shutterstock 711285253 - Write Is Might: Policies, Premiums And Plain English

Insurance is an essential and very important financial services product.

Whether we’re protecting our loved ones, our homes or our businesses, we all need cover to manage the risks to which we’re exposed on a regular basis.

Given the complex nature of some of those risks, it’s perhaps understandable that policies can be rather detailed, with a considerable amount of small print.

It’s also to be expected that individuals who don’t work in the insurance industry find the terminology a little hard to comprehend.

That is something made clear by a report entitled ‘The Future of Insurance’ published recently by a national law firm.

If we simply consider the top lines of the study – based on the views of 2,000 consumers and representatives of more than 400 businesses – it reads rather favourably.

More than 90 per cent of consumers and businesses who participated in the research pronounced themselves satisfied with the service which they receive from their insurers.

Significant problems which many companies experienced when trying to make business interruption claims as a result of the negative economic effects of lockdown ultimately resulted, of course, in a Supreme Court ruling reverse for insurers.

Nevertheless, this latest survey suggests that the generally positive perception of the insurance industry was, actually reinforced during the pandemic.

Read a little further and the praise is qualified a little, though.

Two-thirds of those consumers and businesses who took part expressed the opinion that “choosing or buying an insurance policy is always a difficult process”.

Furthermore, both groups concurred that there was a need for “clearer policy documents”.

Whether the research is an accurate reflection of what everyone else in the market for insurance thinks is difficult – if not impossible – to know.

Even so, it is useful in reminding brokers and insurers of the imperative to be clear about what insurance entails.

It’s more than a professional nicety.

The Handbook of Rules and Guidance issued by the Financial Conduct Authorty (FCA) underlines how insurers have an obligation to provide prospective policyholders with material which is “clear, fair and not misleading“.

I don’t believe that the responsibility rests solely on the shoulders on those who offer the cover.

Regardless of the specific audiences with which brokers engage, we have a duty to educate customers rather than just handle the annual renewal of policies.

We need to be willing and able to explain the importance of addressing risk. The language which we use is as much of a consideration as the assets being insured and how much the premiums will cost.

In that sense, we must arguably do our best to ensure that policies are written in terms which those who take them out can easily understand.

Many of the UK’s leading insurers have already secured endorsement from the Plain English campaign for their efforts in that regard but, just as the language which we use in everyday life continues to evolve, so too must policy wording.

Equally, the means by which we communicate needs to be taken into account. Some consumers and businesses now favour digital engagement, while others prefer face-to-face discussions.

Whatever the method, we must show ourselves flexible as well as capable of developing and then retaining the trust of consumers and businesses who turn to us for guidance.

That prospect, I feel, is going to be far more likely if we can be clear and objective about insurance products, their respective merits and component parts.

Daniel Lloyd John0004 - Write Is Might: Policies, Premiums And Plain English


Written by Geraint Jones, Senior Private Clients Executive, Broadway Insurance Brokers