The Importance of UX for Digital Insurances
How UX design teams can contribute insurance business to succeed
The need to protect is a basic human instinct. But even though we can admit insurances are essential, most users don’t want to pay for something they might never use nor see an immediate benefit but a cost.
Digital insurance is a rapidly growing market. 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. It allows end-customers to interact with insurers without having to visit a physical location, enables them to access information in real-time, and stay up-to-date on their policies.
But how can insurers make sure they’re not missing out on these opportunities? How do they ensure that their customers are getting the best experience possible? And what does UX have to do with all this?
Current problems of the digital insurance industry
Insurance complexity: Finance and insurance industry is often complex, involving a lot of steps in the customer journey, and having traditionally used complex jargon. Already overwhelmed customers will not be happy if they must go through a complex and long digital experience.
Customers lack trust in insurance: It is important to consider the relationship between both, users, and insurance, starting from a lack of trust point. Insurers ask users many questions as they assume users will lie and exaggerate their answers to get a better price. And on the other hand, users do not trust the insurance because they perceive insurances want to trick them and use the information they provided against them to not pay out their premium. A report from the IBM Institute of Business Value (IBV) revealed, 42% of customers don’t fully trust their insurer.
Slow phase in their digital transformation: Digitalisation has led to a complete change in the way customers behave, search and share information about companies, brands, and services. The insurance industry is in this transformation process, but in general, is not fast enough as its traditional system complexity needs to go through a thoughtful shift of its core business model and classic operating models.
Based on Capgemini and Efma’s research, “policyholders no longer waver when it comes to dropping a provider in pursuit of more relevant customer friendly solutions providers. For the first time, 50% of customers today are willing to consider coverage from a new age player”. Users are starting to switch insurance more easily, based on price, convenience, advice, and reachability.
Insurance customers not only compare their experiences within other digital insurances but with experiences with any other digital products. Nearly 80% of the customers surveyed during the World InsurTech Report 2021 said they would switch carriers if their insurers’ responsiveness were less than stellar.
How can UX help insurtech companies to succeed?
Solid UXR to understand customers’ needs: Customers usually interact with insurance when they experience mostly negative emotions such as insecurity and fear of loss when they buy insurance or anxiety, sadness, and stress when they must report an incident.
This abstract nature of insurance remark the necessity of understanding what triggers users to buy insurance or go through a digital claim process; under which situations, environments, and emotions are the users going through the different journeys; so, we can provide a platform and service that ensures users feel protected and safe.
Turn complex and cumbersome journeys into simple but informative experiences: Through multiple research methods, designers can uncover friction, pain points, and opportunities to enhance users’ digital experience. A UX team can use diverse sources of data to simplify steps in the journey, provide a simple information architecture reducing 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.
As designers we understand the importance of personal data and optimise our forms and steps to ensure we collect only the required information, avoiding complex and repetitive forms and providing support to help providing the correct information and ensure the correct use of their personal data.
UX designers working in insurance products find themselves negotiating with underwriters the volume of data they can get and advocating for the most optimal user experience trying to reduce the questions to a minimum. Integration with third parties and data providers can be a solution but external parties can also bring unexpected friction and technical limitations.
Generate trust and nudge users to make well-informed choices: Businesses need to understand the importance of building trust across different touchpoints in the insurance value chain. To solve the trust issue insurance has, UX designers need to focus on transparency and provide clear information about what is covered and not covered, setting the right expectations, but also explaining why certain questions are asked and how it impacts pricing and what the company does with this private personal data.
It is in the claim handling process where insurances can prove their lifetime value and earn customers' trust and loyalty. The user experience needs to be understood holistically and insurances need to provide an optimal digital experience but also an outstanding service to win their trust.
Understanding the insurance digital experience holistically
As Birgit Mager defines, Service Design helps to ensure service interfaces are useful, usable, and desirable from the client’s point of view and effective, efficient, and distinctive from the supplier’s point of view.
What ultimately customers expect from their insurers is not a good product, offer, or coverage, it’s a service that will help them to overcome a problem when an incident occurs. UX design team can have a bigger impact if besides working on front-end journeys, we also understand and develop the environment, processes, and tools insurances companies use internally to provide a service to their customers.
Let’s analyse some of the different touchpoints and how UX designers can contribute to them:
Landing Pages: These pages are focused on giving the users a first impression of the business’s products and services. Due to the nature of insurance and considering that users will be hoping not to have an incident and not to need to use the insurance or make a claim. Insurances needs to make a bigger effort to set expectations for the smoothness and effortless process when difficulty comes.
Through interviews with users in different markets and countries, UX teams can identify the key elements users need to consult before deciding to jump into the sales journey.
Sales journey: Through data analysis and usability testing, designers analyse the main frictions and pain points. Based on my personal experience, the most important points are the following:
- Risk and Underwriting questionaries: It’s important to provide enough information to users about the reasons that information is being collected, provide support on those questions where users might not be qualified to answer it, reduce to a minimum the number of questions, prefill and populate information, if possible, make use of progressive profiling to gradually collect data and simplify language avoiding complex insurance jargon. It’s not just about making sure users get the right information; it’s also about creating an experience that helps them to avoid mistakes that could lead to issues with their policies or coverage.
- Quote and coverage information: We need to ensure behavioral and psychology principles are taken into consideration to reduce the cognitive load, disclose information progressively and create different levels of information to ensure it can be digested easily and allow to get specific information if needed but not all at once. Users must understand how the price is calculated and how their selections and decisions impact it, so they have enough flexibility and information to make a wise decision.
- Easy access to help and support: Due to the complexity of insurance terminology, many users need some type of support when deciding the type of insurance and which options are better suited to their needs.
Self-Service / Customer portal: Once users have converted and got insured with an insurance company, users should be able to access, track and manage their policies and claims updates digitally. It might sound easy but editing and making changes in policies create complex mid-term adjustments that affect multiple areas and components. Designers need to ensure the information is displayed correctly across the different sections and that the users are well informed about the updates and how it affects the price and their policy in general.
Journey for end-customers to report a claim digitally: When an incident happens, users need to report their damages. Reporting claim journeys are usually taken by users when the damage is not urgent or requires assistance. Anyhow, the users that go through these journeys are worried and anxious, as they still don’t know if their claim will be paid out. The focus is on:
- Simple and quick journey: We understand the emotions of our customers and we want to make this process as easy as possible. To ensure this, we have the minimum number of steps possible, asking for just enough information to submit the claim, and populating information provided in the sales journey just to be reviewed by the customers.
- Easy access to support and help centre: In this situation is important to make clear under which situation and circumstances it is better to call instead of going through a digital journey. Anyhow, doubts can raise during the journey, and it should be easy for users to clarify those questions.
- Digital assets such as images or videos as proof of damage: Users should be able to enjoy the advantages of reporting a claim digitally in a frictionless way to prove their damages via pictures or video.
Claim reporting and claim handling platform (for claims handlers & customer support agents): This type of internal platform is used to register claims when end-users contact us via phone and to handle the claims once they have been registered by an internal claim or external agent or by the user digitally. The goal of the UX team should be to facilitate the claim-handling process by:
- Understanding how information is collected to uncover frictions and miscommunication between customer service agents, claim handlers, and end-customers.
- Make the claim registering process as efficient as possible to avoid long conversations and too many questions being asked by agents.
- Help claims handlers find information easily and allow them to focus on the most urgent claims.
By improving the claim handling process for claim handlers the satisfaction of end-customers is also increased, as their claims are solved faster and more efficiently. Collaborating closely with claims teams helps the UX team to understand the most common claims and issues and how sales journeys can be enhanced and adapted to customer needs.
Democratising information and building bridges between different stakeholders
This holistic knowledge from the user perspective that the UX team has needs to be shared with stakeholders. UX teams can help internal stakeholders:
- User Research insights and collaborative workshops can help stakeholders to empathize with the customer's needs, visualize ideas, or understand actions/changes needed and the priority they should have.
- Making sense of usage data, help them understand friction and collaborate to turn problems into solutions and opportunities.
- Facilitating agreement on solutions in workshops where many times all stakeholders get to see their product ideas visually represented and it is where most of the discussions and points of view need to be shared and considered.
Conclusion
The rise of digital insurance has opened up new opportunities for consumers, giving them better access to information and better protection. But we must remember that this revolution is not without its challenges. As we’ve seen above, there are many areas where UX design can play an important role in improving customer experience and retention rates across all types of insurance products.
The future of digital insurance looks bright and I’m excited to see what comes next and have a role in it.
The opinions and views in this article are my own and do not represent my current employer.
