Standard definitions may be a useful step forward for consumers but an increase in plain language communication and less technical complexities would be widely received according to the heads of two life insurance companies.
Speaking at the recent Financial Services Council Life Insurance Conference in Sydney, Metlife Insurance, Chief Executive, Deanne Stewart said there should be more standard definitions to remove confusion between insurers and consumers.
“We all have different definitions and use different medical codes which is not only confusing for us and our staff but very confusing from a customer perspective,” Stewart said.
“I believe we should have more standard definitions. Also the way we collect data in the underwriting and claims process would really help both consumers and us in terms of understanding the risks and natures across the industry.”
“What I would say in creating the standard definitions is that we don’t do that on our own but do that with customers in real customer language”
“What I would say in creating the standard definitions is that we don’t do that on our own but do that with customers in real customer language because the events of the last week have shown just how technical that nature is, so much so that a lot of us in the industry don’t understand the underlying definitions.”
While ANZ Group, Australia Wealth – Managing Director, Alexis George was unsure whether insurers competed on standard definitions she agreed with the need to tackle the complex language in life insurance directed at consumers.
“We absolutely have to do something about the technical language we use. I like to think I am a reasonably intelligent woman but some of these things are well beyond my mental capability. If we can’t understand it in this room, then how can a customer understand it,” George said.
“We are not an easy industry to deal with. Print a TPD claims form in your area and attempt to go through it yourself and you’ll get a sense of that.”
“We absolutely have to do something about the technical language we use.” How sad it is to see this stated all over again. The predecessor of the FSC, IFSA, conducted – with a fair investment of cash – an exercise designed to address just this: in 2006!! Project Lingo identified, among other imperatives: “There is an identified need by industry leaders to communicate the benefits of life and related policies in language consumers can truly understand” and “There is recognition of the difficulty in creating communication messages that are easily understood and effective”. Researchers were paid to conduct focus groups, they told us what they needed, insurers sat around (I was there) agreeing it was terrible and we have to do something; all looked wonderfully gung-ho. Very sadly, the doer who drove that passed away. What happened then? Nothing. Nil. Zip.
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