However, because the highlighted section shows, the agreement lifts this usage restriction when the U.S. Centers for Disease Control and Prevention declare the existence of a “widespread viral infection transmitted by bites or contact with body fluids that triggers human corpses to reanimate and seek to consume living human flesh- and is likely to result in the fall of organized civilization.”
Yes, you read that right- Amazon is disclosing a contingency for that Zombie Apocalypse. If that catastrophe befalls us, you're allowed to use AWS software for anything you have to survive.
The proven fact that the flesh-eating undead can be referenced within an official document like this, with not many noticing, speaks to a bigger and more major problem: Disclosure documents are an awful way to communicate important information to your customer.
Companies bury important details in opaque disclosures they rely on no one reading. Examples abound – conflicts of interest for the financial adviser, service fees for your bank account, cancellation fees for your gym membership, price increases for your cable television package and – obviously – coverage exclusions for the insurance.
Organizations hide behind these disclosure documents and point to them as evidence that anything important is indeed revealed towards the customer. The reality, however, is the fact that a lot of companies (and sometimes entire industries) use disclosures to convey information they don't really want one to see.
Disclosure Downside #2: Comprehension
The second reason disclosures fail to advance transparency and trust happens because hardly anyone can understand them.
These are usually large, dense documents filled with unintelligible legalese and fine print (a shortcoming that was noted by the Federal Insurance Office in its own study from the industry's transparency).
The Edelman 2021 Financial Services Trust Barometer found that consumers viewed “easily understood terms and conditions” because the No. 1 component that would increase their trust in financial services. But, because the same study revealed, a lack of information transparency is the top reason why consumers distrust this industry.
There is really a fundamental misalignment between what consumers value (information transparency) and just what insurance firms actually deliver (information obfuscation). That discrepancy continues to haunt the until disclosures are transformed from legally mandated administrative documents into genuine displays of customer advocacy.
Moving From Confusion to Clarity
Accomplishing that transformation will require reinventing the disclosure therefore it clarifies rather than confuses, and inspires confidence rather than undermining it.
Here are some types of how the insurance industry could achieve that:
- Make disclosures obsolete. One method to attack the disclosure problem is to reduce the requirement for these documents to begin with. Although it could be na”ive to think disclosures would ever disappear in the highly regulated insurance business, firms should still ask themselves: Are there changes we're able to make within our business practices that will reduce the need for these mind-numbing disclosures? Southwest Airlines' highly successful “Transfarency” strategy is a great example of this approach. In contrast to many of competitors, Southwest doesn't have to agonize over consumer disclosures because it built the company around a simplified and nearly fee-free pricing structure (i.e., no baggage fees, no ticket change fees, etc.).
- Design for visual appeal. Today's jargon-filled insurance plan contracts, disclosures and amendments not only have been written by lawyers, they appear to have been designed by lawyers. No offense to the legal community, but creating documents with looks is not their forte. That's the domain of marketers, also it appears those folks rarely come with an chance to work their magic on these types of insurance documents. They are often walls of text with little white space and few navigation clues. That might appear to be an insignificant issue – marketing “fluff” – but it's not. Design, design and typography of a document can materially lessen the cognitive load it makes around the reader. Quite simply, a visually appealing disclosure can engage and enlighten consumers much more effectively than the usual poorly designed one.
- Use vignettes to construct understanding. The most jargon-free disclosures suffer from an important shortcoming – they describe conditions and terms in an almost academic fashion, detached in the realities of people's everyday lives. One can read a disclosure paragraph and obtain a theoretical understanding of an idea (e.g., damage from floods vs. wind-driven rain), yet not fully grasp its practical application. This is where explanatory vignettes can be used to great effect. Serving as a complement to traditional disclosure language, these are short “stories” that depict a common customer episode and much more vividly illustrate how the legal terms result in real life impacts. (Some insurers, for example, use this method of underscore what kinds of calamities are, and aren't, included in an insurance policy.)
- Leverage other communication platforms. The way people prefer to consume information is different drastically in recent years, yet disclosures have not evolved accordingly. In the current digitally enabled world, many consumers prefer to find out more by watching (video) than by reading (documents). Complex concepts which are conveyed inside a written disclosure might be reinforced in a more engaging fashion using a few short videos delivered to a policyholder's inbox. The media accustomed to communicate insurance disclosures haven't changed in decades, but consumer behavior certainly has. It's the perfect time for insurers to bring disclosures into the Twenty-first century and leverage digital communication avenues that a lot of other industries are using to great effect.
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If insurance providers want to strengthen their customer relationships and instill greater trust in their industry, they have to move beyond regulator-mandated disclosure. In the end, just because something is legal, doesn't make it right for your customer.
The secret is to talk with consumers inside a clear and forthright way – and disclosures, if properly constructed, can help advance that create.
It's an underlying cause that insurance agencies should vigorously embrace because, when companies contact clarity, they give an unmistakable signal to consumers. It is a signal that you are advocating for them, that you're helping them avoid unpleasant surprises – whether it is by means of uncovered losses, unexpected fees or the zombie-induced fall of organized civilization.
And in the insurance business, that's the type of advocacy which makes for a great, trustworthy customer experience.
