LMA revamps home insurance policy

Several LMA 'firsts' ensure policy readability

LMA revamps home insurance policy

Property

By Mary Or

The Lloyd’s Market Association (LMA) has hit several milestones with its newly revised UK home insurance policy 2023, all focused on making the policy as accessible to customers as possible.

While one in seven adults in England had a reading age of 11 years or less, LMA found that most home insurance policies required a customer with an undergraduate or postgraduate reading ability to successfully navigate them.

LMA thus revamped its life insurance policy to follow emerging international standards which encouraged accessibility through readability, such as the US NAIC policy simplification law and standard media practice of setting the reading age below GSCE English level, between eight and 14 years.

LMA worked with Browne Jacobson to make its home insurance policy easy to understand, applying research from the University of Nottingham. Both the law firm and university had agreed that simpler home insurance policies were easier to sell and implement and led to fewer regulatory complications.

The research used by LMA in revamping its policy focused on two particular aspects of readability – presentational techniques and linguistic techniques.

Presentational techniques embedded in LMA’s policy wording naturally supported customers as they navigated the wording of the home insurance policy, allowing them to find the information they needed from the policy in the least amount of time.

Linguistic techniques were also evolved from cutting-edge research analyses into the wording of insurance policies from the University of Nottingham’s School of English, which included a computational readability analysis, comprehension testing with real customers, and eye-trackers that studied how readers engaged with common policy wordings.

The result was a document optimised for consumer comprehension, LMA reported. 

LMA’s revamped home insurance policy also has an “all risks” version for the first time in the company’s history. The “all risks” version was published alongside the usual “named perils” home insurance policy to provide customers the choice of simpler, extensive coverage with fewer exclusions.

The revamped home insurance policy was also LMA’s first one to be built through an externally sourced design agency. The LMA’s home insurance policy is now in an interactive PDF format with a visual layout that further ensures the document is easy to read.

The home insurance policy revamp furthered Lloyd’s commitment to producing simplified products. It was overseen by the LMA’s UK property and household underwriting committee.

“[LMA] is proud to release this revised wording of the UK home insurance policy,” said head of technical underwriting David Powell. “The final document is the culmination of Browne Jacobson and the LMA’s collaborative, thorough, and meticulous revision of the policy to ensure that the new version is clearer, more concise, and best aligned with the way consumers will read and understand the policy.”

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