also, one hopes, for clients everywhere. Service design is a collaborative activity; everyone involved can benefit from the skills and insights in the pages that follow.
—John Thackara
Marseilles, France, October 2012
Author, In the Bubble: Designing in a Complex World
CHAPTER 1
Insurance Is a Service, Not a Product
Putting Insights into Practice
Experience Prototyping the Service
Insurance rarely comes to mind as an industry that provides a rewarding customer experience. The only time people find out whether their insurance company is actually any good is when they are at their most distressed and vulnerable. When they find out their insurance is awful, there is nothing they can do about it. They are at the mercy of small print they either did not read or did not understand, and they may end up spending hours on the telephone or filling out more paperwork. There should be insurance against mistreatment by insurance companies.
For many insurance companies and the people working for them, the lofty goal is to be the least awful with the minimum effort possible. The insurance market has ended up in a race to the bottom, competing only on price because customers do not understand their complex policies, hence the proliferation of insurance price-comparison websites.
Part of the problem is that insurance is complicated, involves multiple stakeholders and channels, and is a classic example of a service that is often sold as a product. The mix of complexity, human experience, multiple stakeholders, and delivery channels, combined with customer dissatisfaction with an industry stuck in its ways, makes insurance a perfect candidate for disruptive service design.
In 2009, Norway’s largest general insurer, Gjensidige (pronounced yen-SEE-dig-ah), decided they had had enough of competing in this toxic marketplace on the same level as their competitors. As a financial group with a 150-year history, Gjensidige had a solid position in the market, but they had a strong drive to improve the quality of service they were offering their customers. CEO Helge Leiro Baastad decided that customer orientation should be a main strategic focus and a key competitive advantage for the firm.
A major challenge was a structural one. Gjensidige was organized as a chain of activities from product development to sales, with expert staff working in silos. This industrial model made it difficult to orient the silos to work together to deliver a unified experience to customers. Because Baastad wanted the change to be driven from the heart of the business, he asked marketing director Hans Hanevold and brand director Kim Wikan Barth to leave their jobs for two years to run a company-wide change program called “Extreme Customer Orientation.” Both Hanevold and Barth had long track records with the company, enjoyed the respect of their colleagues, and knew how to engage the organization.
Hanevold and Barth began by identifying change agents in every business unit within the company. The underlying principle was that customer orientation should be grown from the inside out rather than being driven by outside consultants, and that the activities should be funded by the business units themselves. To support these activities, they created a company-wide training program, then set about identifying what ultimately amounted to 183 concrete actions to improve customer experience. For some projects, the business units required specialist expertise to fulfil their ambitions, and service designers were hired to help design a better service experience.
Gjensidige embraced service design as a way to help bridge the gaps across the silos and develop their services in more customer-oriented ways. Service design methods helped them create a complete and shared picture of what really provides value to the customer, as well as processes to join up the experiences.
As a lead-up to their change program, Gjensidige employed service designers to challenge their thinking about what the ideal insurance service would look like. The initial task was very broad—Gjensidige wanted to find out about people’s behaviors, motivations, and relationships to insurance. It was important, however, not only to understand the mindset of Gjensidige’s customers, but also of staff.
The actuaries—the mathematicians and financial wizards who come up with the complex “products” on which insurance is based—belonged to the Product Group. The name of this department was a clue to the shift that was required in the company’s internal culture. What the company is really selling is a service. Customers cannot hold insurance in their hands, and their experience of their insurance policy is made up of the service interactions they have with the company. When customers buy a physical product, they can inspect it for build quality, flaws, or damage. It is much harder to do that with services, especially ones that are essentially a contract based on the chance of a future event, such as insurance. Many people buying insurance do not really know what they are buying, and only find out what is covered at the worst possible moment—when disaster strikes. This is not the time to begin haggling over contract details.
Consumer Insights
The approach taken in the Gjensidige project is an example of classic service design—insights research, workshops, service blueprinting, service proposition development, concept sketches and presentations, experience prototyping, testing, and delivery. A fairly small sample of users was involved in the research, but the research went deep. The design team visited and spoke to three people working in Gjensidige’s call centers and offices, as well as six customers, to look at both the delivery side and the recipient side of the service. To people used to working with larger data samples, nine people might not sound like enough, but Gjensidige already had a great deal of quantitative information. This information didn’t have the detail of the qualitative research needed for an innovation project, however. Quantitative methods are good for creating knowledge and understanding the field, but they are not very useful for translating knowledge into action and helping organizations do something with it. Qualitative studies are very good at bridging this gap.
Five different areas were researched with the participants: insurance in general, social aspects, choices, contact, and tools for staff. What Gjensidige and the service design team discovered were some important differences between what people say and what they do. Some of the insights that were uncovered are described below. Many are questions and needs, and one can see how this kind of research immediately gets the problem-solving juices flowing.
Trust
Insurance is built on trust. When customers pay their premiums, they trust that they will get value for money—and that the insurance company will still exist when they need it. But trust is very fragile. It takes some time to build up and is quickly broken. All the small glitches in delivery—letters sent to the wrong address, billing errors, problems with communication, customers having to repeat details multiple times—damage people’s trust in an insurance
