The insurance industry is renowned for its use of jargon. Despite great efforts made by many companies to achieve the coveted Crystal Mark for clear, plain English on policy documents the fact is that many policies still contain pretty complex language.
While intermediaries can do their best to explain T&Cs and what is and isn’t covered at the point of sale, customers still have to read through policies to make sure they fit the bill. The language used can make it difficult for some to truly understand what they have bought and result in complaints to the Ombudsman when the policy doesn’t respond as the customer expected.
In the digital era in which we now live, you could argue that clear communication is even more important than ever. An increasing number of our customers research household insurance and the like from their smartphone or tablet and insurers are using social media to reach out to them.
There is no doubt that the insurance industry needs to find a way of communicating to customers in unambiguous plain English – perhaps using imagery in place of words to help bust the jargon. It’s certainly on the regulator’s watch list and it’s due to publish a discussion paper in the coming months to see how it can work with the industry to help it communicate more effectively.
However, try as the industry might to simplify the language it uses, is its hands tied?
If you think about it, the financial services industry as a whole has been relentlessly singled out for treatment that few other industry sectors have faced. We are subject to uncompromising scrutiny and control at every level from how we conduct our businesses to how we treat our customers. Now I’m not saying that we don’t need regulation – however I’m concerned that we have reached a point where our customers can take absolutely no responsibility for the products and services they buy from us.
What other retail sectors are able to get away with this? No doubt many of you, like me, spend a lot of your time on the road visiting clients which means calling in at a lot of motorway service stations and wonder how they can charge the exorbitant prices they do for fuel and other consumables. If they were subject to the same rules that the financial services industry has to deal with there would be warnings on fuel pumps and gloves for diesel pumps would be mandatory. Cashiers would be required to point out the contents and health risks of any food items bought. Each station would have to disclose its profits to motorists.
OK, perhaps this is an extreme example and the idea of regulating service stations in the same way as we are regulated is somewhat ludicrous – but it helps illustrate my point. While insurers and other financial services providers face criticism and pressure to simplify their use of language and it is a worthy cause, the fact is we also face the challenge of doing so in one of the most heavily regulated sectors that seems to absolve customers of any responsibility. We’d like to beat the bull but need the regulator’s approval first!
Brian Coulton is head of sales at Source Insurance
