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June, 2024

Unraveling the Complexity of Insurance with Customer-Centric Design

INTRODUCTION

The insurance industry is in the middle of a profound digital transformation. Innovative new companies such as Lemonade have disrupted the way insurance companies used to work. The digital insurance market is currently growing rapidly.

Current Scenario and Pain-points

The number of people using digital insurance plans has doubled in the past five years, and it’s expected to grow even further in the next five years. On the flip side, due to digitization of the insurance sector, the human touch is being replaced by the digital interface, and establishing trust among users has become a major challenge as it is a key component of a good user experience especially in the insurance sector. To overcome this challenge, it’s imperative to have the right trust markers in place. 
When users do not trust an insurer’s website, they are quick to switch to an insurer that has relevant trust markers and a better digital user experience.

According to the Capgemini and Efma research report, “policyholders no longer waver when it comes to dropping a provider in pursuit of solution providers with better digital user experience”.

PAIN-POINTS

There are various pain points associated with the Insurtech sector given the complexity of their products and offerings. 

Pain points such as: 

  • Legalese and jargon lead to an increase in intellectual load.
  • Lack of tailored, personalised recommendations
  • Tedious self-servicing, including claims management and policy surrender.
  • Lack of advice and communication regarding policy-related queries demotivates the user.
  • Lack of transparency and visibility in procedures affect the credibility of the organization.
  • Organization-centric Information Architecture and Navigation do not match the user’s mental model.
  • Lack of human touch negatively impacts engagement and user trust.
  • Complicated forms confuse the users and reduce engagement

Possible Solutions

  • Turn complex and cumbersome journeys into simple but informative experiences – Provide a simple information architecture and reduce the cognitive load, avoiding users from being overwhelmed with information but at the same time, ensuring they can expand the information if they need to dig deeper to understand the product to its core.
  • Nudge users to make well-informed choices – Providing transparent and clear information regarding the most crucial information such as what is covered and not covered, dispute resolution, etc that the user needs to make an informed choice.
  • Generate trust and transparency – By providing relevant information regarding crucial processes and information such as claim management, setting the right expectations, explaining why certain questions are asked and how it impacts pricing, what the company does with this private personal data, etc…
  • Keeping the choices minimum – By chunking information, showing only relevant information at a time to reduce cognitive load.
  • Prompt advice – To help users with their queries at any point in time because users are going to need some level of guidance and reassurance during the purchase process for something as complex and important as insurance.
  • Promoting user control – Users need to feel in control of their purchasing and decision-making process. We can promote that by giving them the freedom to choose what they want to do to ensure that they are getting good coverage at an acceptable price.

Case Study

Lemonade offers renters/homeowner’s insurance. It uses A.I and chat-bots to handle claims and offer personalised policies. No bureaucracies or insurance brokers, just a desktop and a mobile interface. 
The Lemonade website is extremely intuitive and easy to use and it’s designed by keeping the users front and center, following UX design best practices and a simple interface.

Let’s see how they achieved it:

  • Using a conversational tone –  helps in more conversions.
  • Using easy-to-understand UX copy –  reduces the cognitive load and increases engagement and retention.
  • Smooth and conversational onboarding – The onboarding process is as seamless as a continuous conversation and each screen answers a question that complements the previous.
  • Humanising digital experience – Adding a virtual assistant Maya, makes users feel like they are talking to an actual human being and helps build the user’s trust.
  • Provides relevant information – In every instance, only the content you need at the moment is presented to you and that significantly reduces information overload.
  • Builds certainty and promotes making informed choices– By giving users all the information they need to make choices.

our perspective

The insurance industry is in the process of transitioning to digitalization, but in general, is not fast enough as its traditional system complexity needs to go through a thoughtful shift.
To bring that thoughtful shift, there are 3 best design practices that Insurtech can apply to improve their digital customer experience.

  • Integrate digital and human interaction – Even though consumers prefer digital transactions, they need to be sure that a natural person will be there for them when necessary and will understand their goals, desires, and frustrations.
  • Personalised user experience – The experience should be as personal to the user as possible based on the complex set of products offered by the insurer and the consumers’ different needs and circumstances.
  • Design with empathy – Designing with the consumer at the centre requires empathy for what they are going through at a particular moment when they interact with the company.

Conclusion

From a customer perspective, insurance can be a complex industry, with a vast range of products and options. Following design best practices while putting consumers at the center, seamlessly integrating digital and human interactions, personalising products to their circumstances, and treating them with empathy, companies can earn customers’ trust and loyalty. 

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