In insurance coverage, LANGUAGE is a instrument for differentiation. Coverage language could make one insurer stand out from the following. I perceive that. In reality, that’s what I attempt to do each single day – make my articles stand out (via my selection of language) from the following.
What I don’t perceive is the trade’s insistence on utilizing completely different phrases to confer with the identical factor. Too usually, insurance coverage professionals are informed (I imagine by their authorized departments) to make use of particular language and toe the occasion line. How these corporations got here up with these phrases is (I imagine) subjective – and that’s actually not what we want in a fancy trade like insurance coverage.
The time period ‘HARD MARKET’ is an ideal instance of this.
The Worldwide Threat Administration and Insurance coverage society (IRMI) defines a tough market as: “The upswing in a market cycle, when premiums enhance and capability for many kinds of insurance coverage decreases. This may be brought on by plenty of components, together with falling funding returns for insurers, will increase in frequency or severity of losses, and regulatory intervention deemed to be towards the pursuits of insurers.”
Some insurance coverage professionals are adamant that the industrial insurance coverage market has been ‘HARD’ for the previous two years. Nevertheless, some are avoiding the phrase ‘HARD’, as an alternative choosing ‘TIGHT’ and even ‘FIRM’.
What’s the distinction? Why the language differentiation? How can the trade justify utilizing completely different phrases to explain the identical market? Just about all industrial insurers have felt the situations specified by the IRMI’s definition of a tough market. So, why beat across the bush? Name the market what it’s.
To fulfill my nerdy language intrigue, I made a decision to search for Collins Dictionary definitions of the three phrases ‘HARD’, ‘TIGHT’, and ‘FIRM’:
HARD (adj): One thing that’s arduous could be very troublesome to do or take care of.
Synonyms: troublesome, concerned, advanced, difficult
TIGHT (adj): Tight controls or guidelines are very strict.
Synonyms: strict, stringent, extreme, powerful
FIRM (adj): If a value, worth, or forex is agency, it isn’t lowering in worth or quantity.
Synonyms: hardness, resistance, density, rigidity
What involves thoughts is the phrase: ‘Similar, similar, however completely different’. Every phrase has a special which means, however the overarching themes are ‘CHALLENGING’, ‘STRICT’, ‘COMPEX’, and ‘RIGID’, that are additionally phrases used to explain the industrial insurance coverage market in recent times.
To complicate issues, some corporations choose to not use any of the above phrases, they usually choose to make use of the time period ‘TRANSITIONING MARKET’ – referring to the corrective actions and adjustments the market is making in response to the situations described within the IRMI’s definition of a tough market.
I’ve a novel perception into this linguistic battleground. I interview all kinds of corporations within the trade, from insurers to brokers and companies, MGA/MGUs, reinsurers, insurtechs, regulation corporations, and consultancies – they usually all have their ‘most popular’ phrases, which I then need to relay (particularly when quoting). However once more, these are completely different phrases for a similar factor.
The newest phrase dispute I’ve observed revolves across the altering market situations. By means of 2022, the industrial insurance coverage market has improved throughout many traces (with a couple of exceptions, like cyber insurance coverage). To explain this, some insurers are utilizing the phrase ‘MODERATING’, whereas others are utilizing ‘STABILIZING’. Once more, not a whole lot of distinction there.
Why can’t the insurers simply choose one time period and roll with it? I’m positive that extra readability and consistency would go down properly with brokers and brokers – who’re presently having to demystify insurers’ language with shoppers. Additionally, I believe it’s a protected wager that shoppers don’t care when you use ‘HARD’, ‘TIGHT’ or ‘FIRM’. They simply wish to perceive why their premiums have gone up or why their protection has modified – they usually need that clarification in plain, simple language.
In making an attempt to distinguish themselves via phrases, insurers are (maybe inadvertently) additional complicating this already advanced trade. Get actual everybody. Whether or not you say ‘TOMAYTO’ or ‘TOMAHTO’ – it’s nonetheless merely TOMATO.