Abdur-Rehman Mangera, Head: Group Benefits, Bryte Life
Insurance products often top the list of grudge purchases despite the industry’s vital role as an economic enabler and financial safeguard. That becomes less surprising when we realise how little consumers understand about the features and benefits of insurance products, particularly life insurance. (Ramchander, Manduth, 2016).
Changing the negative perceptions and miseducation around insurance and insurance products will ultimately require an industry wide commitment to effective and consistent consumer education. Although each insurer will customise its communications to meet its clients’ needs and align with the insurer’s offering, all industry players can consider several universal factors when it comes to consumer education.
Prioritising transparency and providing clear communications with policyholders are a great way to educate consumers. This can be achieved using easily understandable policy wording, plain language and additional tools and resources – such as language translation – to help policyholders better understand their cover and benefits.
The quality of customer service plays a significant role in educating policyholders. Insurance companies with excellent customer service often have representatives who can answer questions, explain policy details and provide guidance on coverage options.
Many insurance companies now offer online resources, including FAQs, educational articles and videos, to help policyholders access as much information as needed on their insurance products. These resources are particularly valuable for consumers looking to engage in self-directed education at their convenience.
Regular communication is key. Insurance companies that effectively communicate with policyholders about policy changes, options for coverage adjustments and general insurance information empower their customers with relevant and timely information and enhance trust in their brand and products. Offering structured education options, such as financial literacy programmes or seminars, helps policyholders understand their insurance products and how insurance fits into their overall financial planning.
New technologies and data analytics tools provide powerful ways to personalise recommendations to policyholders. More precisely, it aids them in identifying and understanding the types of coverage they would need based on their individual circumstances.
Consumer advocacy groups and organisations can play an invaluable role in educating the public about insurance products and assisting individuals to understand their insurance options better. Of course, while insurers have a duty to educate the public, customers should always do their due diligence when purchasing insurance. Reading policy documents carefully, asking questions and seeking external resources or advice if needed, are all important considerations when choosing new products or assessing your current level of cover.
Getting the fundamentals right
While there is no shortage of strategies, resources and channels that insurers can use to drive consumer education, it is important to get the basics right first. That means transparency, clear communication and regular, timely updates at key points in the process. Insurers can make significant headway simply by eliminating overly complex language and industry jargon for policy wording and client communication. Instead, they should aim to guide consumers, while also adopting an approach of proactively informing policyholders about important changes as and when they happen.