Human-centred design in the insurance industry

Vol 46: Issue 4 | December 2023

Within one year of its launch in 2020, Singapore-based insurtech company bolttech achieved unicorn status. Series A funding of US$210 million — said to be the highest ever in this sector — lifted its valuation to over US$1 billion. Within two years, the company had a presence in more than 30 countries across the Asia Pacific, Europe and the Americas.

“The vision of bolttech is really quite simple — to connect people with more ways to protect the things they value,” the company’s chief customer and operations officer, Ryan Mascarenhas, told Forbes Magazine. “

In order to deliver this vision, we knew we had to rethink the way the insurance industry traditionally approached customer experience. And that meant developing a greater awareness of our customer needs, making customer journeys easy to navigate and making products and pricing easier to understand.”

Erik Mitisek, founder and president of insurance software company Highwing, agrees the customer experience must improve.

“Insurance is going through digital transformation. Both the driver and the end goal for this evolution is client experience,” he says.

“Clients demand faster, easier and more personalised service, and our industry needs to adapt to meet these demands.”Insurtechs and start-ups like bolttech are using two methodologies — design thinking and human-centred design — to position their customers at the heart of everything they do. 

YAS, for example, is a Hong Kong-headquartered insurtech that uses blockchain to create microinsurance policies for gadgets and activities such as hiking, biking, running and commuting. But why develop products for these very specific activities?

YAS head of Marketing and Partnership Samson Fong told Dr Joseph Wong, executive director of the Hong Kong Design Centre: “We spent a lot of time gathering data on current general insurance to see what most accidents are related to, and what the most common insurance claims are. That way, we could understand people’s needs first, before designing products to accommodate their needs.”

Advances in digital marketing and customer experience automation platforms are also empowering traditional insurers to apply design thinking and human-centred design.

The aim is to deliver one-on-one interactions that incorporate humanisation and hyper-personalisation.

“These digitised and humanised journeys are enabling customers to experience frictionless purchase, sign-up, onboarding and renewal journeys,” says Francoise Gelbard, co-founder and head of Business Development and Strategy at customer engagement platform HumanableCX.

“This can increase engagement and sales, reduce customer acquisition costs and churn, and reduce contact centre traffic.”

What are design thinking and human-centred design?

Some people use the terms ‘design thinking’ and ‘human-centred design’ interchangeably; some use one term to cover both. Broadly, design thinking implies a human-centred approach that places the user at the centre of the design process. And, while design thinking aims at widescale change and transformation, human-centred design is all about the details.

“Design thinking involves understanding the user’s needs, wants and behaviours through observation and research, then using that knowledge to create innovative solutions that meet those needs,” Venkatesh Ganapathy, associate professor at the Presidency Business School in Bangalore, told The Actuary India. 

For example, online pharmacy PillPack applied design thinking in the development of its prescription home-delivery system. By observing and empathising with the needs of people who take multiple medications, the team came up with a system that organises pills by date and time. In 2018, Amazon bought PillPack for a reported US$1 billion. 

Human-centered design comes into play once a product or service is in use, to ensure it keeps pace with customers’ evolving wants and needs. For example, Google Maps, launched in 2005 as a simple mapping tool, continually draws on user feedback. Features added in response include real-time traffic updates, street views and offline maps.

“Design thinking determines your direction when you work on something new,” says Marco D’Emilia, design manager at digital experience insights platform Hotjar. “Human-centered design fine-tunes the details through iteration after it is in the users’ hands.” 

How can this help insurers?

People abandoning an online search or items in their shopping cart is a challenge for all online retailers. Denmark’s Baymard Institute, which studies online user experience, puts the 2023 average global cart abandonment rate at more than 70 per cent. 

“In insurance, a big reason for the abandonment rate is that customers feel they’re being left to fend for themselves on websites,” says Gelbard. “This is the opposite of the face-to-face dynamic that the insurance industry was built on. 

“As insurance customer service becomes increasingly digitised, it’s critical that insurers can deliver highly personalised, real-time information and calls to action at moments that matter. This applies right through the customer lifecycle, from acquisition and onboarding to claims and retention. Get this right, and both insurers and customers win.”

General and life insurers are working towards this by partnering with enterprise customer experience (CX) automation platform providers who can help them use their customer data to create bespoke, interactive customer journeys.  

“Insurers can use these digitised and humanised solutions to educate new policyholders about the features and benefits of their cover,” says Gelbard.

“From there, they can continue to engage customers using interactive video to provide claim updates, reduce churn by explaining policy details and increase business by cross-selling opportunities. This level of personalised information can also reduce contact-centre traffic.” 

HumanableCX has worked to enhance customer engagement with general and life insurers, including AIA, Woolworths Insurance and nib.

“We have seen customer service centres reporting a 43 per cent reduction in failure demand calls — the calls customers make because the company has either failed to do something or failed do something correctly,” says Gelbard. “We have also seen customer satisfaction scores of over 90 per cent for our personalised claims management journeys in general insurance by following human-centred design principles.” 

Facing the challenges

Design thinking and human-centred design are powerful tools for generating innovative, customer-centric solutions. However, as Ganapathy points out, they can require organisations to rethink their approach to problem solving and challenge long-held assumptions.

“This can be difficult for organisations that are resistant to change or have a culture that values tradition and stability over innovation,” he says. 

That said, many insurers have a huge asset at their fingertips: extensive datasets of customer purchases, claims, queries and feedback. This data could yield some design-thinking gems — similar to the claims data that helped YAS develop its niche selection of microinsurance products. Or it might suggest human-centred design tweaks to make an existing product or process even better.

Cooper Cohen, a risk management and insurance advisor at the IMA Financial Group in Denver, Colorado, believes that prototyping can be particularly challenging for large insurance companies that are navigating rigid parameters, regulation and competition. 

“A good place to start would be to adopt a design-thinking strategy of finding, testing, using, learning and building at pace,” he wrote in an article published on the Insurance Nerds website. “This trains organisations to focus on minimising customer effort to maximise customer value.”

The Interaction Design Foundation: five phases of design thinking

1. Empathise: Research your users’ needs
2. Define: State your users’ needs and problems
3. Ideate: Challenge assumptions and create ideas
4. Prototype: Start to create solutions
5. Test: Try out your solutions

Design thinking vs human-centered design

Design thinking and human-centered design work together to improve the customer experience. 

Design thinking focuses on how user needs can be viably incorporated into product development, while human-centred design incorporates feedback throughout the development process and when the product or service is already in use, using iteration to fine-tune the design details. 

Both are concerned with empathy — understanding and responding to user needs — but, technically, the terms aren’t interchangeable.

To understand the difference, consider this real-life retail example. In the 1990s, dental healthcare giant Oral-B asked global design firm IDEO to create a new type of toothbrush for children — not just a smaller version of an adult toothbrush, but something distinctive.

IDEO actually watched children brushing their teeth and could see they were struggling to hold the narrow handles. So they applied design thinking to develop a children’s toothbrush with a big, soft grip that quickly became a bestseller. 

Human-centred design can be seen in the iterations that followed this industry-wide product change, including refined shapes and colours to make brushing more appealing to young children.

Personalised videos engage Woolworths Insurance customers

Many customers are feeling stressed and upset when they make a claim on their insurance. 

Woolworths Insurance was looking for a way to reassure them that their claim would be dealt with quickly and efficiently.

Typically, an insurer would provide information about the claims process in a physical letter or an email. However, people’s communication preferences have changed — they now watch an average of 17 hours of online video content per week.

Embracing this trend, HumanableCX created personalised claim update videos featuring a human presenter who provided the customer with: 

• A clear overview of their cover
• The next steps in the claims process
• What they needed to provide or do.

The videos were sent to customers via HumanableCX’s SMS and email platforms.

Follow-up rated customer satisfaction at 96 per cent for car insurance and 93 per cent for home insurance. In both cases, the click-through rate to the video was 80 per cent. Woolworths also noted a significant reduction in inbound calls, email enquiries and complaints.

“The end result was personalised messaging that hit the mark,” says a Woolworths spokesperson. “We are now exploring what’s next with HumanableCX, as we look to expand our personalised video offering to more customers.”

“Insurance is going through digital transformation. Both the driver and the end goal for this evolution is client experience,” says Erik Mitisek, co-founder and president of Highwing. 

“These digitised and humanised journeys are enabling customers to experience frictionless purchase, sign-up, onboarding and renewal journeys,” adds Francoise Gelbard, co-founder of HumanableCX.

“We have also seen customer satisfaction scores of over 90 per cent for our personalised claims management journeys in general insurance by following human-centred design principles.”

Read this article and all the other articles from the latest issue of the Journal e-magazine.

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