1 page/≈275 words
Business & Marketing
BE Unit VII Assessment 2 of 2 (Essay Sample)
After the occurrence of Hurricane Katrina, insurance companies refused to pay claims to insurance holders who paid premiums on time and had binding legal contracts. What do you think the impact is to the “image management” that these insurance companies will have to deal with after all of the law suits? source..
Business and marketing: BE Unit Assessment 2 of 2
Hurricane Katrina was the strongest Atlantic hurricane storm which occurred in the year 2005 along the central Gulf Coast states of the US. It caused a great deal of damage estimated to be more than $100 billion. Thousand of people were displaced in cities such as New Orleans, Mobile, Gulfport, Alabama and Mississippi. It is estimated that 1800 people also lost their life`s.Most of the affected victims had insurance cover for their life`s and properties with various insurance companies in America (Bosworth 2005).
It is the expectation of every insurance holder to get compensation from the insurance company after such occurrences. By good faith and willingly the insurance company ought to pay claims promptly to its clients. After the Hurricane Katrina most of the insurance companies failed to honor the legal bonded contract of paying claims to insurance holder. As a profit making business most of these companies didn`t pay, delayed and denied payment of legitimate claims in bad faith. This was followed by clients moving to court to seek justice for their lost life`s and properties.
This law suits had negative impact to the â€˜image management` of these insurance companies. The reputation of the companies as shown by the IPSOS study was compromised (Bosworth 2005). In Bay St. Louis, hand written signs to rebuke against could be seen .Some of this signs read-"State Farms Mediation is a Hoax" and "state farm sucks" among others. Bob Erichsen, one of the insurance holder lamented that he had low opinion of the insurance companies at that moment.
As a result of image bleach to these companies, they lost many customers thereby potentially losing more profitability long-term as compared to what they attempted to recoup and maintain by refusing to pay out policies.
The refusal to pay claims to the insurance holders by the...
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