In a High-Profile, Crisis-Laden Business, Insurance CEOs Rely on Public Relations

By Gore, Robert J. | Public Relations Journal, May 1993 | Go to article overview

In a High-Profile, Crisis-Laden Business, Insurance CEOs Rely on Public Relations


Gore, Robert J., Public Relations Journal


Perhaps more than in any other industry, top executives in the insurance business are acutely aware of the need for public relations. Because crises and impending disasters are everyday fare, those charged with managing insurance companies tend, perhaps more than chief executives in other fields, to truly view public relations as a necessary strategic management and crisis anticipation tool. Insurance CEOs also appreciate the value-added nature of thoughtfully executed and thoroughly integrated public relations management.

This awareness of the value of public relations runs the gamut of insurers, from large, national firms that write virtually all types of insurance to small, niche firms that practice only in one state and only in one line. That's what a sampling of senior executives at members of the Association of California Insurance Companies (ACIC), based in Sacramento, reported in a recent informal survey. ACIC members represent companies operating in California, so the membership includes companies headquartered in many states outside California.

Property/casualty insurance, covering autos, residences and businesses, is perhaps the only major industry caught in an exquisite double paradox with its many publics. Consumers pay premiums for an intangible product that is evident only in times of catastrophe. Thus, insurance is a service resented because of cost and appreciated only in chaotic moments. Once the crisis ends, the appreciation quickly vanishes.

Insurance is a unique business, with financial return based entirely on future, hence unpredictable, circumstances. In contrast, most business enterprises manage largely known quantities in terms of risk factors.

The multiple disasters of 1992--the worst year on record for such events--stand in mute testimony to the perils of the insurance business.

Property/casualty insurers must communicate on an emotional and complex topic. They must effectively reach and inform many publics at once: potential customers, customers, shareholders, consumers, journalists, regulators and elected officials. As a result, public relations practitioners are involved in creating and maintaining the corporate business plans of most insurers.

For instance, senior executives at Government Employees Insurance Company (GEICO), based in Washington, DC, regard public relations as a key part of maintaining its public "franchise." At GEICO, public relations enjoys a company-wide role in both internal and external communications, according to Group Vice President August P. Alegi. "All of our audiences, internal and external, need to know the value of what we do and why we do it," Alegi said. "The value of our franchise would be significantly reduced if our audiences were not informed. …

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