How the public currently views the insurance industry

After a sharp drop, people are starting to feel a bit more positive towards the insurance industry.

As the COVID-19 pandemic grew, the insurance industry’s image as a whole suffered. But, says a recent report, things are trending upwards once again, albeit slightly.

“Extremely negative” news coverage around the insurance industry — from travel insurance issues to business interruption to pandemic relief measures for personal auto — enveloped the industry in February, March and April, reported data and analytics company GlobalData. Since May, however, the company noted that there have been more positive stories, though the damage may have long-term effects.

GlobalData has a news sentiment index tracker to gauge what the feelings are of the industry. Before the pandemic, the score was 0.57 — a height not reached in at least the previous three years. It dropped to 0.42 at the end of the second quarter of the year and has now recovered to 0.44.

iStock.com/Fokusiert

“As we all know, the COVID-19 crisis is a challenging, frustrating and uncertain time for all Canadians,” said Insurance Bureau of Canada spokesperson Steve Kee, before highlighting efforts by property and casualty insurers in Canada to offer flexible solutions to assist those who’ve been affected by the pandemic.

“To help Canadians cope with the financial impact of COVID-19, IBC member companies offered substantial consumer relief measures,” Kee told Canadian Underwriter. “For consumers whose driving habits have changed significantly, IBC member companies offered reductions in auto insurance premiums to reflect this reduced risk. Insurers have also worked with small business and commercial clients to help businesses manage their costs.”

The insurance industry hasn’t always been popular, nor has it brought warm and fuzzy feelings to the masses, observed Ben Carey-Evans, insurance analyst at GlobalData.

Related: Canada’s P&C carriers respond to calls for major premium relief

“The insurance industry has always struggled with its image and consumer trust, and that fell to new depths in March and April 2020 because of the news that many insurers, especially in travel and business interruption, would not have to pay out once COVID-19 was declared a pandemic, which was incredibly damaging to consumer trust and will have lasting damage, despite the very slight upturn in sentiment.”

That “upturn” may be thanks to the re-opening of certain sectors to consumers, like travel. There has been some positive news internationally for those filing business interruption claims as a result of COVID-19.

“The upturn may also be the news cycle running its course and the damage to the industry caused by widespread stories about insurers not paying out could cause lasting damage,” Carey-Evans said.

Related: Hotels sue Aviva Canada for $150 million in proposed BI class action

In Canada, a number of business interruption claims could be headed to the courts as several class-action lawsuits look to be certified.

Hotels across Canada have filed a proposed $150-million class-action lawsuit through law firm Lerners LLP.  They claim that the hotels are entitled to coverage for loss of business income relating to COVID-19. The legal action applies to all hotels that are insured under a commercial insurance policy under Aviva’s Hotel Program.

Koskie Minsky announced on July 6 that it will be one of two firms (the other being Merchant Law) filing a class-action lawsuit against insurers. ““Business interruption insurance is designed for circumstances such as the current pandemic,” Kirk Baert, a partner with Koskie Minsky, says in the release announcing the action, though the release didn’t cite any particular policy language.

In April, Merchant Law filed a class-action lawsuit with the Court of Queen’s Bench of Saskatchewan, naming more than a dozen Canadian insurers. The representative plaintiff is JKT Holdings Ltd., which does business as Regina restaurant Memories, which had to shut its doors in March due to restrictions arising from the COVID-19 pandemic. In that proposed class action, the plaintiffs could include any Canadian with a business interruption claim resulting from COVID-19 against any of the defendant insurers.

Feature image by iStock.com/oatawa