Research from the University of Nottingham has revealed that insurance policies are too complex for 80 per cent of customers to understand.

Insurance CustomersConsumers were given a number of insurance policies to read, and then took comprehension and eye tracking tests to see how well they had grasped their content. The researchers found that all the policies required at least an A-Level education to understand them, and some required undergraduate or even postgraduate level education. The main problems were a tendency for policy documents to be written in very long, complex sentences, with a high level of jargon and technical terms.

For instance using the term ‘subterrainian’ instead of ‘underground’ or using uncommon phrases such as “inasmuch as” and “in so far as” which were also found to leave readers confused. It is suggested that this could be the cause of many people in the UK not having insurance.

45 per cent of renters don’t have contents insurance and 8.5 million people don’t have life insurance.

The crux of the study can be summed up by the acronym KISS. Keep It Simple, Stupid. The research, which was commissioned by the Government, found that rewriting the policies using simpler language resulted in a much higher comprehension level. In some cases, a policy that would originally have required a postgraduate education could be understood by a secondary school pupil. Clearly, an increased level of comprehension results in greater engagement and a better customer experience. Keeping it simple, is a common theme in insurance.

Insurers that simplify the application process have a better conversion rate.

This might be as simple as investing in form-fill software that pre-fills applications reducing the amount of time and effort the customer needs to spend in terms of securing a quote and subsequently purchasing the policy.

Insurance is a sector that is plagued by heritage processes and procedures, but clearly times are changing and those providers that become more customer centric will find themselves drawing apart from the competition.