Why is the insurance industry plagued with so many failed apps?

The App and Play Stores for insurance are something of a wilderness, littered with failed apps. Often developed in a vacuum. Not joined up with the strategy and marketing teams. Solutions looking for problems that miss all sorts of internal and external marks.

Yet insurers have been experimenting with digital for a long time. The opportunities are clear, both for enhancing the traditional model as well as for driving brand new business models for insurance.

Digital offers traditional insurers the opportunity to create regular engagement with what is often a distanced customer. Customer experience can be enhanced and costs can be cut by simplifying the hassle of getting an accurate quote and making claims.

Much has been written about the disruptors in the market – new entrants building products that take the advantage of fast moving technology adoption. IoT home insurance (Neos), pay as you go (Cuvva), single invoice insurance for SMEs (Nimbla) peer to peer insurance (Friendsurance) and insurance-as-a-service (AXA Singapore), to name but a few.

So why are there so many abandoned vehicles by the side of this road?

  • Firstly the culture of traditional insurers can be counter-productive when it comes to innovation.
    It’s a naturally risk-averse business. And the large companies have teams used to working independently, with no real cohesion. That’s why the big players are establishing separate innovation hubs and incubators (Aviva’s Digital Garage and AXA’s Kamet and AXA Strategic Ventures) and financially backing the insurtech upstarts (Ageas and Back Me Up).
  • Secondly, insurers don’t know their customers or have lost that knowledge.
    Insurers often don’t have the deep and authentic understanding of their customers that reveals real needs and opportunities. There is often significant distance from customers, both by the very nature of an insurance purchase – often bought and not actually, or rarely, experienced – but also now that price comparison intermediaries dominate the industry. And inside the organisation consumers are often reduced to a series of tired snapshots or stereotypical segmentations gathered through tactical research.
    Or, perhaps, deep understanding of the customer exists just in one siloed team. But for the wider business those pivotal nuggets of consumer truth have been lost – usually somewhere between the insight, marketing and product development teams.

When businesses have fallen out of love with their consumer, or have lost that essential guiding truth somewhere along the line, the result is expensive failed products.

So much can be done to fix this issue:

  • There’s no substitute for deep consumer knowledge. The right mix of demographic and psychographic data will deliver genuine addressable customer segmentations. A rich set of ethnographic techniques can bring those segments to vivid engaging life – fleshed out customers the business will love. And the consumer needs and opportunities they reveal will drive real product innovation.
  • Embedding consumer insight throughout an agile product development process means that teams stay close to those consumer truths throughout. From opportunity spotting and ideation, through to in-the-moment prototyping and UX testing.
  • Focusing development in short collaborative sprints where the insight, marketing and product development teams work together will ensure focus, productivity and speed but will also mitigate risk and manage costs.

In this way insurers can drive real innovation and avoid the expensive nightmare of a product withering in the app store, plagued by poor downloads, functionality glitches and poor customer reviews.

Insight To Prototype

FreshMinds has a solution to this issue. We call it Insight To Prototype. It’s an approach that combines the best of our insight, strategy and digital design capabilities. Working in close collaboration with our customers we create validated commercial propositions and digital prototypes built on a rock solid foundation of customer truth.

We recently worked with Vodafone to do just this. We took them from initial customer insight, through ideation, proposition design,  prototype development and testing. The product – Secure Net – has now launched in the UK with great success.