The Problem
Insurance firms have historically measured communication success by whether information was provided — not whether it was understood. The Consumer Duty reframes the obligation entirely: firms must evidence that customers can make effective, timely, and informed decisions. 82% of customers reported no improvement in insurer communications since the Duty came into force.
The Pattern
The structural move is to replace the disclosure test (“did we tell them?”) with a comprehension test (“can they act on what we told them?”) — and to build the feedback mechanism that makes comprehension visible before harm occurs:
Indicators It's Working
In Practice
A health insurer tested its policy summary with a sample of actual customers and found that only 31% could correctly identify whether their policy covered mental health treatment. The document was written at a reading age of 17. They rewrote it at reading age 12, restructured it to lead with exclusions rather than benefits, and retested: comprehension of the mental health exclusion rose to 74%. The Flesch-Kincaid score improved, but it was the structural change — leading with what the product does not cover — that drove the comprehension shift.
A home insurer noticed that 15% of all inbound calls in the first month of a policy were customers asking what their excess was. The information was on page 8 of the policy schedule. Moving it to the confirmation email — three lines, no jargon — reduced those calls by 60%. The communication had been compliant throughout; it only became effective when the comprehension signal was connected to the design.
Watch-Outs
The primary failure mode is equating comprehension with readability. Flesch-Kincaid tells you whether words are short and sentences are simple; it says nothing about whether the customer understood the consequence of what they read. A second is testing only with digitally confident, English-speaking customers who do not represent the actual base. A third is establishing the standard but not enforcing the gate — allowing communications to launch on commercial timelines despite failing the comprehension test.
Evidence & AI Lens
- E1The FCA’s Consumer Understanding outcome requires firms to evidence that customers can make effective, timely, and informed decisions — not merely that information was provided
- E282% of customers reported no improvement in how insurers communicate since the Consumer Duty came into force
- E3The FCA expects firms to test, monitor, and adapt communications to ensure customer comprehension
- E4Only 29% of firms conduct proper product testing with vulnerable customers in mind before launch
Natural language processing can score communications against comprehension benchmarks before publication — assessing not just readability but structural clarity and the prominence of consequential information. Generative AI can produce alternative format versions automatically — simplified text, audio scripts, easy-read formats — making it economically viable to test multiple variants with different customer segments.