Be bold and think out of the box
Although it may seem bizarre to some, design thinking is vital for the South African insurance industry.
Insurance as we know it is changing; consumers are more connected and tech savvy. They are demanding more flexible products to suit not only their pockets, but also their own unique individual requirements. Gone are the days of developing products for mass appeal. Future insurers need to be forward thinking, developing more flexible products to drive competitiveness and to retain a loyal customer base.
Get out the drawing board
Design thinking is an extremely attractive approach as it entails a core focus on the needs of the consumer, designing products that precisely appeal to their specific requirements. This concept then guides the process of product and service creation.
It embraces a consumer centric thought process whereby product design and delivery is driven by core consumer needs and requirements rather than pure mass appeal. Through this applied thinking, insurers have the ability to push products and services into the market that have the potential to garner a favourable reaction.
But the focus is not only on having attractive offerings. Design thinking also encompasses extending further services, an experience and ecosystem around products and services.
Changing thinking
Historically, consumers have always viewed insurance as a grudge purchase. This is due to the limited opportunity for customisation or lack of flexibility. Applying design thinking to insurance has the potential to create offerings that are solutions-based and provide value that is tangible and economically justifiable to the consumer.
As a result, consumers are forced to think critically about their unique risks and how they want these risks addressed. In doing so, they seek and identify industry cover that addresses their risks.
If the local insurance industry is able to be flexible in order to meet consumer needs, we could see a big change in the industry’s mindset.
However, very rarely do local consumers have the ability to discern insurance products and services that meet their own needs. Rather, they measure insurance offerings based purely on price. Because of this, local industry finds itself in a precarious situation, where their only option to stimulate growth is to decrease premiums.
But introducing design thinking in the development of insurance offerings has the potential to change how consumers think.
Effective thinking is key
For it to be effective, the industry would need to be equipped to design and produce niche insurance products; this is the true challenge. Product offerings need to remain relevant over time whilst still providing adequate returns. But to start changing consumers’ minds, the industry needs to be closely aligned to products that are game changers.
Customisation plays an important role here. For example, you have a regular Uber user who may not have comprehensive vehicle insurance, but they can insure themselves through a pay-per-drive system. This type of insurance is flexible and adaptable to the client’s specific needs.
Breaking bounderies
This same principle is applicable to property insurance, as with rental websites like Airbnb. Comprehensive insurance could be tailored depending on when a property is occupied or unoccupied.
A client needs to be able to address risks pertinent to them, without which design thinking will not be successfully implemented. Clients require peace of mind when engaging with the insurance industry, knowing that their specific needs are met. They need to be comfortable that the premiums they are paying are fair and address their risks adequately.
The overall effect will be a more positive customer journey, resulting in the spread of positive news. This would lead to a change in industry thinking affecting the development of local insurance offerings.
No longer would purchasing insurance be seen as a grudge purchase by consumers. Design thinking is an entry point into an untapped market that is either self-insured or uninsured.
