How We Redesigned Supplemental Health Insurance

Traditional insurance product design starts with a problem: not hitting sales targets, claims are too high relative to premium, claims are too expensive to process, etc. Then what happens?  

The product team brainstorms new ways to configure their existing products to solve the problem, or maybe add a new rider. There might be a broker round-table to listen to feedback from the field and brainstorm together on a solution. The marketing team might give a "voice of the consumer" presentation. Once a solution is identified, the product is developed, filed in 50 states, given a good marketing launch, and set free in the world with high hopes of stellar sales.  

Then what? Usually, the market reaction is less enthusiastic than hoped, but some positive comments come in from a few brokers and insurance leaders pat themselves on the back that they've done great work. Sales come in, and—if they've projected well—they are on target.  Sometimes they're above expectations, and then the claims team and risk management gets worried. Sometimes the market doesn't care at all about this “cool new product innovation.”

Why is this the way we "innovate" on product in the insurance industry?  

At Ansel, we take a different approach, using a process called "human-centered design."  Instead of focusing on a business problem, we focus on the problems in the daily lives of our customers. By focusing our solutions on them, we build better products that resonate throughout the value chain. Solving real problems is powerful!

So how do we do this?  We are relentlessly focused on three things:

1) We listen to people.  

The biggest thing I've learned from making the switch to human-centered design is the importance of listening without problem-solving. When a good interviewer or focus-group leader is talking to a research subject, they encourage the participant to talk. They ask open-ended questions, and leave pauses when the subject has finished their initial thoughts...often they continue after a short break and deliver deep insights.  

Even after our initial research is done, our everyday interactions with members, employers, brokers, and providers, are an opportunity to listen with curiosity and try to deeply understand the experience of others in our community. That means we have to resist our initial impulse to solve the first problem they mention, mental wheels whirring as soon as we think we have a solution. Set that aside and just listen, allowing someone to share their experience. You might find their first complaint was only symptomatic of a much larger problem. Human-centered design helps you get to the root issue.

2) We look for qualitative patterns.  

As an actuary, I'm primed to find patterns in numbers. We look for trends, and use those trends to project results. The unstructured data we get from listening isn't easily put into spreadsheets or summarized in averages and standard deviations...but that doesn't mean we can't recognize patterns. Using the tools of qualitative analysis, we can draw out insights from interviews and focus groups that are different from anything we could have found by analyzing numbers.

Just as there are experts in quantitative analysis (actuaries, CPA’s, and investment analysts, to name a few), there are also experts in qualitative analysis. Our data is valuable, and analyzing it thoroughly is important if you want to make the right decisions in moving your business forward.  You wouldn’t decide to buy a house just based on its price, age, and square footage (quantitative measures)—you also consider things like location, curb appeal, and accessibility (qualitative measures). Similarly, if you’re only paying attention to quantitative data analysis, you’re likely ignoring important facets of your business that can’t be put on a spreadsheet but have a big impact on results.

3) We think broadly about solutions.  

Insurance is a great tool to help households manage risk. At Ansel, we're focused on solving the problem of sudden, unexpected financial shocks due to medical events. Supplemental insurance is the perfect tool to address that specific problem. However, because we put people first, our next solution may be a savings product, or a credit product, or a consumer education product. Our job is to find the right solutions to address the problems of our members.

There are often practical considerations to delivering a solution that’s outside your company’s core mandate. An insurance company produces and sells insurance—there is some scope to create supplemental educational materials, but there isn’t a lot of flexibility to deliver solutions in other verticals. A new subsidiary could be started to test new non-insurance solutions, or partner and co-market another company’s product to deliver those solutions.

To wrap up

At Ansel, we believe that when we are relentlessly focused on delivering value to our customers, we build value in our company. This approach is what led us to completely redesign a supplemental health product that can address the gap in coverage that’s been created over the past decade by rising health insurance deductibles. Who knows where human-centered design could lead your team? To learn more about human-centered design for employee benefits, I recommend listening to this interview with product design consultant, Carolyn McMahon. You can also check out IDEO’s human-centered design kit to try it for yourself.