Maintaining stakeholder trust in difficult times: Some fundamental reflections in light of the credit crisis

Abstract

Against the backdrop of the credit crisis, the paper looks into the crucial role of trust and reputation in the insurance industry. We also offer some specific recommendations for management to consider in order to preserve these indispensable intangible assets in times of evaporating confidence, freezing credit markets and contracting economies. Admittedly, compared with banks, insurers are less vulnerable to a life-threatening, sudden withdrawal of trust as policyholders pay premiums upfront and, generally, exercise no direct influence on the level of claims. However, from a longer-term perspective, maintaining trust in the industry in general and in their respective company in particular can be viewed as the most fundamental objective an insurer's management has to meet.© 2009 The International Association for the Study of Insurance Economics.