[lg policy] Lost in translation: Only 13% of UK policyholders understand their insurance policies

[Harold Schiffman]

 Lost in translation: Only 13% of UK policyholders understand their
insurance policies
by Terry Gangcuangco
<https://www.insurancebusinessmag.com/uk/authors/terry-gangcuangco-70670/> 05
Jun 2018
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[image: Lost in translation: Only 13% of UK policyholders understand their
insurance policies]

Who hasn’t heard of the saying ‘keep it short and simple’? Probably no-one,
yet it seems insurance policies still haven’t applied the message as a new
study finds not even a fifth of policyholders in the UK understand them.

Research carried out by the University of Nottingham, in partnership with
insurance law firm Browne Jacobson, has revealed that insurance policies
are too complex to comprehend. In fact, only 13% get it. In addition, it
turns out policies require a minimum of A-level education in order to be
meaningfully understood.

For instance, barriers such as the extensive use of uncommon or low
frequency words and phrases hinder comprehension. Other culprits include
complex sentence and paragraph structures.

The good news is, wording troubles can be remedied.

The same study used drafting methodologies in order to significantly
improve policy readability, reducing the ‘reading age’ for the most complex
document from postgraduate level to 12 or 13 years old. This improved the
percentage from the previous 13% to a whopping 89%.

“To knock 10 years of education requirement off the wording was certainly
more than we expected before we undertook the research,” said Browne
Jacobson insurance partner Tim Johnson. “From the discussions we have had
across the industry there is almost universal acceptance that the current
level of complexity needs to be addressed.

“There is no silver bullet but we have demonstrated that through the use of
a range of drafting techniques, including the use of eye-tracking software,
we can significantly increase the number of people who can easily read and
understand the cover they have purchased.”

The eye-tracking technology referred to by Johnson is able to pinpoint
where the eye focuses, to identify words that receive a significantly
greater amount of attention and those that are skipped altogether.

“With this data, it is possible to identify language processing
‘bottlenecks’ where participants had to stop and spend much longer than
expected trying to understand the text,” read the report. “The research
team was able to study the ‘bottlenecks’ and draw precise conclusions as to
what key words, phrases, and language constructions were particularly
difficult to understand.”

The linguistic research, which was funded by the Higher Education
Innovation Fund and the European Union, also found that sentences should
generally be kept as short as possible. According to the study, most
readers’ mental processing ability significantly declines once a sentence
exceeds 26 words.

“Drafting a perfectly worded policy document is virtually impossible, but
what our research proves is that there clearly is a lot that can be done to
improve how they are currently written,” said Dr Kay Snowley, business
development manager from the university’s Linguistic Profiling for
Professionals (LiPP) unit. “Each finding shows that with a little
alteration, over time, the overall readability and understanding of these
documents can be improved.

“This isn’t just helpful for the individual but is much better for the
companies issuing them. There is no benefit for there to be doubt in
people’s minds as to what and how they are covered by a policy.”

The report also cited literacy skills in the UK, which are predicted to
decrease over time.

“The insurance industry has a regulatory duty to ensure the information in
policies and contracts is clear and expressed in plain and intelligible
language,” added Johnson. “Failure to do so could not only make them harder
to sell but leaves the industry vulnerable to legal challenge from
policyholders and the real possibility of further regulatory intervention


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 Harold F. Schiffman

Professor Emeritus of
 Dravidian Linguistics and Culture
Dept. of South Asia Studies
University of Pennsylvania
Philadelphia, PA 19104-6305

Phone:  (215) 898-7475
Fax:  (215) 573-2138

Email:  haroldfs at gmail.com
http://ccat.sas.upenn.edu/~haroldfs/

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