With insurance being the latest industry to be enriched by technology-driven investment, there are risks arising. There's a risk that technology will be used for the sake of it. There's a risk that technology will lead to even more complexity. And there's a risk that technology will result in overwhelming uniformity, changing the dynamics of competition.

Design can provide the answer. To make sense of this, it's essential to look beyond any misconceptions that design is just about making stuff look good. The fundamental reason why design is such a powerful tool is the emphasis that's placed on people – whether that's your customers, employees, or the rest of society. In this chapter, we'll look at three ways design can be used to create products and services that users love, and your competitors hate.

Design as a Problem Solver

Focusing purely on how technology can be used to create a new service is the first step on a journey to creating a service that nobody wants.

Following a design-led approach overcomes this by thinking about the user and their needs first, not some cool new technology. The first stage of any product development process should be figuring out the problem you're going to solve. This should involve talking to your users to understand their behaviour and feelings throughout their insurance journey. By mapping this out, you can begin to understand the highs and lows of your user's experience. And, importantly, you'll see opportunities to create new services that will improve their overall experience. You may observe that your users feel that the process of making a claim on their insurance is time-consuming and complicated. From this, you can start creating a service that solves this problem. By starting with identifying the problem your technology will be solving, you reduce the risk of spending 12 months working on your fancy “robo-advisor-chatbot-assistant-driven-by-artificial-intelligence” customer engagement platform, then releasing it into the market to find out nobody wants it.

This is not to say that a relentless focus on the needs of your users should be at the detriment to your business. Once you've found a problem worth solving, and a solution that solves it, you can work with other areas of the business to ensure a service that makes commercial sense. The key is finding the balance between a service that's desirable for the user, will make money for the business, and is technically feasible.

Design to Differentiate

We live in a world of abundance. Markets are more competitive than ever. And with the decreasing cost of technology and the free access to information, the market barriers to entry are lower than we've seen for a long time. Now, students graduating from university can start their own InsurTech business. We have moved on from a time where a lack of information, and a lack of choice, meant that adequately functional products, at a reasonable price, were enough to attract customers. In this age of abundance, appealing only to rational, logical, and functional needs is insufficient. To differentiate your offering in this overstocked marketplace, you need to create a beautiful and delightful experience that elicits an emotional connection with your customers.

Now, that sounds rather fancy and complicated. But one way to achieve this is by following some principles of good design. Design can be used as a tool to solve complexity, delivering the simplest experience to your customers. Striving for simplicity may sound a bit straightforward if you're aiming to create a magical experience and achieve differentiation from competitors, but it has long been a fundamental principle underlying some of the most successful products, services, and businesses in the world. Consider the phone, computer, or maybe even the watch you use. If it has the infamous Apple logo, you're experiencing this principle in action. When Steve Jobs returned to save Apple in 1997, one of his guiding principles was “simplicity is the ultimate form of sophistication”. And it's Apple's relentless focus on staying true to this principle that has contributed to them becoming one of the most successful businesses ever, creating products and services loved by millions across the world.

With complexity rife in the insurance industry, making things simple is more powerful than ever. Insurance is complicated. Customers find it hard to compare policies, they struggle to understand what they're covered for, and making claims is painful. Beyond a poor experience for the customer, this complication can fuel distrust. If a customer doesn't understand the four policy documents they've been gifted, how can they trust their insurer to have them covered at a time of need?

A great place to start simplifying your experience is by rethinking the way you communicate and present information. Firstly, you'll need to rethink how you talk to your customers. Imagine you were describing something to a friend in the pub; that is the type of language you should be using. Cutting out the jargon and overly complicated words that most of your customers won't understand. A great way to give your brand personality through your tone of voice is by thinking of a person in real life that you feel embodies your brand. It might be a trusted friend, a caring family member, or an authoritative colleague. Think about the characteristics of this person, and ensure these are influential in all communications that come from your business. The result is a friendly, human-like connection with your brand and an element of simplicity that cuts through the complexity of the industry. A second way to solve complexity is in how you present information. In an era of disappearing images, and 280-character tweets, your average customer doesn't have the time or inclination to focus long enough to work out what all of this insurance stuff means. By simplifying the key information a customer really needs to know into a visual summary, customers are more likely to understand what you're providing them with and believe you have their best interests at heart.

With the issue of complexity common across the entire insurance industry, it will be the insurers who are able to overcome this issue that will take the first step towards differentiation. Riding a wave of attention, and with US$60 million backing,¹ the US insurer Lemonade is proving how a focus on simplicity and transparency can provide clear differentiation in the market. Their communication style is fun and light-hearted. Their business model is simple and displayed proudly on their website for all to see. And the experience they provide is quick and enjoyable, meaning you can be covered in 90 seconds, or complete a claim in three minutes. It will be the industry players who are able to adopt these key design principles and put them into action who will achieve sustainable differentiation from competitors.

Simplicity is one example of a design principle that can differentiate your service in the market. There are plenty of others to explore, from practicality and functionality to elegance and honesty. The key is identifying the principles that will have the biggest impact on your service and working with talented designers to execute them.

Design Beyond the Design Department

From this chapter, it should be clear that the value of design goes beyond making stuff look good. Design is a tool for problem-solving, and a tool for achieving sustainable differentiation. But to realize these benefits, a mindset change is key. Taking design out of the design department doesn't mean placing designers within your finance and compliance teams; it's about changing the way all employees approach and solve problems. The key is to place the customer at the centre of everything you do, making sure the solutions you're coming up with are not just solving a business need, but solving a user's need. Because without the user, there will be no business.

Changing the behaviour of everyone within an organization is a big challenge. Airbnb has a great approach for promoting this “design way of thinking” throughout their organization. In every team, the project manager has the role of representing the customer.² This ensures that every discussion considers the impact on the customer, and every solution delivers value to them. If design is to have a positive impact on your organization, you need to make a change and run with it. Whether that's ensuring the “voice of the customer” is heard within your team, or you run “design thinking” training with your team, the best response is action.

So, to Conclude

If you're to build a successful InsurTech business, technology alone is not enough. If you want to create products and services that customers love, and are differentiated from competitors, design is a tool to help. So, remember: place the user's needs at the centre of the problem you're solving, follow design principles to create an experience with a sustainable competitive advantage, and create a culture where a design approach is valued throughout your organization.