Simplifying communication in a complex insurance industry remains essential for clients

In the insurance industry, where often complexity is the norm, the importance of clear and concise communication cannot be overstated. Effective customer communication in the insurance industry goes beyond mere information exchange; it’s about fostering relationships, instilling trust, and ensuring customer satisfaction.

“In a complex environment, where policies are intricate and risk is involved, clear, simplified, and transparent communication becomes a cornerstone for success. It helps clients understand complex policies, terms and conditions, and claims processes, while also allowing businesses to demonstrate their commitment to a client’s insurance journey. Furthermore, it helps prevent misunderstandings and ensure that clients are aware of what is covered in their policies and what is not covered,” says Farhaana Baartman, Hollard Life Solutions Chief Customer Officer.

According to Baartman effective communication is a linchpin in the insurance landscape, as it directly influences customer satisfaction and, consequently, impacts brand reputation, regulatory compliance, and overall financial performance. Timely, clear, and respectful communication from insurance providers has the potential to elevate the entire customer experience. Satisfied customers are not only more likely to renew policies but also to recommend the company to others, fostering enduring relationships.

“Communication is a reciprocal process, providing customers with a platform to share their experiences with their insurers. The feedback can offer invaluable insights and can guide insurers to refine processes, enhance offerings, and shape product development and brand positioning,” highlights Baartman.

She notes that “In cases where a customer expresses dissatisfaction with their coverage or a particular process, the resolution of complaints becomes a pivotal moment. Communication during this phase significantly influences the customer’s overall experience and their decision to stay with the insurer.”

Effective communication becomes crucial, especially when issues arise. Where issues are not resolved, clients should be made aware of the channels for escalation, including escalation to the Ombudsman.
According to the Insurance Ombudsman 2022 Annual Report, “poor communications/documents or information not supplied/poor service” ranked as the second-highest cause for complaints, behind claims declined because of policy terms or conditions not recognised or met, accounting for 33.99% or 1,193 cases in total in 2022. This highlights the significance of clear and effective communication. Complaints related to claims being declined based on unmet conditions constituted 44.99% of all complaints, totalling 1,579 cases.

Baartman advises that insurance companies should implement clear and transparent communication strategies, provide educational materials, offer accessible customer support, and actively seek feedback to continually improve the communication process.

She notes that “Understanding life insurance policies can be a challenge for many because of the inclusion of legal and technical terms that may confound the average person. The intricacies of industry-specific jargon often leave customers grappling with confusion regarding the terms and conditions of their policies.

Customers frequently find themselves navigating through lengthy, dense policy documents and find it difficult to extract essential information about their coverage, exclusions, and other crucial details. The lack of clear content organisation and concise and simple explanations further exacerbate the challenge, hindering their ability to grasp vital policy information. Subsequently, this impacts the overall claims process.”

A pivotal aspect in a customer’s perception of their insurer is the claims process, which can be emotionally taxing for beneficiaries, especially when claims cannot be processed, resulting from a client having misunderstood their policy terms from the onset. Insufficient communication regarding required documentation, claim procedures, and timelines can heighten stress during what is already a traumatic period.

In addition, communication tied to claim disputes or repudiations emerges as a considerable source of frustration for policyholders. The absence of clear communication and explanations regarding reasons for repudiation or the claims process often can lead to dissatisfaction and a sense of unfair treatment by the insurer.

Life insurance policyholders may not fully grasp all the features and benefits in their policies, which can potentially lead to underutilisation of available policy benefits. Inadequate communication about the policy’s nuances may result in customers missing out on various rider benefits, additional cover options, or investment components that could enhance the value of their life cover products. Insurers, in their pursuit of customer loyalty and trust, design these offerings with the intent of providing the best possible products. However, ineffective communication can hamper customers’ ability to make optimal use of these policy documents.

Baartman says, “In a linguistically diverse country like South Africa, understanding policy language poses challenges due to the complexities of legal and technical terms, industry-specific jargon, and the intricate nature of insurance products. To address this, insurers should adopt clear communication practices, offer educational materials, and actively engage with policyholders to ensure a comprehensive understanding of policy terms and conditions.

“Cultural sensitivity and empathy are paramount in the communication process. Having trained and accredited advisors and sales consultants who can communicate effectively in a language comfortable for clients is crucial,” she says.

She emphasises that efforts should be made to enhance accessibility to policy documents and insurance-related information, including the use of multiple languages, diverse communication channels such as digital platforms and self-service options, and the production of educational material for both customers and brokers.

Insurers face the challenge of striking a balance between drafting legally precise, accurate, and unambiguous communication while ensuring simplicity and ease of understanding for policyholders. The onus is on insurers to make policies accessible, and simple to understand.

Simplifying policy wording is essential for insurers to ensure that clients can easily understand their coverage. Crucial to any communication efforts is the importance of tailoring communication to the individual needs of each client. Personalised communication shows a commitment to understanding and addressing each client’s unique situation.

“With the insurance industry widely undergoing digital transformation and other changes, effective communication will be crucial in providing clear instructions, user-friendly interfaces, and self-service options that can enhance the overall customer experience,” says Baartman.