According to McKinsey's Global Insurance Report 2025, "the world's insurers are enduring a particularly volatile age."
The insurance industry is at a crossroads in terms of public perception. Recent tragic events highlight this reality, from the cancellation of policies just prior to the LA fires and the subsequent request by carriers for rate increases to the dire situation in Florida, where carriers are leaving the state en masse as property insurance costs spiked 72% in the last five years.
While some insurers have made strides in terms of their communication with policyholders, far too many are lagging behind, waiting to see what the others will do. This leaves a void that the public is filling with stories of abandonment, greed, profit over people, and a host of other negative descriptors.
What the insurance industry needs now, more than ever, is to realize that things must change. Immediately.
Given the current chaos, insurers should be a trusted beacon that promises to be there in insureds' darkest hour. That starts with greater transparency and increased communication with constituents.
I remember the days when meeting with your insurance agent was the norm, When disaster struck, they were just a phone call away. Too often today, a question or complaint results in an automated response that doesn't even acknowledge what the person receiving the communication is going through.
For all of the benefits and convenience that technology has provided—from easy access to information online to streamlined claims and AI chatbots—it has also weakened the personal connection between insurers and their insureds. While we can't return to those days, there are ways for insurers to be more transparent, make those critical connections and rebuild trust.
One approach is to hold regular opportunities for insureds to ask questions, discuss concerns, and even air grievances before they boil over and create a pervasive sense of mistrust. Right now, many consumers feel there is no path to having a substantive dialogue with what should be a trusted adviser. While such events must be well-managed, it is critical that they be done live and with real people.
Insurers also need to act as a true partner and resource, beyond just processing claims. This means sharing with policyholders where they can turn to for immediate assistance and providing regular status updates, so they are informed and know what is actually being done.
It is also more important than ever for insurance leaders to be highly visible on the frontlines with information on how they are responding to consumer crises as well as addressing the very real challenges the industry is facing. If mistakes were made, address them. By the same token, when there is misinformation about what insurers are doing, correct them. While consumers are unlikely to feel sympathy for the industry, they should understand the financial straits that have insurers at the risk of failure.
Recent months have tested the resilience of this sector like no other in recent memory. But I believe in the future of the insurance industry and its ability to grow and improve despite these unpredictable times. By offering greater transparency and delivering communications that fulfill promises to insureds, I believe the insurance industry can once again reclaim their position as a trusted partner.
