It sounds like a very dry topic, but in the induction of our new staff we ask, two questions:

  1. Do you have insurance?
  2. Have you read your PDS?

These questions for us are driven out of the Insurance Council of Australia February 2017 Consumer Research on General Insurance Product Disclosures Research findings report.

The report provided five findings:

  • Finding 1: There is no single pathway to purchase and the use of information in decision-making is highly varied
  • Finding 2: While most consumers report they have evaluated the details of their policy, most do not access the PDS
  • Finding 3: While most consumers are confident in their understanding, comprehension appears to be poor
  • Finding 4: Many consumers do not consider the specific risks for which they need to purchase cover as a criterion for decision-making
  • Finding 5: The accessibility of the PDS can be improved, although there are other opportunities for stronger consumer engagement

Anecdotally we concur with Finding 3, where most staff confidently confirm they have insurance and understand it, yet under some very basic questioning it is evident that their detailed understanding and comprehension of their PDS is not at the level they expected.

Our own experience reflects the key observations in the report regarding Finding 3 where:

  • Consumer comprehension of generic policy exclusions and limits is poor.
  • There is significant consumer misunderstanding about the type of home policies purchased.
  • Prior claims experience increases the likelihood of better comprehension.

This realisation is important for our staff because often until you have had an insurance claim, insurance is something you have, not necessarily something you understand.

While we do not go to the extent of asking the qualitative questions such as that below, these are examples of the types of issues we cover in the role specific training for staff to ensure they understand the broader implications of the PDS, including the limits and exclusions unique to each insurer, brand and policy.

Further, if we understand that 80% of customers do not read their PDS before purchasing a policy, our customer care and the customer centric repair journey is as much about education and expectation management as it is about repairing our customer’s homes.

Finally, the research showed that price factored heavily in the selection of a policy, over the specific risks covered.

While the research in-of-itself is interesting, it is how research such as this translates into our daily business that is of most importance to our clients, their customers and ourselves as a building partner.

For more information on the report please see: The ICA Effective Disclosure Research Report