We understand the importance of offering clear policy wording that our clients and their customers can easily digest. This is why we worked with the University of Nottingham to undertake a detailed academic study into the readability of insurance policies. Our research produced some fascinating results.
The main findings from the study are that:
- all policies reviewed required education to at least A-level (and in most cases graduate or post graduate level) in order to be meaningfully understood;
- policyholders routinely find it difficult to understand what is and what is not covered, when given real life scenarios (comprehension ranged from between 32% and 66%);
- the least readable policy that was tested could only be meaningfully understood by 13.4% of the UK adult population.
Our findings in detail
The University of Nottingham’s leading linguistics researchers worked together with the market-leading insurance policy wording team of Browne Jacobson; coming together for a roundtable discussion to explore their findings.
Both found the study firmly indicated that the high reading age of policies has a material impact upon a policyholder’s understanding of the cover. With 1 in 7 adults in England (5.1 million people) classified as ‘functionally illiterate’, this highlights the importance of ensuring that policies are clear and simple to comprehend.
However, the study also revealed that by applying the drafting methodologies summarised in the report, it is possible to significantly improve the readability of policy wordings and to improve comprehension.
For example, it was possible to reduce the reading age of one policy by 10 years, from doctorate level to that of a Year 8 pupil (i.e. a 12-13 year-old). This increased the percentage of the UK population that could understand this clear insurance policy by some 75%, from 13.4% to 89% (an increase of 40.4 million people).
As experienced insurance solicitors who specialise in policy drafting, we have often felt that the quality and clarity of wording across the market could be improved upon. We found our collaborative study has confirmed that theory.
How was the study undertaken?
The in-depth study was split into two phases. Phase 1 of the research saw the Browne Jacobson insurance solicitors select and anonymise buildings and contents policies - the researchers at the University of Nottingham were not aware of the identity of the insurers. These were then examined for readability and given reading scores.
The study participants were asked to complete a number of comprehension questions to gauge their understanding of the policies, and eye-tracking technology was used to understand how each text was read by the participants.
The results phase was split into two; with the first looking to understand the reading age, sentence length and structure, use of defined terms and more. Using the drafting techniques drawn out from the research, the second phase reduced the complexity of the policies to the level expected of a 12-13 year old.
Overall, the study shows that much can be done to improve the readability of policies, and that there are significant benefits for those insurers who produce clear insurance policy wordings.
To read the report in full, please click here: