Finally, this research would not be complete without introducing a comprehensive product development framework for digitalising benefits programs. The previous sections showed that the product development process included several high impact decisions. These decisions have to be revisited in the future and possibly modified as well, in light of new information.
The framework starts from the stakeholder and user needs and follows through the sections presented in the results section until the evaluation phase. Based on the outcomes of the evaluation a product retrospect workshop is required where the whole development team can analyse these outcomes. The results of the retrospect are channelled back to the earlier stages of product development. These feedback loops give an iterative manner to product development and they are essential to comply with both stakeholder and customer needs, even if they change over time.
The framework also takes into account the separate platform and content components of the product and shows how both intermediaries and the development team can utilise the iterative evaluation.
Figure 4: Product structure, presenting the unity of content and platform
Table 5: Product evaluation framework
- Leaving user feedback after using a benefit
- Spending a longer time in the app
- Browsing and checking the details of benefits
- Total active days per user
- Display and conversion
- Searching and finding the desired benefit
- Enrolling benefit easily
- Asking for an insurance offer
- Purchasing insurance from the
5. Discussion
According to the research results, I argue that trust and advisory are the key elements of adoption and engagement for digital worksite benefits products. Both of these are originated from the complexity of financial services.
On one hand, worksite benefits programs can offer employees a feeling of trust. This trust incorporates that the employer cares about their wellbeing and builds up the benefits program according to their needs. Based on this trust, employees prefer to purchase insurance through their employer’s worksite benefit program over selecting from market offers.
On the other hand, complex financial services often require deep domain knowledge.
Personal advisory of intermediaries combined with easily understandable insurance offers might be able to educate employees and facilitate more responsible decisions. However, the traditional channels of advisory such as in-person meetings or phone calls are not preferred by employees any more.
The designed product serves both of these needs by combining the trustworthiness of the employer and simple access to the reliable financial advice of intermediaries in a single place. It is worth to mention that by including both employers and intermediaries in the value chain, the product is able to adapt to the local market conditions. Many international worksite benefit products show examples for an employer-facing business model, however the local environment required to include intermediaries as well. This prevented simply ‘copying’ existing products and required to analyse the needs of every participating stakeholder from the ground up.
Although collaborating with intermediaries creates a rapid growth and expansion opportunity due to their existing partnerships, it also means additional dependencies.
These dependencies might restrict the innovation potential of the product in the long-term.
The most urging dependency at the moment is the content, the benefit services distributed through the product. Intermediaries see the content as a ‘design once’ problem and they step into long-term (up to 10 or 15 years) partnerships with insurance companies. I expect quantitative feedback and evaluation on the product’s performance to be able to transform the attitude of intermediaries. This could drive the iterative update of the content as well and meet the user needs more closely.
Traditional worksite benefits programs focused solely on converting as many employees into customers as possible, however, this attitude created a signifiant barrier in adoption.
Employees did not feel the real value and the supporting role of the worksite benefit program. Analysing the complete organisational journey of employees and designing the product features based on the experienced stages was one of the most crucial part in the digitalisation process. In this way, the final product is truly able to support the wellbeing of employees from their first, until the final day at the company. This ubiquitous feeling can possibly drive higher employee interaction and increased product adoption.
Digital transformation opens up the way for data-driven solutions that offer more personalised services. The case is similar for this product, where tracking user activity and decisions creates entirely new data sources. Although it is not yet clear how this information can be utilised, personalisation in insurance always raises complex business and ethical questions. More data on users will make predictions on their future losses more accurate. However, knowing users’ precise risk might easily exclude them from getting insurance, simply because insurance companies will not underwrite high-risk individuals.
Based on new user information loss prevention will also have a more significant role (Generali, 2016). I foresee that ‘finding the fine line between discriminating people for factors beyond their control and nudging customer behaviour in the right direction’ will be a key part of data-driven insurance product development in the future.
Completely digitalised insurance distribution will create unprecedented transparency in the sector. Because of the entirely digital insurance management, everything will be retraceable and regulators will gain real-time monitoring capabilities over the whole industry. This will result in intermediaries’ and insurance companies’ more rapid response to customer conflicts.
The market launch of such digital product anticipates a complex industry-level transformation. Digitalisation will hardly change the core concept of insurance, but it is safe to assume that it will have serious effects on distribution and assistance methods.
Insurance distribution and sales will continue to move over onto digital platforms in an accelerating speed. Just as the designed product, these platforms will be able to pro-actively recommend suitable insurance offers to customers based on their profile, life situation and preferences.
However, this questions the role of human brokers, whose main job until now was to sell insurance in-person. Their knowledge of complex financial services is still essential and
cannot be completely replaced with digital algorithms. Therefore I expect the role of human brokers to transform into advisory and consultancy duties, carried out over digital channels. This transformation could also respect the user needs, who expect access to this advisory through mobile applications.
User adoption of digital insurance products might be able to accelerate the transformation of regulations as well. This step is essential to open up the way for new innovative and customer-centric products.
Finally, launching similar digital products in collaboration between startups and incumbents can show market players the real potential of working together with innovative, digitally competent insurtech companies. The product developed in this research was finished under 6 months and solves needs left unaddressed for years. This demonstrates that while the digital transformation of incumbent companies will take at least 5-10 years, a startup is able to move rapidly. It is also true that launching such products is only possible with the market position of traditional players, therefore all innovative products have to work together with existing solutions as well.
The designed product addresses significant problems in digitalisation of the insurance industry, however, there is definitely space for future improvements in both worksite benefits programs and other insurance-related fields. The impact and stakes of these products are extremely high. The two most frequently referred experts and intermediaries in worksite benefits programs, Aon and Willis Towers Watson have announced their merger agreement just after this research started (Aon, 2020a). The price Aon paid for Willis Tower Watson was the astronomical sum of 30 billion dollars and with this transaction, Aon became the largest intermediary in the world.
I expect that similar events will show the importance of digitalisation in the insurance industry and in worksite benefits programs likewise, and will be able to accelerate research in the field. I hope that this publication will be followed by many more, emphasising the combination of business needs with user-centred design in insurance-related product development.
6. Limitations
Usability testing of the prototype was not feasible due to user incentives of purchasing a benefit and regulation restrictions in design. This issue was addressed with heuristic evaluation and designing an evaluation framework. The framework is able to transform the usability evaluation of digital benefit products from an offline qualitative method to a combined quantitative and qualitative analysis during live operational conditions.
The product development included features that became achievable due to digitalisation but not possible to present in a prototype. Some of these features were automated access management to make benefits available instantly; creating employee segments to offer the most suitable benefits to everyone, and collecting performance metrics to continuously improve the benefits offering.
7. Conclusion
Starting from research results and international examples of employee benefit programs, I chose a set of methods to approach the design opportunity and developed a prototype to ease employees’ benefit-related activities. During the design process, I analysed both customer and user needs to make the product equally attractive for all parties. I also took into account legal considerations, because insurance distribution and management is a highly regulated area.
The key findings showed that most internationally successful digital benefit solution providers take on an intermediary role as well. I concluded that in the local environment this is not a viable business model for the product. Local intermediaries have such a powerful presence at employers, that a startup could not compete with them. This proposes a business opportunity where instead of competition, Vern can collaborate with intermediaries and solve their digitalisation issues with the developed product.
I analysed multiple emerging strategies for the product. Picking the “pure insurance wallet” concept without including additional non-core-insurance features was evaluated as the most feasible alternative for the first product iteration. Furthermore, digital benefits programs have to be separated into two different components. The content is formed by the insurance services included in the program, and the platform delivers the services to the employees. Vern can only affect the platform component, as the content is selected and managed by the operator intermediary. This required a modified development, testing and evaluation approach compared to traditional user-centred design practices.
Finally, employees trust that the offered benefits program satisfy their needs, however, they often require further assistance in insurance-related matters. The platform has to offer a direct communication channel between employee and intermediary to facilitate consultative advisory. This channel is a key element of building trust towards the product and fostering its adoption.
This paper provides points of reference for further research in digitalisation-driven product development. The presented methods showcased how exploring existing, non-digital user journeys and business processes can stand as a starting point of a research process. The work done is also an example for combining user-centred research methods with business requirements to design the functionality of the product based on the non-digital foundation. It also showed that industrial product development cannot stop at a prototype
design, it has to discuss questions around operation, monitoring and continuous evaluation.
The research presented how these aspects of the product can be taken into account and this framework can be applied to future digitalisation-centred research.
The work opens up a new direction in the development of digital worksite benefits programs, but it also has tangible outcomes. The design of the product started together with this thesis research and the two evolved simultaneously. The product was successfully developed and launched to the market in June 2020. Its first real production usage is expected to be in early 2021.
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