Cyclone Larry Contact Name: Malvina Zayats Address: Level 14, 388 George Street, Sydney NSW 2000, Australia Tel: +61 (02) 9292 9403 Fax: +61 (02) 9292 9109 Email: Malvina.zayats@iag.com.au Category: Crisis Communications Submitted by: Carolyn McCann, Susan Hawkins, Megan Pearson Email: malvina.zayats@iag.com.au 1
Table of Contents Executive Summary 2 Situational Analysis 3 Goals and Objectives 4 Research 5 Target Publics 6 Communication Strategy 8 Implementation 9 Budget Appendix D Results 12 Evaluation 13 2
Insurance Australia Group s response to Cyclone Larry 1. Summary statement On 20 March, 2006, Cyclone Larry, a category 5 cyclone, hit Far North Queensland, devastating the town of Innisfail and surrounding communities. Operating two leading insurance brands in Queensland NRMA Insurance and CGU Insurance Australia Group (IAG) faced a deluge of home claims (6,000 in total) and was required to respond immediately. In a disaster environment hampered by damaged infrastructure and limited means of communication, NRMA Insurance and CGU had to communicate effectively with impacted customers to provide peace of mind and access to the right help fast. CGU had done minimal pro-active communication around major claims in the past and NRMA Insurance had been operating for just 11 years in the Queensland insurance market prior to the cyclone. In addition to these challenges: Claims resources were stretched to the limit and tradespeople were unable to cope with the demand. Underinsurance was widespread. Local banana crops were uninsured and sugarcane farmers crop insurance did not cover Cyclone Larry. As Australia s largest rural insurer, CGU was a likely target for any backlash. The insurance industry was put on notice early by media and government to act quickly with claims settlements. Cyclone Larry arrived on the back of a growing community perception that insurers were making increased profits at the expense of increased premiums and poorer service. In the immediate, frantic aftermath of Cyclone Larry and as public scrutiny grew in weeks following, these challenges created an exciting opportunity to tangibly demonstrate IAG s commitment to paying claims and helping people get on with their lives. 3
2. Goals and Objectives We identified one key communication goal to help set the course for protecting and enhancing our brands reputations throughout the first several weeks of our organisation s disaster response: Goal Demonstrate IAG and its brands commitment to paying claims and helping people get on with their lives. This goal was reached by pursuing the following objectives: Objectives 1. All affected customers are able to lodge claims and access information about support and assistance being offered by CGU and NRMA Insurance. 2. IAG and its brands are recognised by customers, the media and government stakeholders as setting the industry benchmark for other insurers to follow. 3. Customer and stakeholder expectations in relation to scope of insurance cover and claims response are effectively managed, so that potential reputation damage is minimised. 4
3. Research Prior preparation and planning was critical in ensuring the success of IAG s response to the crisis presented by Cyclone Larry. IAG had both a Major Claims Incident Plan and Crisis Communications Plan to form an operating framework in the immediate lead-up to and aftermath of the cyclone (see Appendix A for relevant excerpts). Additional research provided key insights into the situation analysis, helped shape communication strategies, assisted in the identification of key stakeholders and potential issues and was integral in evaluating success. Research included: Analysis of business exposure to ascertain impacted customer numbers. Analysis of past major disasters to identify communication needs / issues during key claims phases. Daily monitoring and analysis of claims lodgements, assessments, settlements. Analysis of underinsurance levels Identification of key stakeholders and the most effective tools to reach them. Monitoring and analysis of media coverage. 5
4. Target Publics We developed a range of tools to reach targeted stakeholders in the immediate aftermath of the cyclone and during the ensuing weeks. (See Appendix A ) Immediate Aftermath Audience Communications Tool Importance Customers Print/radio advertising Customers were our immediate priority. It was Help Vans crucial we identified the most urgent claims quickly. Customer hotlines Media Help Expo Daily media bulletins with key claims facts and figures - plus spokespeople on the ground - helped generate pick-up of our key messages in media coverage. Our people Government Internal email bulletins Visits by businesses leaders and our sponsored Broncos players to claims staff in Innisfail Disaster Response Team Internal email bulletins Video segment produced for internal audiences In person briefings Fax bulletins Under normal circumstances we would have communicated with customers directly, however we needed to find alternate ways to communicate as phone lines, mobiles and internet connections were all down. It was crucial to keep our 10,000 people abreast of our organisation s key role in this national headline event. Our assessing and claims staff were working 1000s of kilometres from home and 14-hour days. We needed to maintain their morale and support them to better help our customers. As there was an increase of media coverage nationally, we needed to continue to communicate our progress to staff so they understood the impact on the business. The State Government warned insurers not to delay claims payments. 6
Face to face Regular fax bulletins started in week 2 to key government stakeholders outlining our help for customers and to update on our progress. Community Help Expo The CGU & NRMA Insurance Help Expo event was open to all residents impacted by Larry to ensure the entire community could start taking steps towards recovery together and to demonstrate broadly the value of IAG s claims expertise. Shareholders ASX announcement IAG is committed to transparency. It was important for our reputation in the long term to signal to the market our expected claims costs. 7
5. Communication Strategy The IAG Corporate Affairs team outlined a proposed communications approach with IAG Queensland State Manager, Brisbane Assessing & Claims Manager, Queensland Marketing Manager the day before the cyclone hit. Key strategies adopted to achieve the campaign objectives included: Rapid pro-active response Aim to be first on the ground and pro-actively seek out customers and stakeholders. Early lodgement and settlement of claims play a key role in providing customer assurance and managing business costs. Differentiating the approach Highlight aspects of IAG s response that set it apart from other insurers. Using alternative communication channels Connect with customers who had lost access to phone, mail and internet channels. The faster we established contact with customers, the quicker we could deliver the right help and immunise the brand from potential criticism arising from any delays. Demonstrating progress through tangible action Use the media to demonstrate progress and mark key milestones. Helping beyond the claim payment Demonstrate CGU and NRMA Insurance did more than just pay claims by providing emergency assistance and rebuilding support. 8
6. Implementation The IAG Crisis Communication Plan provided the key framework for communicating in the wake of Cyclone Larry in the immediate aftermath. The plan outlines: the roles and responsibilities of the Crisis Communication Team; the framework for the crisis communication response, including prompts for decision making and supporting activities; draft communication tools and supporting information, which may be required in the event of a crisis incident; and contact directory for those people/organisations, which may need to be advised in the event of a crisis incident. While the Crisis Communication Plan acted as a proven guide to rapid response communications, each crisis has its own unique communication challenges, risks and variables. Cyclone Larry required an integrated communications campaign with rapid and consistent messaging across a range of stakeholders. Before the cyclone hit Prior planning would prove key to a successful communications campaign in the wake of Cyclone Larry where rapid decisions and communications would be crucial. As the cyclone developed we: Secured agreement from key internal stakeholders to activate Crisis Communication Plan Identified key audiences: customers, media, Government stakeholders, IAG claims and support people, suppliers and general community. Drafted key messages Identified communication channels to reach worst-affected customers Developed draft communication tools Identified a Disaster Response Team Disaster Response Team With communication flow critical in any crisis, we established a cross-functional Disaster Response Team involving key internal stakeholders. This group met every two hours throughout Day 1 (day cyclone hit), and twice daily for the next fortnight. This team captured information from the frontline operations so decisions could be made nimbly around ways we could help customers and key messaging. Cyclone Larry Response Bulletins Each day of the crisis particularly throughout the first week saw new developments in how we were helping customers. To position ourselves as the industry leader in responding to this disaster, we developed daily media bulletins under the CGU and NRMA Insurance brands that clearly outlined 24/7 hotline details, claims figures, claims progress and what we were doing to help customers. The bulletins were issued every day for the first week. Rapid Response Advertising (See Appendix A) With many mainstream communications (eg phone, internet) down, we chose radio and print advertising as a key channel to establish customer contact. Existing major claims 9
incidents ads were tailored for our Cyclone Larry Response, with the initial advertisements (i.e. those which appeared in first five days) focusing on the customer hotline and the claims lodgement process. Once the first Help Van was set up, we placed ads with its location details. Frontline spokesperson As the first insurer visible on the ground in Innisfail we knew we were likely to attract media attention. To ensure our customer-facing staff in the disaster zone were not distracted by media inquiries, we identified on Day 1 a Customer Service Manager to double as a media spokesperson on the ground for the first two weeks. The frontline spokesperson was also available to identify positive customer case studies for media. Catastrophe Help Vans IAG deployed two co-branded catastrophe caravans to establish customer contact centres to process claims and provide emergency help. The first Help Van was set up by 8am on Day 4 to: identify customers with claims and process lodgements distribute Coles Myer food vouchers for basic needs facilitate EFT transfers of $5,000 claims advances provide customers access to satellite phones issue tarpaulins provide referrals for trauma counselling. A second Help Van was deployed to roam outlying areas Atherton, Babinda and Mission Beach. MP Updates By week two, government and media had begun scrutinising individual treatment of customers by some insurers. While some sidewalk briefings were held between IAG s State Manager and key local figures in Innisfail such as Federal MP Bob Katter, it was vital IAG provided a snapshot of its rapid response early to relevant political stakeholders. We distributed weekly fax bulletins for first three weeks and then as needed to a target list of MPs, and invited them to raise concerns or issues. Face-to-face stakeholder engagement Briefings were held with: Federal Member for Kennedy Bob Katter Cyclone Larry Recovery Task Force Head General Peter Cosgrove Innisfail Mayor Neil Clarke Queensland Emergency Services Minister Pat Purcell State Member for Tablelands Rosa Lee Long CGU & NRMA Insurance Help Expo: Beyond the claim As the emergency response abated, it was clear many customers and indeed the whole community had questions about the next steps in the recovery process. Our communication response culminated in funding and co-ordinating a free community Help Expo two months after the cyclone to help equip our customers and the wider community with the right advice on rebuilding their homes and lives, once claims payments were made. The Help Expo provided information on issues such as rebuilding, planning, demolition, legals, taxation, financial planning and trauma counselling. 10
The Expo was publicised through: media print and radio advertising customer invitations posters flyers signage at venue. 7. Budget See Appendix C 11
8. Results Cut-through in media coverage (See Appendix A) IAG, CGU and NRMA Insurance attracted a large amount of favourable media coverage in the aftermath, with 75% of all print articles containing positive messages, including: IAG is a responsive and forthcoming insurer; NRMA is providing emergency assistance, while also handling claims efficiently; CGU is sending support teams to affected areas. Customer contact Prior planning and rapid response ensured NRMA Insurance was the first insurer to advertise its claims hotline in The Courier Mail on March 20. We had than 100 visits to the Innisfail Help Van during its first day and more than 1500 visits by customers seeking claims assistance and practical help in the days and weeks following cyclone Larry. Government recognition NRMA Insurance and CGU were recognised in State and Federal Parliament and by Government stakeholders in media for setting industry benchmarks with their Cyclone Larry response. (See Hansard and media coverage in Appendix A) Help Expo More than 700 residents impacted by Cyclone Larry attended the CGU & NRMA Insurance Help Expo on March 20 at the Innisfail PCYC, which was opened officially by Cyclone Larry Task Force Head General Peter Cosgrove and Innisfail Mayor Cr Neil Clarke. 12
9. Evaluation The success of IAG s Cyclone Larry response was based on an evaluation of the campaign outcomes against the original goal and objectives. They included: Objective Outcomes All affected customers are able to lodge claims and access information about support and assistance being offered by CGU and NRMA Insurance. IAG was the first insurer on the ground in Innisfail. Within 72 hours of the Cyclone, we had: Made emergency accommodation available in Cairns. Paid over $3.2 million in total losses and emergency claims advances of up to $5,000 Provided more than $7,000 in Coles Myer vouchers. By the end of Day One, we had identified and assessed 90% of customers with critical claims, and paid more than 50 per cent of building/contents total losses. More than 1,500 people visited the Help Vans to lodge claims get help. More than 700 residents attended the CGU & NRMA Insurance Help Expo. IAG and its brands are recognised by customers, the media and government stakeholders as setting the industry benchmark for other insurers to follow Customers 92% of Help Expo attendees rated it valuable or extremely valuable. Media Despite having one third of the total claims, independent media analysis found IAG and its brands generated 69% share of voice among insurers. 82% of branded coverage featured our key messages. CGU 28% NRMA 32% IAG 25% Suncorp Metway 15% June 2006, Cubit Media Analysis Report, Share of Voice Government Queensland Government publicly endorsed the Help Expo and Recover Taskforce Leader General Cosgrove spoke at the event. Highprofile Federal MP Bob Katter recognised our rapid response in Parliament and media interviews. 13
Customers and stakeholder expectations in relation to scope of insurance cover and claims response are effectively managed, so that potential reputation damage is minimised. Independent media analysis found 99% of branded coverage was net positive (32% demonstrably positive / 77% neutral). Only 1% of coverage has been negative. Media coverage about crop losses contained CGU s key messages and was neutral or positive. 14