Could a group of 11-13-year-olds hold the key to clearer policy wording? CovÃ©a Insurance set out to find the answer, as Luke Holloway reports-¦
When it comes to insurance policy wording, the battle between clear, understandable language and necessary technical information is an ongoing one. Of course, insurance companies need to outline full and comprehensive details within a policy's terms and conditions, but will the average person reading them be clear on what they are covered for? Or perhaps more importantly, what they are not covered for.
To help lead the fight against unfathomable policy jargon, CovÃ©a Insurance organised a focus group which aimed to gauge how clear and understandable the policy wordings are for two of the products they have on offer.
Around 5.2 million adults in England (16%) could be described as what is known as 'functionally illiterate', meaning they would have literacy levels at or below those expected of an 11-year-old. In these cases, understanding short texts on familiar topics would be fine but reading information from unfamiliar sources, or on unfamiliar subjects, could cause problems. These statistics were central to CovÃ©a's idea, so the focus group they selected were all individuals aged 11-13 years.
Carol Geldard, personal lines director at CovÃ©a Insurance, says: "While there have been many attempts to improve the clarity and legibility of insurance documents, if you look at the cause of the majority of complaints, not just at CovÃ©a Insurance but across the industry, they come down to misunderstandings about cover.
"Running these groups with children allowed us to view our products through the lens of those without any prior knowledge or understanding of insurance, giving us an untarnished and honest response to the way we present information."
To identify which commonly used insurance terms were best understood by the group, and to identify key improvements that could be made to policy documentation, the children were given a selection of common insurance terms and asked to discuss what they thought they might mean.
Misunderstood terms included 'market value' -- which was interpreted to mean the value of the market or the insurance company. 'Excess' also caused some confusion, especially when explained alongside 'premium' -- both terms refer to amounts of money but neither words reflect the children's reallife definitions for them; premium meaning posh or upgraded and excess meaning extra.
Policy wordings have traditionally been very text heavy and the children were found to grasp terms more easily when they featured some associated imagery, for example, they were not sure about the difference between 'contents', 'buildings' and 'personal possessions' until the CovÃ©a Insurance team explained the concept of turning a house upside down and shaking it for the contents to fall out. This provided the children with a mental image they could picture and helped the meaning behind the words to click.
Meet the fall guy
One key method CovÃ©a Insurance used in an attempt to connect with the children was the introduction of Ian Shore -- spot the pun -- an unfortunate fictional character who suffers a series of unlucky mishaps. The group was then asked to read the relevant section of the policy wording to assess whether or not Mr Shore would be covered if making a claim. For the majority of scenarios, the group were able to correctly identify whether or not Mr Shore's claim would be valid, responding best when information included bullet points, tables and information that could be read at a glance, in an easy to digest format.
As an additional exercise, the children were asked to highlight any words or phrases they did not understand while reading through the sections of policy wording. This task flagged a number of terms, not necessarily specific to insurance, that were potentially problematic.
Terms that could be argued as taken for granted within the profession and though not necessary considered jargon, were technical enough for the children selected not to have come across them in their everyday lives. Some of the phrases highlighted were:
- Malicious/malicious damage
- Pedal cycles
- Bedding down (of new structures)
Many of the terms are not expressly technical but rarely arise in everyday life, suggesting it is vital that insurance companies consider carefully the choice of words used within policy documents to ensure utmost clarity for their customers.
Meeting customer needs
Ms Geldard concludes: "It's clear we need to make different assumptions when drafting wordings with regard to the preferences, knowledge, time available and literacy skills of customers, so that we write policies around their needs, not ours. We will be looking at even clearer definitions, less text, more icons and graphics and more real examples to bring product wordings to life.
"We are absolutely committed to continuing to ensure our business becomes even more customer focused. These children aren't just representative of many of our current customers, they're our future."
- Children in this age group have a good but broad understanding of the concept of insurance.
- Many are confused when insurance terminology does not match real-life usage of words.
- Some of the explanations can be a bit wordy and children are confused when given the definition.
- Laying information out in tables is a good way to increase understanding, with it being clear and concise.
- Increased use of imagery would make documents more engaging and easier to access.
- More work must follow across the industry as a whole.