Aviva’s plan to tackle SME underinsurance and improve customer confidence in insurance will also give it a competitive edge in the market, according to Aviva SME commercial lines director Gareth Hemming.
The insurer announced today that is was planning to remove average policy wordings that cut claims payouts if the clients is underinsured and increase public and products liability limits as part of a wider campaign to improve customer trust in insurance.
The other key changes include: increasing the overall property sum insured by 20% for buildings and contents, with a minimum of £25,000 for contents and automatically increasing business interruption.
- Hemming says changes will make Aviva stand out in market
- Changes made following study of customers and claims
- Customers find commercial insurance products confusing
Aviva decided on which changes to make after it conducted a study 12 months ago into its claims history to identify areas that were the most confusing for customers.
The study revealed that customers found commercial insurance products confusing, with package products being one of the most difficult to understand.
Hemming said the confusion could lead customers to believe the product had not worked in the way they wanted it to when they made a claim.
He added: “This is a pretty unique package of measures because it is not just one thing. From a broker and customer point of view it is a pretty compelling product and proposition.
“To be able to give this level of simplicity to customers and brokers is about operating in the spirit of the policy. It is a fairly compelling proposition and it makes us stand out in the market.”
“It has been great to go through all our products. The cover operates in a way where customers who are truthful with us, get the cover they expect. That is why we are doing it now.”
Over time Aviva plans to expand the offering beyond Shop and Salon and Office and Surgery package products to include other commercial offerings such as residential and commercial property owners’ products.
Hemming did not disclose the impact of the changes on Aviva’s performance but he said the insurer was ”comfortable with the changes” because it wanted to build customer trust.
Aviva’s decision to remove the rule of average, follows the announcement by Allianz in January to abolish the industry-standard clause from its own SME policy wordings.
At the time Allianz director of SME markets David Martin acknowledged the move would affect its trading results.