The Insurance Language is Renewed

Thanks to a guide of good practices, an important first step has been taken so that the insurance language included in the information sheets that entities of the sector must elaborate is more understandable for consumers.

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In recent years, the Spanish Union of Insurance and Reinsurance Entities (Unespa) has promoted two interesting projects. The first of these is the We are Safe initiative, an informative plan launched in 2016 whose objective is to bring insurance to citizens, so that they know the role played by the insurance activity in society, through close, simple contents and understandable.

And the second is Insurance to understand , framed within the program We are Safe and whose purpose is to explain what the insurance world does, with what words it explains it and what its work is for. Without a doubt, it is a magnificent initiative articulated around the insurance language and with a purpose that many final customers will thank: familiarize users with the slang of the sector.

In the case of the youngest, as has been shown in the post “What do the” millennials “demand from the insurance sector?” , One of the main demands of this group of insurers is the use of a language clearer both to communicate the products they market and to explain what type of coverage includes insurance.

An opinion shared by Pedro J. Ramírez, director of the digital newspaper “El Español”, and expressed in the latest edition of Madrid Seguro, a forum organized by the Madrid Association of Insurance Mediators . Through the presentation “How to win the customer in the digital age”, the veteran journalist emphasized that “insurance has to communicate more and better”.

And while he recognized the ability of innovation and adaptation of insurance to the new times, he stressed that there is a communication problem that must be resolved. “It is much easier to convince someone to play Primitiva than to ask them to take out life insurance,” said the founder and editor of the newspaper El Mundo.

Guide to good practices in the insurance language

Whether they are “millennials” – digital natives with a close link to the “online” world – or “lifelong” clients – those who want to be physically cared for at the offices of their insurance company or insurance broker – the truth is that In order to reach the user in a more direct and simple way, it is necessary to use a more comprehensible language. And that interest of Unespa to simplify the terms used in the insurance activity has materialized in the “Guide of good practices in the terminological use used in the information document of non-life insurance products” , framed within the program We are Safe.

According to Unespa, the purpose of this new document, in which 38 insurers have participated, is to ensure that the words included in non-life insurance policies-automobiles, home, health, deaths, etc.-are more clear and understandable. In this regard, they point out from the association, the Insurance Contract Law has meant that legal terms and professional jargon that are difficult for many users to understand are commonly used in the drafting of insurance contracts. On this question, Pilar González de Frutos, President of Unespa, said:

“Simplification provides greater protection to the customer than the more rigid terms, which can be worse understood by users. I am convinced that a transparent sale in which the policyholder understands what he is buying will produce better results. “

Clearer and simpler information for consumers

Together with the demands of users and the will of the insurance sector, the regulations have also influenced the elaboration of the aforementioned guide. Thus, the Regulation of Execution 2017/1469 requires that the information document on non-life insurance products that entities must deliver to users before contracting a policy is written using simple language that departs from the specialized jargon.

An information sheet, by the way, that will be obligatory to provide clients once the new Private Insurance and Reinsurance Distribution Act comes into force – the result of the transposition of the European Directive 2016/97, better known as the Distribution Directive of Insurance (IDD, for its acronym in English) -.

In short, the “Guide to good practices in the use of terminology used in the non-life insurance product information document” aims to become an added value tool, in terms of language, to implement the aforementioned document. Through it, the aim is to provide users with clear and simple information about a specific product, making it easier for them to make comparisons and make informed decisions about the insurance that best suits their needs.

Terms that may not be used or replaced

In order for insurance to adapt to today’s consumer trends, for the preparation of the guide a fieldwork has been carried out in which consumers have participated and which has resulted in a selection of 51 terms. susceptible to be replaced in the information document on non-life insurance products. Words that have been decided to divide into three groups.

The first one corresponds to the technical terms that, due to their complexity, should not be used. In particular, the guide proposes that the following should not be used:

  • Actuarial age
  • Spoliation.
  • Market value.
  • Value again.
  • Replacement value.
  • Estimated value.
  • Real value.
  • Venal value

As for the second group, it is made up of 22 technical terms that can be replaced by everyday words or familiar expressions. And while all are interesting, we could highlight the following:

  • Part of sinister. Proposed term: Communication or declaration to the entity.
  • Policy. Proposed term: Contract.
  • Cousin. Proposed terms: Price, contribution, payment.
  • Sinister. Proposed terms: Damage, accident, incident, loss, benefit, death, disability, etc.
  • Subscribe. Proposed term: Contract.
  • Taker Proposed term: Contracting.
  • Expiration. Proposed term: End date.

And finally there are the 21 terms that, having not found an alternative substitute in the common language, should be replaced by a brief description. Among them:

  • Scale of cars . Proposed term: Valuation system for personal injuries in traffic accidents.
  • Content. Proposed term: Furniture and insured objects.
  • Continent. Proposed term: Insured property.
  • Franchise. Proposed Term: Amount charged to the insured (as applicable depending on the branch).

In summary, an important first step has been taken to make the language of insurance more comprehensible for all types of people. According to Unespa, the use of the new proposed terms will result in a better quality of service, since, knowing and understanding the products better, customers will have expectations that will adjust to the benefits agreed in the contracts.