Plain language in Spain is now a requirement, not a nice-to-have. Read about regulations that require plain language, and the impact of clear language on Insurance firms.

For years, taking out insurance was a peculiar experience for most people: you signed a multi-page document, full of technical terms, complex clauses, and endless sentences… if you were lucky, you even read it. But you trusted that everything would be fine when you needed it.

The problem arises when the accident occurs.

And then come the questions:

Does this cover it? Will it cover the neighbor’s expenses? What exactly does this exclusion mean? Is that stated in the policy? I’d better call and have them explain it to me.

At that moment, what seemed like a simple document becomes a problem of trust, reputation, and operating costs for the insurer.

Every year, thousands of complaints, calls to the call centre and conflicts with customers have the same origion: the policies are not understood.
That’s why more and more companies are opting to implement plain language in their communications and insurance documents.

It’s not just about writing more simply. It’s about transforming the way the insurer relates to its customers, a, and also to comply with increasingly demanding regulations.

The insurance sector is experiencing a time of profound change.

Regulatory requirements, competitive pressure, and digitisation have brought into focus something that for years seemed secondary: the real understanding of contracts and policies.

Today we know that clarity in communication has a direct impact on three critical areas:

And in the insurance sector, these three areas are closely connected.

Insurance companies operate in one of the most complex regulatory environments in the economy. And the trend is clear: regulations increasingly demand transparency and understanding.

Law 11/2023 of 8 May is a broad Spanish law transposing several European directives on digitalization. Law 11/2023 reinforces the need for organisations to communicate clearly and understandably with citizens and customers. This regulatory change is part of a European trend that promotes transparency and clarity in official documents.

European regulations require that pre-contractual insurance information be presented in a clear, concise and understandable manner. You can find more details on the European Commission’s insurance website.

The Directorate General of Insurance and Pension Funds emphasizes the importance of providing clear, sufficient, and understandable information to the customer.

The European Regulation requires that information on data processing be communicated in a transparent and understandable way for everyone.
When documents fail to comply with these principles, the risk is not only reputational . It can also lead to complaints before supervisory bodies or conflicts with the Insurance Ombudsman.

In contrast with these directives, we find that Insurance documents are not designed to be understood.

For decades, insurance documents have been constructed with a legal and technical logic. It makes sense from a legal standpoint; it makes sense in the context of the 1980s… but not anymore. Now the customer must be at the centre.
In those legal and verbose texts we often find:

Fully understanding a policy is almost imposible for the average customer.

And when clients don’t understand what they’re signing up for, three things happen:

The consequences are not minor. Various industry studies show that a lack of clarity in policies leads to:

Between 20% and 30% of the calls are related to doubts about coverage and exclusions.

Up to 25% of claims stem frommisunderstandings regarding insurance terms. Misunderstandings about claims or conditions lead to avoidable conflicts. If everything is clear from the outset, the percentage of claims drops dramatically.

Many customers cancel their insurance when it’s time to renew because they feel they don’t fully understand what they’re paying for. It’s normal for them to switch to a «cheaper» policy if they don’t know what’s included or how they’re covered.

Sales agents and intermediaries spend a significant amount of time explaining documents that should be self-explanatory. Furthermore, the stress of dealing with vulnerable individuals negatively impacts the quality of their work.
In other words: obtuse language costs money.

When a company transforms its documents and communications, the benefits appear quickly.

When a customer understands their Insurance, they:

In our experience, we have found this to have a direct impact on Net Promotor Score, which is a statement by a customer on whether they would recommend the product to their friends or colleagues.

Insurance companies that communicate effectively gain something invaluable: trust.

Project Director at Cálamo&Cran, Sara has more than 15 years’ experience managing communication, translation and editing projects, training language professionals, and supporting authors on the path to publication. Her work focuses on project management, team organisation, quality processes and new technologies applied to the language sector. She is also passionate about books and effective communication.

See Sara Crespo’s LinkedIn profile or visit the Cálamo&Cran website.