This occurs as a result of when the Internet Explorer Security setting "Do not save encrypted pages to disk" option is enabled.
To fix this, please do the following:
1. Exit Outlook
2. Open Internet Explorer and go to Internet Options via the settings icon on the top right
3. Under "security", disable the "Do not save encrypted pages to disk" option and select OK.
4. Start Outlook
*If you are unable to disable this option, please contact your system administrator.
If this still does not start to display the image correctly, then you will need to check the following:
1. Open Outlook and click "file".
2. Options > Trust Center > Trust Center Settings > Automatic download.
3. Uncheck the "Don't download pictures automatically in standard HTML email messages or RSS items" option