Recently we’ve been witnessing massive disruption in the insurance industry. Seeing the recent changes in regulations, the evolvement of innovative business models, thriving sharing economy and other advancements in enabling technology. These changes have enabled the rise in competition from other industry players who are also interested in providing services to various customers by leveraging on these new opportunities. Seeing companies like Lemonade (an Insurtech company), Safeshare (blockchain-based insurer) points you towards the trajectory in which the global insurance industry valued at $5 trillion (by SweissRe 2018) is headed.
Having pointed this out, there are still opportunities insurance companies can look into, in order to give themselves a distinct competitive advantage from other competitors.
In Nigeria however, the insurance industry is yet to fully leverage these new opportunities which will cause massive growth in terms of market reach and total revenue generated. With the total market penetration of life and general insurance in Nigeria at 1.5% based on a survey report by PWC in 2015. A major reason, for such a low amount in terms of market penetration for Nigeria, has been around the area of trust. The larger population of Nigeria, haven’t properly understood the industry and its promise, well enough to trust it.
Insurance companies who do well to clearly unravel the technicalities for people stand a great chance of increasing their market reach and industry dominance.
How then can insurance companies clearly pass the relevance of what they do to customers?
This is one question that has been in the heart of those at the helm of affairs within these insurance companies. Another major dilemma they are faced with is creating insurance products that will gain wide market acceptance. They are faced with this because experience has shown that sometimes great internal ideas don't necessarily mean wide market acceptance, after seeing loads of products that have been launched but have failed in the market.
There’s one way in which companies have been able to leverage for product success, that hasn’t really been adopted by many companies within the insurance industry. The potential of this technique is yet to be realised by a large majority. This technique adds to the already existing strategies used to guarantee how well a product performs in the market. This technique is called Design Research.
What is Design Research
Design Research, is a technique that combines concepts from Design Thinking with that of the traditional research methodology. Design Research is the base level technique used by teams all over the world as a foundation for developing a product, service or process that properly addresses the needs of potential customers/users.
You can read more about Design Research from our previous post here.
How your Insurance company can benefit from Design Research
Like I mentioned earlier, Design Research is used as the basis for developing a product, service or process. Now this is so because Design Research isn’t focused at capturing analytics but in capturing emotional drivers. Design Research to a large extent looks to understand people’s needs, behaviours and how they see things. By immersing into customers' daily routines, Design Researchers are able to gather data which doesn’t just end as data but is properly analysed into useful information that could be used to carry-out strategic design and development activities.
By breaking this data gotten from the field into useful information, it becomes easier to understand how best to approach customers with a solution. To help make this clearer, imagine the research team comes back with loads of reports, telling you what they discovered. The discussion doesn’t just end there, as is common practice with Design Researchers, what is discovered will further be analysed to explore what it means and how the gaps discovered can be met. So if Design Research was carried out on travelling, you won’t just get a report with analytical details like ‘50% of people love to travel’ but you get detailed information capturing their emotional drivers on why they love to travel and how best they feel they could be served when they travel. Information like this points you to so many opportunities you could leverage when building a product for your customer.
A lot of companies don’t understand the value Design Research can bring to them and this has made such companies miss out on major opportunities they could have leveraged on in reaching their overall expectations.
What this should mean to you.
As technology and other social factors continue to shape how people live and interact with one another. It is also very important that insurance companies, who offer services that help people reduce risk in many aspects of their lives, find ways to constantly evolve services to meet these people at their point of need. It is also very important to see what these people see as indispensable to help insurance companies find novel ways they could tie their offerings to those things. It is only when these things can properly be identified and leveraged as an enhancer for various insurance products that people can clearly see the value and buy into it.
Now seeing that these things can’t be clearly identified by Market Research, it is very important that Design Research be used to properly identify these needs and clearly translate into clear information the company can go forward with in developing new products/services for their target audience.
Insurance companies looking to lead their industry must be able to identify key customer drivers, to help them arrive at products that are specific to the needs of their target audience. As great as it is to use Market Research, it is very important for strategy, innovation and product teams to consider using Design Research to properly identify these unique needs faced by the market and how best they can service them with a solution.
I’ll love to hear how you have used Design Research in the past and how it benefited your team. If you haven’t used it before, you can reach out to us at [email protected] to see how we can help you with it on your next project.
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