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Why wordings matter: revising UK personal accident wording to boost consumer accessibility
Ida Celentano and Toby Clark, Executives, Technical Underwriting, delve into the Lloyd’s Market Association’s (LMA) new personal accident policy wording (LMA3177), and how the changes aim to boost consumer understanding.
In today's insurance landscape, catering to consumer requirements is paramount. In light of this, the LMA is taking proactive steps to produce model wordings that are suitable for consumers. This project involves updating several existing LMA model policy wordings to ensure that the policy language is clear and the cover is presented in a consumer-friendly format. This work will help ensure that our members are well-equipped to meet the evolving expectations of policyholders.
With this goal in mind, the LMA has published a new model UK Consumer Personal Accident Policy (LMA3177) based on LMA3132C (also known widely in the market as the ‘K form’). The LMA is working with external designers to produce an interactive pdf version of LMA3177, which will soon be available on the Lloyd’s Wordings Repository. Since the publication of two Home Insurance Policies (LMA3170 and LMA3171) in 2023, any new model consumer policy wordings published by the LMA will be made available as an interactive pdf format, which includes navigation tabs to major sections of the wording, ‘pop-up’ definitions and helpful information throughout the document. This initiative addresses the heightened demand for clear and accessible insurance documentation.
With a focus on enhancing clarity and comprehension, the central aim when drafting LMA3177 was to ensure that the policy language was as easy as possible for consumers to understand. This effort reinforces the LMA’s commitment to providing consumer-friendly insurance solutions within the Lloyd's market.
Personal accident insurance provides protection to the insured for losses caused by an accident or illness. This type of insurance can cover loss of earnings or pay a benefit amount if the insured suffers an accident or illness. Recent trends have indicated an increase in the popularity of personal accident policies. Policyholders are becoming more aware of the risks, the benefits of insurance and ways to financially protect themselves in the event of an accident or illness. This has highlighted the importance of producing a consumer-friendly model policy wording for this class of business.
LMA3132C was based on the original LMA3132 wording, which was updated to an ‘A’ version in 2015 to ensure compliance with the UK Insurance Act. The next ’B’ version was updated in 2019 to reference the Data Protection Act 2018, and again to a ‘C’ version in early 2024 following the publication of the LMA’s model Consumer Sanctions Suspension Clause (LMA3201).
Under the guidance of David Powell, Head of Technical Underwriting at the LMA, several key stakeholders and subject-matter experts have been involved in the process of drafting LMA3177 since June 2023. The LMA has worked with a subgroup of the Personal Accident Business Panel, medical practitioners and consumer wordings specialists to ensure that the new model policy meets the needs of underwriters and consumers.
Simplicity and clarity were the guiding principles for the update to the LMA’s model personal accident wording, which resulted in a completely new wording. Several of the terms and conditions from LMA3132C have been completely reworded, examples have been added to explain the coverage and there has been a full review of the policy definitions. Each step was taken with the aim of ensuring that the document is clear and accessible to a wide audience.
This is not the first time the LMA has been at the forefront of transforming policy wordings. Last year, the team published the Home Insurance Policy - LMA3170 - which was complimented across the market for its accessibility. With work ongoing on several more consumer wordings, the LMA is helping to ensure that consumer-friendly policies that meet the needs of an ever-adapting market become the standard. This has been a fantastic project to be a part of and the LMA is eagerly awaiting the publication of more model consumer policy wordings throughout 2025.