Simply Insurance

01 February 2008 Craig Harding, Altrisk

Simplicity should underpin one’s approach to insurance. In a complicated world where even a simple device like the cell phone has evolved into a multi-functional gadget that requires a Masters degree in Technology to operate, people are crying out for a return to the simple.

Give me what I need, in an understandable format, at a reasonable price within a practical time frame! This is the petition in all areas of life, and the insurance world is no exception.

There are great benefits to simplified systems, processes, procedures and even working relationships, which can be enjoyed by brokers, product providers and clients. These include lower costs to the broker, both direct and the cost associated with compliance and advice risk, and lower costs to product provider which in the long term results in lower premiums for the benefit of the consumer.

5 Steps to an Easier Life

1. Plain English – contracts are notorious for their ‘gobbledygook’ and insurance paperwork does not exactly break the mould. Straightforward, no nonsense use of language in application forms, quotes and even the policy document itself can reduce the time spent on the process and ensure greater understanding by both the broker and the consumer.

2. Reducing the paperwork – a broker shouldn’t need to be a mathematician to figure out a quotes package. Who’s winning by keeping numbers at an Einstein level of understanding? The length of some documents also astound.

Some insurers have proven that it’s perfectly achievable to keep a quotes package simple and the quote itself to around three or four pages, and an application form to a size that doesn’t destroy the rainforests. This translates to time savings for the broker and greatly reduces the risk of error.

3. Policy exclusions – eliminating unnecessary general exclusions means brokers and consumers have less complexity to contend with. Most consumers do not read their lengthy policy documents (who can blame them?) and therefore are totally unaware of the general exclusions that would apply to them.

4. Continuous improvements – by continually enhancing products, insurers can go on an unrelenting quest to attain greater simplicity.

5. Behind the scenes – a broker’s and a client’s allegiance can be won or lost by his or her experience of the “process”. A cost-effective, efficient and timely process with ever-improving turnaround times and ever-decreasing complexity makes for happiness all round.

Everybody wins

Inflation has been rising and insurers have been feeling the pinch. Their increasing costs have inevitably been pushed onto their delivery channels in a number of ways. The increase in regulations and the resulting complexity fall heavily on the broker, who inescapably takes on the additional risk. The more savvy consumer also adds to the pressure. But by simplifying processes insurers can keep everyone’s costs down, allowing for fewer mistakes, lower risk and improved service. The broker’s life is ultimately made easier.

The consumer is in a better position knowing exactly what he or she has bought, understanding the exclusions that apply, and the certainty that in the event of something happening his or her policy will pay out.

Insurers should make sure that they include simpler designs in all aspects of their business to meet the needs of intermediaries, consumers and their own business. The benefits are obvious.

And in this fast-paced environment, regardless of our occupation and specialised knowledge – we all have a desire for simplicity.

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