Are You Taking Insurance UX Seriously Enough?

New Novarica report presents a best practices checklist and advises insurers to apply the concept of ease-of-doing-business more broadly, to include customers and internal personnel.

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Insurers have been pursuing “customer-centricity” for the last two decades but they may need to update their understanding of what that means, suggests a new report by Novarica, “Best Practices in User Experience.” User experience (UX) is a cornerstone of customer experience (CX), but few insurers have mature UX organizations and disciplines, according to the report’s authors Chuck Ruzicka, VP of Research and Consulting, and Tse Wei Lim, Marketing Director.

Chuck Ruzicka, VP, Research & Consulting, Novarica.

Chuck Ruzicka, VP, Research & Consulting, Novarica.

Insurers have made strides in improving CX and UX, notably by modernization of core systems, the Novarica report says. But the goals of those initiatives don’t necessarily go far enough to meet emerging digital expectations of new generations of customers.

“‘Ease of doing business’ has long been a watchword in the insurance industry, but means something different than it used to,” the report asserts. “Where it once meant the carrier responding quickly to faxes from agents, the spread of new technology and the rise of direct sales in personal and small commercial lines means that insurers now ‘do business’ with each and every one of their policyholders.”

Among the items on the checklist are the following:

Make UX Part of a Broader Customer Experience Strategy: The authors caution against detaching considerations of UX from the broader context of customer experience. UX, in their view, is a subcategory, and one that must be managed in harmony with the larger objective.

Focus on Building Awareness and Culture: Building a good user interface (UI) is a specific job, but being in a habit of building an excellent UX requires the development of company culture dedicated to that goal. Applying UX as an afterthought is “putting lipstick on a pig,” the authors imply. They urge iteration and early integration and suggest co-locating UX, IT and marketing teams.

Make a Plan for Tracking Impact: Like many innovation-related initiatives, UX efforts may be embarked upon under pressure from anxious senior leaders, but without sufficient attention to the concrete outcome. “Results tracking is the Achilles’ heel of every UX practice, even the most developed ones,” the authors warn. “Most insurers will track the results of their UX work only in the most ad hoc ways—if they do it at all. Infrequent user satisfaction surveys or ad hoc feedback is of little use when it comes time to make a case for UX investment or prioritizing projects.”

Other ways of adding discipline to a carriers UX efforts include plans to pilot, test and iterate; to select external partners with care; and to plan UX governance.

Internal UX Matters Too

Insurers should also understand that UX isn’t just for agents and policyholders. “With Millennials joining the workforce, intuitive and easy-to-navigate workflows are important for employee satisfaction and retention,” the authors advise. “UX resources are most often assigned to externally facing applications first.”

The authors insist that the choice insurers face is between embracing CX as a means of strategic advantage, or viewing these investments merely as a cost center—the way IT was once viewed. They recommend that insurers learn lessons from startups as to the impact of UX on achieving traction in a given market. The setbacks that startups have faced in the industry were related to the complexities of insurance regulation rather than the rejection of better UX by consumers and other stakeholders. “No one has said, ‘That’s great, now we can go back to having a terrible, inefficient experience,’” the authors write.

“For now, at least, it easier for insurers to learn to build a modern user experience more than it is for new entrants to learn the ins and outs of the industry,” the authors add. “In much the same way that external market shifts made it a necessity for insurers to focus on technology over the last two decades, shifting customer expectations are making it a necessity to focus on user experience now. The demand exists, and if insurers ignore it, others will step in to fill the gap.”

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Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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