience for one party, she said, could be a complete catastrophe for another. Therefore, it is essential to control the narrative and message, rather than leaving it up to the perception of clients.
By establishing a positive reputation and brand image, insurers can differentiate themselves from their competitors and build trust with their clients
“Detrimental effects on a brand may include reputation damage (which can take years to rebuild), loss of customer trust, decreased sales, financial losses, and the need for extensive (and costly) crisis management and rebuilding efforts,” said Crowe.
Types of crises
A crisis could be a data leak or a faulty product, or some other unforeseen event that results in any form of media coverage. “Crises are typically newsworthy and the media love them,” said Crowe. “It’s important to remember that a crisis is a real ‘live’ issue – one that’s happening right here, right now. It’s anything that can damage your company’s reputation.”
“Insurance companies must be careful about how they react, and consider what the implications might be of making a hasty decision without thinking of the longer-term impact,” said Evans. “In October 2022, it was reported that the Financial Conduct Authority hit out at insurers, warning they faced a crackdown after finding ‘significant issues’ in the way many insurers handled Covid-era claims. One of the main areas of concern surrounded untailored communications to stakeholders.
“Another example of a rising area of concern for insurers is cyberattacks,” Evans added. “These are a common threat due to the abundance of confidential data that is held on company servers. Part of any crisis planning should involve integrated communications with technology teams to ensure accurate information can be shared with customers should there be a breach. Often, when formulating a crisis communications plan, businesses will realise that certain systems that should be in place to prevent a crisis are, in fact, not, e.g. cyber phishing training for all employees. So, there is value in the process,” he said.
Preparation is key
“Creating a risk register is a must-do for any business,” advised Evans. “And ensuring it is continuously updated is critical – this is so senior management and employees are up to date with current issues surrounding particular risks.
“When a crisis hits, it’s important to clearly ascertain whether it is an issue affecting the insurer’s customers (to which they can provide comment or share expertise) or whether it is a crisis directly affecting the insurance company itself. This may seem like common sense, but if any communications are received by customers or media alike that could cause confusion, it’s a slippery slope to further misunderstanding. So, it’s best to always be clear about who the issue sits with when communicating with stakeholders.”
Negative publicity can arise from various sources, including fraudulent claims, delayed payments, and disputes over policy coverage. “One common scenario is when a traveller makes a claim for an incident that is not covered by their travel insurance policy, resulting in the traveller footing the bill, which can lead to negative publicity for the insurer,” Crowe said. “Because you never know when one might happen, it’s best to always be ready and prepare for a crisis. To start with, it’s important to have a thorough understanding of how to effectively manage a crisis for insurers to be able to deal with any negative publicity. Having a crisis management plan in place is an absolute must.”
Having a step-by-step plan allows an organisation to follow a thought-out path of action. A plan will guide leaders through the dos and don’ts when an issue strikes
When developing a crisis communications plan, consider a myriad of potential scenarios. For example, not all crisis situations will result in an apology or an admission of guilt if accusations are unfounded, so how best should this be handled? “A good plan will not only give advice on how to handle such sensitivities, but it should also recommend that training and simulation exercises are undertaken by leadership teams to better prepare them with decision-making and response times,” said Evans. “Having a step-by-step plan allows an organisation to follow a thought-out path of action. A plan will guide leaders through the dos and don’ts when an issue strikes.”
Crowe added that companies should also be prepared to answer questions from the media and avoid making any statements that could be construed as an admission of liability. “A list of potential questions journalists may ask, along with answers, should be prepared in advance and shared with the media spokesperson ahead of any media briefings.” She said a crisis plan that spells out how to handle the crisis should include:
- Clear roles and responsibilities assigned to key team members
- A detailed communication strategy for both internal and external stakeholders
- Protocols for assessing and responding to the crisis promptly
- Strategies for minimising the impact on operations and ensuring business continuity
- Mechanisms for monitoring and addressing public sentiment and media/social media coverage and quickly taking the crisis ‘offline’
- Training to prepare the team for crisis scenarios
- Continual evaluation and updating of the plan based on lessons learned from past crises
- Legal and regulatory considerations to ensure compliance throughout the crisis management process.
When a crisis hits
“A clear and timely response can mitigate the damage caused by negative publicity and demonstrate the insurer’s commitment to resolving the issue,” said Crowe. “A statement should be issued to the media as soon as possible and provide clear and accurate information about the situation.”
Godfrey added: “Putting together a diverse team helps travel insurance players communicate effectively during a crisis. Pull in the staff members and leaders who can identify with the impacted group(s) and apply their knowledge, experience and passion for serving those communities to get the correct message across the first time. Creating a culturally and ethnically diverse team that spans different ages and genders helps empower everyone to address the crisis at hand as soon as possible.”
Insurance companies must be careful about how they react, and consider what the implications might be of making a hasty decision without thinking of the longer-term impact
This ensures that the correct message is communicated effectively to everyone involved, and can alleviate negative perceptions. “There are some people who are going to be upset no matter what, but most people will look at how you respond to a situation and use that as the gauge if they want to continue to do business with you or not,” said Godfrey.
Evans outlined the factors that insurers should consider in the face of a crisis:
- Aligning on key messaging at the outset is crucial, but know that you can update and adapt as necessary – it’s better to have said something than nothing
- Delays in communication can be misconstrued as a cover-up attempt, or a lack of preparedness
- Effective crisis communications do not end once a crisis has been resolved; it involves constantly learning from events and mistakes as they occur
- Consider the impact on business reputation and stakeholders equally. Don’t just do what’s right for the business – what’s the ethical thing to do given who and what is involved?
- Don’t speak to journalists off the record – it’s never really off the record
The later you bring in communication and legal teams, the more difficult it can be to gain control of a situation.
“People turn to social media platforms, such as YouTube and Instagram, to share their experiences in real time,” said Godfrey. “Travel insurance players need to put themselves in the consumer’s shoes using the tools and platforms their customers are using to communicate what is happening, and provide answers, even if they do not have all the answers. Most people just want to feel heard and seen. People will appreciate you proactively creating content for them to address a situation and answer questions as truthfully and transparently as possible.”
Today’s crisis communications need extremely diverse and tech-savvy individuals who can communicate effectively with different demographics
“Social media can be a double-edged sword,” added Crowe. “The huge rise in emerging technologies has given opportunity and access to opinions like never before. Negative comments and reviews can quickly damage an insurer’s reputation and lead to a crisis. Engaging with social media is one way to meet the needs of your customers and be where they are. However, a crisis situation can wipe out your reputation in seconds, and speed of response is key to protect reputation and value.”
Perception is reality
Preparing for a crisis is crucial in the travel industry, and having a good crisis management team who know their remit and how to implement it can pay for itself 10 times over the first time they are called upon. “Today’s crisis communications need extremely diverse and tech-savvy individuals who can communicate effectively with different demographics,” said Godfrey. “Travel insurance players need to leverage every tool available and keep customers happy and coming back.”
Crowe agreed: “Effective PR and communication extends to making insurance policies easy to understand and thus avoiding confusion about what’s covered and what’s not, resulting in less crises. By adopting a proactive approach to PR and crisis management, insurers can enhance their reputation and build trust with their customers.”
“If well prepared, a crisis communications plan will become an insurance company’s noble steed while weathering the storm,” concluded Evans. “It also allows an insurer to take responsibility for the issues, as well as acknowledge to customers later that there was a quick response time in the first instance. Although it’s good preparation to have a crisis communications plan ready, remember that a lot of the goodwill that may come – should a crisis plan need to be used – will be from having already maintained a steady pipeline of authentic communication with customers.”