However, ‘the industry has some great potential’ around using artificial intelligence to create personalised interactions with consumers, says expert panel
The insurance industry still has “real work” to do around improving communications with customers, especially following the dip in consumer trust resulting from business interruption and travel cover confusion arising from the Covid-19 pandemic, according to Adam Winslow, chief executive of general insurance, UK and Ireland at Aviva.
Discussing the lessons learned from the pandemic at the ABI’s annual conference last week (22 February 2022), Winslow told delegates that “how we think about communicating with our customers and how well understood and clear our policies are is probably one of the big themes we should be taking forwards”.
He continued: “When you reflect on do customers really understand what they’ve bought, how it responds and what they’ve got – there’s still real work for us to do as an industry to get some of that stuff right and I think that was evidenced throughout the last two years. It’s still work that we need to do, even today. Anything we can do to make it easier for people can only be a good thing.”
For Trevor Jones, partner and head of insurance at KPMG UK, the insurance industry’s reliance on jargon and complicated language is rooted in its desire to comply with sector-wide regulation.
However, he feels that overcomplicated language could, in fact, be a detriment to compliance.
He explained: “Insurance and long-term savings is quite complicated in a number of cases and we use complex language because we’re worried about complying with certain rules.
“Unless we can actually get comfortable that we can explain what is it that we’re doing and what someone is buying in simple terms, then to my mind, we’re not really complying with the rules because people don’t actually understand what has been bought.
“It is that direct communication in direct, simple language, I think, is really key.”
The ABI’s president and group chief executive of Royal London Barry O’Dwyer agreed, noting that the insurance industry needs to be more “intuitive” to ensure that policies work as customers expect and don’t issue “nasty surprises”.
He feels that the sector has turned customers off by overwhelming them with information and data, so simplifying communications and making policies work in line with customers’ intentions should be a key agenda item moving forward.
Role of artificial intelligence
To mitigate these communication challenges, Jones recommended employing omnichannel communications as a starting point, to connect more with customers.
However, the use of technology and artificial intelligence (AI) can also have a starring role to play in improving communications with consumers.
Jones explained: “If you think about the AI channel of communications, you have the ability to get more targeted, more direct communications to policyholders, so they can actually understand what they’re doing in a multiple variety of different ways.
“AI and cloud-based solutions means that you have [to work with] the insurtechs - some of whom have great, whizzy front ends, some of which have great ideas that help people in the gig economy get short-term contracts.
“It’s all about different thinking, which is fuelled by the opportunity that AI and technology brings. It helps change things and generate better outcomes for customers.”
O’Dwyer agreed, noting that the insurance industry’s use of technology and AI for communication is currently behind other sectors, for example – the personalisation offered by streaming services like Netflix.
However, “this is where the industry has some great potential”, O’Dwyer said, because AI can be used to “target our communications, figure out what communications work for an individual customer and then segment the communications appropriately. There is lots that we can do there”.
He continued: “Part of the Consumer Duty will be about helping customers to get themselves to a better outcome and I think it’s going to be incumbent on insurers to help customers more than we have done in the past.”
This conversation formed part of the opening panel debate at the ABI’s 2022 conference, chaired by the association’s new director general Hannah Gurga. Also featuring on the panel was Katy Balls, deputy political editor at The Spectator.