The Lloyd's Market Association (LMA) has unveiled the latest version of the UK Consumer Wordings Guidance, a detailed tool aimed at assisting LMA members in conveying insurance concepts to consumers with clarity.
This release, created in collaboration with Browne Jacobson LLP, incorporates significant regulatory updates including the removal of Lloyd's minimum standards and the adoption of the Financial Conduct Authority’s (FCA) Consumer Duty.
Since 2015, the guidance has been key in aiding members to communicate with consumers about insurance. The changes include new sections dedicated to testing communication strategies and optimizing digital policy formats.
Additionally, the guidance offers advice on various facets of consumer communications, spurred by the new FCA regulations.
This initiative is also part of a broader effort by the LMA to enhance the clarity and customer-focus of insurance documentation. For 2024, the LMA plans to revise the UK Consumer Personal Accident Policy wording (K form) and introduce a new wording for property and business interruption insurance tailored to the needs of UK small and medium enterprises.
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David Powell, head of technical underwriting at the LMA, emphasised the organisation's commitment to improvement and clarity in communications.
“The LMA is dedicated to fostering a culture of continuous improvement and innovation,” he said. “We recognise the importance of clear and transparent communication and want to promote better understanding of policy wordings. We are working to equip our members with the tools and resources they need to improve customer engagement and drive positive change.”
Tim Johnson, partner at Browne Jacobson LLP, also commented on the collaborative effort with the LMA.
“The implementation of the FCA’s Consumer Duty is the latest step in the journey to ensuring that policy wordings are clear and transparent and – crucially – that customers can find the answers to important questions about their cover. It has been a pleasure working with the LMA and other industry stakeholders on the UK Consumer Wordings Guidance, and to share our experience of working with academics and market participants to help insurance customers better understand their products,” Johnson said.
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