This is the 1st in a 3-part series on the role of the consumer in the insurance industry.

When customers applied for life insurance in the past, most of the insurer’s focus during the application process was on their needs. What information they needed to collect, how they’d pass that information to the underwriters, and how to ensure its completeness. Sometimes little more than a digitized PDF, online applications served to collect needed data, and design wasn’t always a priority. Because of the way that carriers mostly applied analytical thinking, they were constantly being disrupted by customer values and changing trends which made operations quite heavy.  

All of that has been changing with the advent of InsurTech and the entrance of design thinking into the insurance marketplace.

« With design thinking, the product team seeks to understand the end-user and apply creative problem solving throughout the design process. »

Instead of presenting consumers with a rigid set of products, they take their cue from the consumer and respond to the consumer’s behavior. 

Platforms such as Breathe Life give insurers the agility to immediately respond and pivot to consumers. If applicants overwhelmingly drop out at a specific screen, or when asked complicated questions, the insurer can respond to this real-time feedback to improve their process. The data the platform collects informs product design.

It’s a holistic approach to selling insurance that looks at the whole package from the consumer’s perspective. End-to-end design thinks about every step of the life insurance journey and centers each of them on the consumer experience. Instead of forcing consumers through a process that works for the insurer, the insurer pivots to gather their information through a consumer-focused process. 

McKinsey recently published an article on the topic of design thinking and how it is transforming life insurance.

« In it, they talked about how today’s consumers don’t separate the experience of owning and buying a product from the product itself. »

What this means is that if they have a negative experience during the application process, they will view the product negatively.  When forming an opinion and making a purchase decision, they weigh the overall journey to purchase. 

If the process takes too long, if they’re frequently bumped out of the application, if they don’t understand the questions they’re being asked, all of this can cause them to take their business elsewhere even if you offer competitive premiums and a great product.

McKinsey stresses that design thinking and intuitive design isn’t just a pretty interface. It’s reinventing how consumers interact with the insurer at every stage. It’s responding to underlying consumer needs to spur innovation and shifting to an agile, team-oriented organization that can quickly flow that innovation through the life insurance cycle.

It’s an area where companies can carve out a competitive advantage and grab market share. In just its second year in business, insurance disruptor Lemonade wrote $57 million in renters and homeowners insurance premiums. Their streamlined application and claims process, and millennial appeal spurred amazing growth. Applying design thinking to the consumer experience of an insurance product can have a big pay-off.

It’s a lesson that life insurers are starting to learn for themselves. We’re seeing this happen by their openness to partner with an InsurTech like Breathe Life. We have made a strong commitment since the beginning to apply design thinking and to build a consumer-centric platform, and I’m very proud of what we’ve accomplished to date.  

In part 2 of this series, I will look at how the insurance industry’s relationship with consumers is changing.