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How clear are your policy wordings?

4 June 2018

Cyber eye

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:

Read our report




I am delighted to see the fruits of this excellent collaboration between the University of Nottingham and Browne Jacobson LLP. The results of this partnership, with the development of a novel and innovative methodology for enhancing the readability of contracts, shows the value of collaborative working between Browne Jacobson’s leading insurance practitioners and the University’s linguistic experts.

Professor Jeremy Gregory, Pro-Vice-Chancellor, Faculty of Arts


A summary. Clearer wordings: easier to enforce, easier to sell, less likely to lead to regulatory difficulties... A good idea from one end of the purchasing spectrum to the other. [the type of insurance] shouldn’t make any difference.

Alison Colver, Lloyd’s Market Association (LMA)

Find out more about our policy drafting services, including how you can benefit from linguistic analysis of your wordings:

View our policy drafting service guide

Attendees

  • Alison Colver - (Chair) Head of Wordings, Lloyd’s Market Association (LMA)
  • Joseph Ahern - Policy Advisor, Association of British Insurers
  • Martin Bridges - Technical Services Manager, British Insurance Brokers Association
  • Stuart Clarke - Head of Technical Claims and member of Core Wordings Group, Hiscox Insurance Company Ltd
  • Jane Comerford - General Manager, Managing General Agents Association (MGAA)
  • Claudia Goodridge - Technical Wordings Manager, Hiscox Insurance Company Ltd
  • Richard Hyde - Associate Professor in Law, University of Nottingham
  • Tim Johnson - Partner, Browne Jacobson LLP
  • Francis Mackie - Partner, Browne Jacobson LLP
  • Ashwin Mistry OBE - Chairman, Brokerbility
  • Professor Louise Mullany - Founder and Director of Linguistic Profiling for Professionals (LiPP) and Professor of Sociolinguistics in the School of English at the University of Nottingham
  • Ian Powell - Wordings Manager, Markel International, Member of the LMA Wordings Forum Steering Committee and the Consumer Working Party
  • Martin Roberts - Head of Wordings, Liberty Specialty Markets, Deputy Chair of the LMA Wordings Forum and Chair of the Consumer Working Party
  • Mike Smith - Head of Contract Wording Underwriting, Brit Insurance, Chair of the LMA Binding Authority Wordings Group

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Together with...

University of Nottingham


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To read the report in full, please click here:

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