applying living business to insurance · 2018-08-03 · applying living business to insurance mark...

APPLYING LIVING BUSINESS TO INSURANCEMark Curtis, Chief Client Officer, Fjord

Insurance MindsetsReflections on how people view the future and the systems put in place to protect it.

01 Old World vs. New World

02 Mindsets & Opportunities

03 Living Services

04 Living Business and Your Vital Signs

01 Old World vs. New World

Insurance Mindsets

5

Game of life

It wasn’t too long ago when your goals were fairly linear. You

go to college get a degree, this would pretty much ensure a job

when you got out. You start your career and change would be

infrequent. You get married, buy a house, settle down and have

some kids. Then 40+ years later retire after working at the same

place for years.

While not overly flexible, it was more predictable and a bit

more stable.

The old world, where times were a bit simpler?

Insurance Mindsets

6

The new world,a fluid workforce.

More flexible but a lot less stable

These days a college degree is no guarantee of a job, so there is a very good chance you will be saddled with debt.

With a new focus on experiences not things, a younger generation is pushing their careers out, and traveling more. Available jobs are coming from the gig economy, contracting, remote working, and of course self-employment and startups; but these by the very definition are transient. Gone are the days of working for a company for 40+ years.

Age of marriage is at an all time high (27 for women, 29 for men). Folks are buying cars and homes later in life, if at all. First birth for women over 35 has been rising over the past 20 years. People are living longer not necessarily healthier.

Basically, everything has changed.

Insurance Mindsets

7

J.A.M. means just about managing! In these

more fluid times folks feel like they are just

keeping their head above water. Our once

thriving “middle” class has hit a few bumps

in the road over the years and become the

“anxious” class.

Worry about living pay-check to pay-check;

6 in 10 in a recent survey of 2,000 people

said they felt like they were never going to

make ends meet on their current salary.

Independent

People fear being left behind.

Fear that their jobs will go away;

offshoring and automation lead these

concerns with some studies suggesting

1 in 3 jobs over the next 20 years will be

replaced with robots. Guardian

Know that they aren’t getting ahead;

wages fell in the UK while the economy

grew. Financial Times.

And… anxious their kids will not be

better off than they had been; nearly

half of 30-year-olds earn less than their

parents did at that age. Guardian

Insurance Mindsets

8

This anxiety is understandable.

The UK sits on its own as a rich economy that experienced a strong economic performance while the real wages of its workers dropped.

While employment is expanding, it’s mainly in lower-paid, less-skilled jobs. The number of managers has fallen more than 24 percent. This is a new precarious position that puts folks who have a zero-hours contract / gig economy existence in a situation where they are without benefits such as holiday pay, sick pay, pension contributions or minimum wage guarantees.

Insurance Mindsets

9

Entrepreneurism, side hustles and self-employment will save us …right?

A growing segment of the economy is moving away from traditional employment to try and close the gap. Self-employment now represents a larger share of employment: up from around 12% of the labour force in 2001 to around 15.1% in 2016.

Insurance Mindsets

10

A. Reluctantly Retired

Whether folks can't afford to or would simply rather not,

retirement at age 65 is getting pushed out further and

further. Often this is complicated by what's called the

sandwich generation. Folks who take care of both their

parents and their grandchildren.

B. Doubtful Youth

Anxiety around jobs and a long career. Young folks are trying

to find ways to adapt. With more and more people going to

college, competition for traditional jobs is increasing and a

degree no longer guarantees job.

Two key demographics to consider in this emerging fluid economy.

The 2 largest groups to become self-employed are also two of the most vulnerable.

Insurance Mindsets

11

Insurance Mindsets

40% 80% 45%

The typical self-employed person earns 40% less than an employee.

This explains rising debt levels among self-employed workers.

Analysis of data released by HM Revenue and Customs shows that almost 80% of

self-employed people in the UK are living in poverty, according to Tax Research UK.

Of self-employed individuals,45% between the ages of 35-54

have no pension.

Some key facts of this new fluid economy.

Insurance Mindsets

12

“My mental health has been deteriorating… I feel stressed and anxious”

– Jesse

“We spend so much of our time building our assets that we don’t have the time to protect them appropriately ”

–AssetVault

“It is difficult to think about the future (house, partner), because I don’t even know if I can find a good job yet”

– Nicola

“The world is becoming more and more automated… Should I not make myself more marketable I could become redundant”

–Marcia E.

“With the pace of life, the bad work / life balance is affecting my health”

– Lauren

Scarcity of time,abundance of stress.

This phenomenon affects multiple levels of people’s lives.

Participants mentioned having trouble keeping up with their finances. Frequently having little to no safety funds, not being sure their pension was enough, fearing never being able to afford a mortgage, etc.

Work and finance instability affects people’s mental health. A number of participants listed their mental health as one of the things they wish could be protected.

Relationships are also suffering in this new age; people are feeling more and more the distance from their loved ones.

“”

13

People feel out of control

Life moves fast

All these pressures are creating a perfect storm. Folks feel the balance of life isn’t quite right. More and more folks are becoming vulnerable to unforeseen events that could have a significant impact on their lives. A number of people feel as if they are just keeping their heads above water.

Insurance Mindsets

Insurance Mindsets

14

Insurance should be the perfect

product for this fluid economy.

“If you set out to create an industry that bring the worst out of people, it would look a lot like the insurance industry”- Dan Ariely

…Are you really delivering “peace of mind?”

The insurance industry has some work to dobridging the trust chasm.

15

Insurance Mindsets

17

Perception is reality.

18

“Brilliantly calculating the odds, in a clinical way, without emotions.”

–Michael D.

Insurance Mindsets

02 Mindsets & Opportunities

Insurance Mindsets

20

Behavioural mindsets go deeper

than traditional segmentations to

focus on goals, needs, pain-points,

actions, feelings and beliefs.

Insurance Mindsets

21

How they feel about risk

AVERSE TO RISK

COMFORTABLE WITH RISK

VS.

How they live their lives

LIVING FOR TODAY

PLANNING FOR TOMORROW

VS.

22

THE SATISFIER

Planning for

tomorrow

Living for

today

Comfortable

with risk

Averse

to risk

The four insurance mindsets.

Insurance Mindsets

THE OPTIMISER

THE EXPERIENCER

THE SEEKER

23

Planning for

tomorrow

Living for

today


Insurance Mindsets

THE OPTIMISER

The Seeker

The SatisfierThe Experiencer

Comfortable

with risk

Averse

to risk

Insurance Mindsets

24

KEY BELIEFS

• Insurance is a necessity: you never know

what life will throw at you

• See insurance as a way of enhancing

their life and lifestyle, either by

providing peace-of-mind should the

worst happen (P&C/Life), or regular

sources of value (health)

• Often frustrated at the lack of real

alternatives: open and willing to

experiment with new propositions but

little exposure to date.

Averse to risk, plan for tomorrow.

Optimisers

KEY BEHAVIOURS

• Willing to go the extra mile and invest the time

and effort (and sometimes money) to get coverage

suited specifically to their needs

• Achieve real peace of mind by combining

standard policies into a bespoke

‘stack’/combination that gives them the personal

cover they want

• Brand ‘sticky’ rather than brand loyal - don’t

switch that frequently due to time and effort gone

into finding the right provider in the first place

• More likely to be influencers and recommenders

to their peer group but this is just as likely to be

related to negative as well as positive experiences

“I’m willing to do what it takes to get the best

cover”

In this mindset, people define success by getting the most protection in

the most efficient way. They focus on maximizing coverage against cost.

Insurance Mindsets

25

In these fluid times…

Optimisers rely on a range

of providers and policies to

create the ideal level of

cover for them.

Pain points…

Insurance is critical as ‘you

never know what will happen’,

but they’re frustrated by the

lack of alternatives.

Other sectors - especially tech -

are much more tailored to their

needs: why not the insurance

industry?

They’re willing to…

Go the extra mile: put in the

time, pay a little extra, and be

more open to sharing personal

and behavioural data.

Insurance companies can win them over with…

Bespoke products that fit their life

perfectly.

A partnership and ecosystem

approach that brings the best

products together in a seamless

and delightful way.

Mindset

Optimisers

26

Optimisers want…

Bespoke products that cover their life thoroughly.

Optimisers are inherently risk-averse and open to sharing data to achieve real peace of mind.

The ultimate opportunity for insurance companies is to become a ‘risk partner’ that creates bespoke policies and a high-touch relationship with an engaged customer.

27

THE SATISFIER

Planning for

tomorrow

Living for

today


Insurance Mindsets

The Seeker The Optimiser

The Experiencer

Comfortable

with risk

Averse

to risk

Insurance Mindsets

28

KEY BELIEFS

• Recognises the need for insurance but primarily

wants the basics done well at an affordable cost.

• Life is too short and insurance is too confusing to

spend time and effort picking between what are

probably fairly similar products.

• Doesn’t really trust insurance companies, and is

wary of personal data being used to sell irrelevant

products or catch them out when it comes to

claims.

• Although by no means tech luddites, when it comes

to finances they respect and trust the staying

power of older, established companies.

• Increasingly worried about coping with, or

becoming, the ‘sandwiched generation’, but don’t

know where to start and find it easy to put off

thinking about it

Averse to risk, lives for today.

Satisfiers

KEY BEHAVIOURS

• Use recommendations of friends/family,

reviews and aggregators to understand

where to go

• Not brand loyal, but will likely stay for a

similar price rather than shop around. A

price hike will make them move on

immediately.

• Use heuristics to make decisions between

similar looking policies: ‘it’s like buying

wine: I always choose the 2nd or 3rd

cheapest’

“Good enough coverage for right amount of money and

effort”

In this mindset, people define success by getting appropriate cover in a

simple and straightforward way, at minimum hassle and cost.

Insurance Mindsets

29


Satisfiers look to recognisable

brands with straightforward

policies: brand familiarity

rather than brand affinity.

They rely on trusted third

parties and heuristics to get

the job done swiftly.

Pain points…

Insurance is necessary but far

too painful, time consuming

and confusing.

New anxieties and fears in this

fluid world that insurance

doesn’t currently cater for.


Put in some time and money to get

to 'good enough".

Less open to sharing personal and

behavioural data with companies,

but if they were to do so it would

be to save time and money.


Clear, simple and transparent

policies for the new (and old) fears

in this fluid, uncertain world.

Rewards for loyalty to keep them

switching.

Mindset

Satisfiers

Satisfiers want…

Established brands to dothe basics brilliantly,

whilst serving changing needs and anxieties

Satisfiers are finding life increasingly complicated. They want insurers to stay in their lane and keep things simple.

The opportunity for insurance companies is to raise the bar on transparency and simplicity, by creating a new set of ‘smart default’ policies that address the fears of tomorrow without taking too

much time and effort today.

30

Planning for

tomorrow

Living for

today


Insurance Mindsets

THE EXPERIENCER

The Seeker

The Satisfier

The Optimiser

31

Comfortable

with risk

Averse

to risk

Insurance Mindsets

32

KEY BELIEFS

• Sceptical about the whole notion of

insurance and conflate the category and the

companies: every insurer is the same; not

worth their time thinking about.

• Insurance is more hassle than it’s worth,

rather than a solution

• Little things add up; there is a tipping point at

which they question the value of the insurer

• Suspicious of companies that want their data

and wary of the ‘slippery slope’ into a world of

‘big brother’.

• Wary a claim would ever pay out, either

through personal experience or stories from

friends and family

Comfortable with risk, lives for today.

Experiencers

KEY BEHAVIOURS

• When they must get insurance, they are

price-driven and look for the ‘minimum

viable cover’.

• They set it and forget it; inertia is better

than thinking about it

• They rely heavily on aggregators and

reviews to get to a low-cost offering quickly

“I want to focus on enjoying life, not think about insurance”

In this mindset, people define success by enjoying what they have

today. Their priority is to focus on their lives, and they don’t see

insurance as relevant.

Insurance Mindsets

33


Experiencers rely on friends and

family and get on with enjoying

today rather than worrying

about tomorrow

Pain points…

Unaware and (sometimes wilfully)

ignorant of how insurance could

play a role in their lives.

Their lives keep them busy enough,

so it’s easy to dismiss thoughts

about a possible tomorrow.


Do just enough to get just

enough: minimum viable cover.

Suspicious of big business and

sharing data, but willing to

engage in high-touch

relationships with selected

brands that share their values.


Protection that doesn’t feel like

insurance.

Brands that reflect their values.

Propositions that focus on getting

more out of today.

Mindset

Experiencer

Experiencers want…

To get the most out of today, rather than think about tomorrow

Experiencers are values-driven, and suspicious of big business and sharing of personal data.

The opportunity for insurance companies is to:

Enlist advocates to educate them on the value of insurance (they won’t listen to insurers); Use ‘trojan horse’ strategies that embed protection in products/services they value today;

Utilise purpose-driven brands that don’t feel like insurance.

34

Planning for

tomorrow

Living for

today


Insurance Mindsets

THE SEEKER

The Optimiser

The Satisfier

35

The Experiencer

Comfortable

with risk

Averse

to risk

Insurance Mindsets

36

KEY BELIEFS

• Life is there to be experienced and enjoyed,

but you need to make it happen rather than

hoping for the best

• Confused and annoyed that they have to fit

into insurance boxes rather than policies

being tailored to their needs and interests

• Feel rejected and ignored by the insurance

industry: they assume they can’t be catered

for because they can’t find it easily and don’t

have the patience to plough on

• Open to new ways of protecting the

things/people/experiences they love and

willing to try new offerings

• Open to sharing personal data with insurers

(for the things they care about) but looking

for extra sources of value beyond just lower

premiums

Comfortable with risk, plans for tomorrow.

Seekers

KEY BEHAVIOURS

• They try (and often fail) to optimise for

specific needs they care about (an

expensive bike; their health/wellbeing) then

get good enough for everything else

• Protect the things/people they care about

without insurance (in a way that gives

them control): savings accounts,

locks/alarms, extended warranties etc.

• Open to trial and willing to extend to

additional products and services with

brands that have proved their worth.

• Brand advocates for those that serve them

well and reliably

“I want cover for the specific things I’m passionate about”

In this mindset, people define success by maximising the protection

and enjoyment of particular passions or interests. They are confident

and comfortable with change.

Insurance Mindsets

37


Seekers rely on standard policies

but remain less protected, and

more anxious, than they would like.

Oscillate from sporadic searching

to giving up in exasperation.

Pain points…

Frustrated by generic policies and

overwhelmed by confusing lingo.

Both paying for cover they don’t

want and leaving themselves

uninsured where it matters.


Pay more and share more (data) to

protect the specific things they care

most about, at the expense of the

stuff they don’t.

Be loyal to brands that make things

simple and cater to their needs


Tailored and simple products/services that

reflect their passions.

Niche propositions built around a

community of interest.

Mindset

Seeker

Seekers want…

Great cover for the specific things they care about

Seekers are on the edge of the market looking for ways in, but currently it’s too difficult.

The opportunity for insurance companies is to delight them with policies tailored to their passions and make it super simple to pick and choose what to turn on and off.

38

THE SATISFIER

Planning for

tomorrow

Living for

today


Insurance Mindsets

THE OPTIMISER

THE EXPERIENCER

THE SEEKER

39

Comfortable

with risk

Averse

to risk

Insurance Mindsets

Why do we usemindsets?

1. Behavioural Mindsets, not demographics.

We focus on underlying psychology and personality traits, which are much more stable than traditional socio-demographic segmentations

2. Mindsets are designed to

provoke and inspire, not

measure.

Rather than sizing mindsets, size demand for the propositions they inspire.

3. The primary reason

innovations fail is because

they’re not solving real needs.

By using Behavioural Mindsets we give ourselves the best possible chance of developing propositions that have promise in the real world.

40

A word on Design Research.

We are focused on innovationWe are trying to create things that do not yet exist, rather than understand existing markets. So we are focused on finding insights that can inspire innovative ideas and reduce the risk of expensive failure.

Most innovations fail because no-one needs the product/serviceOr, more accurately, no-one needs it sufficiently to pay for it, either with money or some other form of value exchange.

Real needs are often latent, and poorly expressed.Customers can’t predict what they will do, or want, in the future. No-one ‘needed’ a smartphone before Apple came along.

We focus on understanding behaviourPast and existing behaviour are the best predictors of future behaviour, so we focus our research here. We are less interested in customer predictions, attitudes and intentions, all of which are weak predictors of future behaviour. This means we typically avoid focus groups and opinion polls.

The future is here, it’s just not evenly distributedUnderstanding current and recent experiences, workflows, pain points and workaround/hacks (and the ‘why’ behind them) provides us with ‘clues of what could be’, and are the springboard to new ideas.This also means we are interested in the atypical/extreme customers (such as the non-insured and those experimenting with alternative models) just as much as the ‘typical’ customer.

And the underlying meaning and mindsetsBy understanding what people are really trying to accomplish and the underlying way in which they see a product, a market, or themselves, we are better able to inspire innovation from a place of genuine empathy.This means we draw heavily upon the behavioral and social sciences in methods and analysis, because people are generally poor observers of their own lives.

Insurance Mindsets

41

03 Living Services

Insurance Mindsets

We’ve comea long way.

Web & Internet

2000

Mobility

2010s

Living Services

1990s

44

45

Insurance Mindsets

Living?

• They are tailored and live around the

individual – flex to meet each person’s

needs and preferences

• They evolve: They constantly learn more

about our needs, intentions, preferences,

and change in real time

• They are very proximate to us in the

environment – think wearables and

nearables

45

Insurance Mindsets

How will Living Services change our lives?

1. Simplify: Automate decisions and actions,

and reduce friction

2. Disrupt: Enable radical change – from

reactive to proactive, from population-

based to personal, from utility to beloved

service

46

Machines and Artificial Intelligence will automate all mundane tasks

Cars that drive themselves, threatening to change how we travel and buy cars

Intelligent devices that can hear us, changing how we interact with technology and other humans

Technology changes fast.Sci-fi is here today, and it’s all about digital disruption

Technology changes fast.People do not.Current approaches to transformation don’t accommodate the needs and desires of people.

Actively disengaged employees cost the USA $450bn - $550bn per year.

70% of surveyed global organizations said traditional approaches to reinventing themselves have become increasingly irrelevant.

70% of digital transformation done by 2020 will fail.

Sources: Accenture Vitality Research, McLean & Company, McKinsey

Outstanding employee experiences

Improving the way people work, including their tools, flow and process. It’s all about a consumer-grade design approach for colleagues.

Customer-centric approaches and organizational structures

Helping rewire organizations to be customer-first. This includes looking at digital design accelerators, customer experience North Stars, refreshed operating models and strategies to put the customer at the heart of the organization.

To unlock the power of digital, organizations need to rewire with humans at the heart

Culture that encourages innovation at every level

The cultures and behaviours that encourage personality, instinct, relationships and craft. This often requires organizational change, leadership development, and design from within.

To unlock the power of Living Services, organizations need to become a Living Business

We believe a Living Business is one that is wired for flexibility, and has the ability to shift and reshape as the external environment and expectations change.

51

04 Living Business and Your Vital Signs

Personality

The behaviors, beliefs, and values that shape the experience of your company. What’s the core purpose and mission that directs the whole organization's activities?

A Living Business balancesfour vital signs

Relationships

Craft

Instinct

Personality

Instinct

The internal wiring of the organization that empowers people to operate and make decisions autonomously; this increases the speed of change and innovation.

Craft

The essence of what your business does, and what each person within the business contributes. It’s about the combination of skills that make its offering unique.

RelationshipsThe strength of the relationships within your business’s ecosystem; including each colleague, customer, partner, and wider society.

53

ShowThe digital and physical experiences that manifest the brand purpose through everything the business does.

A Living Business recognizesits biases

Relationships

Craft

InstinctPower

Platforms, infrastructure, and capabilities required to implement, power, and maintain the desired target experience, purpose, and expectations.

TellMarketing, branding, and advertising strategies and campaigns that take the brand purpose to the world.

BehaveCultural, operational, and processes that manifest the organization’s purpose through every internal interaction.

show tell

power behave

Personality

54

Living Business

We can identify these biases through a vital signs audit

03 How do you become a Living Business?

Do you have a compelling purpose that motivates your colleagues?

Do you have a clear vision that provides direction?

Are your company values applied to everything you do?

Would your colleagues recommend working at your organisation to their friends?

Do you involve end-users when creating products and services?

Do you provide colleagues with the support they need to develop?

Do colleagues feel like their contributions are seen and valued?

Do your colleagues go the extra mile to create compelling products and services?

Do teams have autonomy to shape what they work on, and how they work?

How quickly does decision-making take place?

Does performance measurement take into account value delivered to the customer?

Is your organizational structure slowing down your colleagues?

Do colleagues feel like their experience is important to their employer?

Do team successes count more than individual successes?

Do colleagues enjoy working with their peers?

Does your organisation make it easy to collaborate with external partners?

Personality Craft Instinct Relationships

Some examples of areas we explore:

Living Business

Once biases are identified, we can suggest the interventions to become a more balanced Living Business

03 How do you become a Living Business?

Relationships

Craft

Instinct

Personality

show tell

power behave

Design thinking

Digital innovation

Store experience

Branding

Content strategy

Image & awareness

Operational structure

Objectives & KPIs

Platforms

Cultural values

Talent

Space design

Example intervention areas:

Thank you

applying living business to insurance · 2018-08-03 · applying living business to insurance mark...

Documents