Dishing Up the Crisis:  A Word from the Newsroom

by Guy Robertson

Listen up, people.  This is a TV newsroom and we have a national audience that wants sexy new business stories.  We´ve covered the banks for years, and everybody´s tired of hearing about the bull market.  For something fresh and interesting, I want our reporters to hit the insurance industry.  That´s right: the suits on University Avenue, the small-town brokers and adjusters, the underwriters, the claims management guys and the marine specialists on both coasts.  Somewhere in that sector there are hot stories waiting for our camera crews. 

Ideally you´ll dig up a nice juicy crisis.  Not just another disaster photo-op although flood footage is always pretty.  Disasters happen all over the world, every day.  Often we don´t have enough time or space to describe every earthquake, fire, explosion, toxic spill and tornado.  In fact, these disasters are not worth reporting unless they damage property.  Who cares about high winds unless they knock down something important?

Remember the main difference between a disaster and a crisis.  A disaster is a serious and sometimes dangerous event that causes physical damage.  For example, a flood in a computer centre that wipes out a large amount of data.  Or a major earthquake on the West Coast that levels parts of Vancouver and Victoria and results in hundreds of casualties.  A crisis occurs when the reputation of an organization is threatened or actually harmed by bad press, which leads to diving stocks and disappearing market share.  Nasty stories in the newspaper can make customers lose confidence in a company.  Those stories can be accurate or inaccurate.  It doesn´t matter.  People tend to believe what they see in print, and they´ll trust any well-coiffed TV talking head who sounds convincing.  A rumour on the street can lead to a crisis just as easily as an earthquake or an ice storm.  Which brings us back to the insurers. 

Every time there´s a regional disaster involving serious property damage at a large number of sites, insurers are inundated with claims.  They´re obliged to work at full speed and top efficiency, often in harsh conditions.  And we´re watching them.  Our reporters are on the scene faster than anyone else, and they´re interested in any negative angle to the story, any hint that the insurers are having difficulty settling claims. 

Sometimes we media people make mistakes.  We admit it, though not publicly.  Very few media people understand the insurance business, and occasionally we broadcast or publish something about it that is inaccurate.  A false report can cause a lot of grief.  Consider the casualty counts that appear on the front pages of newspapers shortly after a large disaster: invariably they´re wrong.  And the property loss figures are usually way off, because nobody can come up with a correct damage estimate in such a short time.  But the media need to give their audience some idea of losses arising from an event, so we´ll publish any dollar figure that an adjuster on the scene mutters under his breath.  Which can lead to a crisis in the insurance sector. 

What a lot of insurers don´t realize is that many crises can be avoided through effective management.  There are proven methods to handle the media and to make sure that the best available information is broadcast.  But there are also ways to deepen a crisis.  We all know about politicians and business leaders who give us �grave;No comment�acute;.  They might as well confess that they´re guilty of every crime in the book when they try to shut us down like that.  It almost never works.  Nor do the attempts to change the subject or to suggest that the whole thing has been blown out of proportion.  When we hear that, we smell blood. 

Smart companies develop crisis management plans.  First, they determine the kinds of crisis that can hit them.  Scandals, white-collar crime, mergers, firings, false accusations, downsizing, and bankruptcy can lead to a crisis for any insurer.  It´s no use pretending that a crisis can´t happen because a company will be protected by its size, or because a well-managed company doesn´t experience crises.  That´s dangerous thinking.  Managers who believe it are putting their companies at risk.  It´s best to acknowledge the possibility of a crisis happening at some point in the future , and working out the most intelligent ways to face it. 

Some companies are constantly on the alert for any hint of a crisis.  They aim to resolve it before it causes trouble.  At the first sign of a crisis, their senior managers will meet to discuss it and find ways to contain it.  If it can´t be contained, management and communications staff will develop a strategy to survive the crisis.  Much depends on the skills of the corporate spokesperson, who gives interviews and answers reporters´ questions. 

A spokesperson can be the CEO, a VP, or an experienced communications specialist.  Despite all the flack a spokesperson must take, there is one general rule that he or she must obey: always tell the truth.  It´s better to say �grave;I don´t know�acute; than to dish up self-serving bafflegab that won´t fool even a cub reporter.  And it´s never wise to avoid the media.  It doesn´t work.  If a spokesperson hides, reporters can always find somebody else to comment on the situation.  Which means that a company loses the opportunity to control their message and keep the record straight from the beginning. 

Every reporter respects companies that make an honest effort to communicate during difficult times.  When a spokesperson meets the media regularly and provides honest information, a crisis won´t be prolonged.  Reporters like consistency.  Everyone remembers the Quebec Ice Storm, during which some insurers had difficulty communicating a clear, consistent message regarding claim settlements and other issues.  Adjusters were disgruntled, and confusion prevailed for weeks after the ice melted.  That confusion could have been avoided if insurers had coordinated their communications with their main stakeholders, including adjusters and the public. 

Long-winded press releases won´t make anybody´s job easier.  Some companies don´t issue releases to the media longer than three brief paragraphs, on a single sheet of paper.  Reporters are suspicious of complicated charts and graphs, compilations of statistics that appear magically just after all hell has broken loose, and like releases that sound like advertising.  The best communication with the media is clear, concise, and jargon-free.  And TV news would be a lot duller if more companies tried to keep their messages simple. 

But some companies never learn, even from a crisis such as that which struck during and after the Quebec Ice Storm.  They may be adept at analyzing their clients´ risks, but when it comes to recognizing a potential crisis for their own operations, they need improvement.  They react to reporters´ questions without full knowledge of the situation They speak off the record, directly into reporters´ tape recorders.  They hide behind jargon.  Even when they tell the truth, they succeed in confusing everybody.  Sometimes these companies will deal with the media through several spokespersons, all of whom use different statistics, offer different explanations, and send out contradictory messages.  They fumble with the microphone and look nervous and sweat visibly while our cameras roll. 

And that´s why we love them.  I want the richest dirt you can find on those well-dressed insurance people.  With a bit of luck, this winter the weather could turn ugly, and provide us with a disaster.  Perhaps the insurers can give us their own home-grown crisis. 

Beautiful stuff!

By:  Guy Robertson, Vancouver, Canada
e-mail guy_robertson@telus.net
This article originally submitted to "Canadian Insurance" [END]

[Sidebar:]

Dealing with Dirt:  Facing a Crisis

IBC Vice-President Lindsay Olson exemplifies the qualities that a spokesperson needs during a crisis.  When a heavy rainstorm caused a sewer system backup in the Vancouver suburb of White Rock, Olson was on the scene to provide accurate information on claims. 

"There was a lot of misinformation about what was covered and what wasn't," she says. "  The media spread the story that acts of God weren't covered in policies.  I don't know where they got that strange idea, but it precipitated a crisis.  By the time that I arrived in White Rock, emotions were running high, and people were angry. " 

Along with other insurance representatives and officials from B.  C.  's Provincial Emergency Program (PEP), Olson attended a town hall meeting during which she corrected false reports and reassured the public that assistance was forthcoming. 

"You can't blame people for being upset.  Their basements were filled with dirt and sewage, and many believed that they had no coverage.  It was a great story for the media, but the reporters should have checked their facts. " 

Olson believes that insurers should be aware of how quickly a crisis can erupt, and how long it can take to resolve once misinformation prevails. 

"The media want to know how much a disaster is going to cost," she says.  " The fact is, we don't know in the beginning.  So we must resist the temptation to quantify losses shortly after they've occurred.  It can take months to arrive at a decent loss estimate, so it's unwise to jump to conclusions in front of the cameras."

Determined to increas public knowledge of the insurance industry, Olson's Vancouver office distributes over 30,000 brochures a year as part of the IBC consumer awareness program.  Olson is optimistic about the program's effectiveness. 

"We have a lot of work ahead of us, but I think we're spreading the right message before the wrong information can get around.  That's the best way to handle a crisis: before it happens.  "

[END]

[Bio:]  Guy Robertson is Senior Planner at SafetySmart Emergency Management Inc. in Vancouver, Canada.  Their clients include libraries, archives, information centres, banks, and retail businesses.

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