Crisis communications expert unveils how to cut the cost of claims

Crisis communications expert unveils how to cut the cost of claims | Insurance Business Australia

Insurance News

Crisis communications expert unveils how to cut the cost of claims

Tips to minimise reputational damage also outlined

Insurance News

By
Roxanne Libatique

Lahra Carey (pictured), principal at crisis communications manager narrative, has unveiled how to lower the value of insurance claims.

A strategic communications expert, Carey said organisations usually turn to their insurer to recommend a crisis communications expert. Meanwhile, those without a relationship are left to seek an expert on their own, leading to mistakes and more significant insurance claims and payouts.

“A communications crisis threatens the organisation’s reputation and may impact the company’s share price, operations, or sales – and often the career or reputation of individuals. These are the issues that make up insurance claims,” Carey said. “Whether a crisis is caused by intentional and knowingly bad behaviour – like fraud, dishonesty, physical, or sexual abuse – or unintentional human error, or an accident which cannot be foreseen or prevented, time is your enemy.”

Graeme Samuel AC, governance expert and former chair of the Australian Competition and Consumer Commission (ACCC) and now a professor in the Monash Business School, added: “Boards don’t often include communications experts. And so, when a crisis occurs, directors rarely understand what’s required. This dilemma is exacerbated when the crisis has been caused by senior management actions, leading to the board having to assume prime responsibility for dealing with it.”

How to minimise reputational damage

Carey said best-practice communications during a crisis could minimise reputational damage and cut the cost of claims.

“When a crisis hits, you need to be prepared, calm, and understand how the media process is likely to roll out. It can be confronting and quite frightening for those who’ve not experienced a crisis before. So, it makes sense to have experts on hand to step in and advise the organisation to mitigate risks and potential reputational damage,” she said.

According to Carey, an effective crisis planning includes:

a pre-approved crisis plan already in place
rehearsing a potential crisis
agreed communication templates to save time when a crisis hits
a database of stakeholders who must be informed as soon as a crisis hits
a spokesperson

Samuel said insurance generally covers the cost of communications advice – money well spent if the advisors are seasoned crisis management experts.

“From an insurance perspective, getting it right means the risk of large payouts to cover key messaging mistakes, strategic failures, and reputational damage is limited – potentially leading to fewer and less costly payouts,” he said. “Insurance companies could be lowering the value of claims by developing relationships with savvy communications experts who they can refer to their clients facing a crisis.”