Lloyd’s calls for simplified and more certain cover

Lloyd’s has published a report exploring how the insurance industry can remove complexity and uncertainty around insurance coverage.

The report is in response to the societal change driven by COVID-19 and the legal disputes that have arisen over pandemic insurance coverage.

The research paper, Building simpler insurance products to better protect customers, sets out three priorities for the market.

First, it should leverage and build on the application of existing leading practice, including a linguistics review of customer documentation - for both simple and more complex products.

Second it should invest in continuous product design and delivery innovations, including data-led policies and digital contracts, as well as exploring more radical options like parametric or outcome-based insurance.

Third, it should involve customers directly in product design to build simpler, more relevant products for their changing needs and post-pandemic risk profiles.

John Neal, CEO of Lloyd’s, said: “As many businesses around the world evolve to withstand the continued impacts of the COVID-19 pandemic, including radically changing their business models, the insurance industry must urgently reassess how it can better serve and support its customers.”

He added: “While the societal and economic impacts of the pandemic are of a scale that has never before been experienced, it has reinforced the global industry imperative to accelerate its efforts to build simpler insurance products that are more easily understood by its customers.”

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