The digitalisation of worksite benefits programs from a product development perspective

IN

DEGREE PROJECT INFORMATION AND COMMUNICATION TECHNOLOGY,

SECOND CYCLE, 30 CREDITS ,

STOCKHOLM SWEDEN 2020

The digitalisation of worksite

benefits programs from a product

development perspective

MÁRTON ELODI

KTH ROYAL INSTITUTE OF TECHNOLOGY

Aalto University School of Science

Master’s Programme in ICT Innovation - EIT Digital Master School

Márton Elődi

The digitalisation of worksite benefits programs

from a product development perspective

Master’s Thesis

Budapest, June 10, 2020

Examiner: Associate Professor Ylva Fernaeus, KTH Royal Institute of Technology Supervisor: Dr. Marianela Ciolfi Felice, KTH Royal Institute of Technology

AALTO UNIVERSITY School of Science

Master’s Programme in ICT Innovation EIT Digital Master School

Abstract of Masters’s Thesis

Author: Márton Elődi Title of the thesis: The digitalisation of worksite benefits programs from a product

development perspective

Date: June 10, 2020 Publishing language: English ICT Innovation - EIT Digital Master School

Major: Human Computer Interaction and Design Supervisor: Associate Professor Ylva Fernaeus

Thesis advisors: Dr. Marianela Ciolfi Felice, M.Sc. Róbert Oroszi

This research presents a way for digitalising worksite benefits programs. The related work analysis and results of user interviews showed the important role of benefits programs in the wellbeing of employees, and as a result in company performance and employer branding. However shortcomings were discovered in the current format of worksite programs and suggested that digital transformation might help to address these shortcomings. The research used semi-structured interviews and analysis, user journey mapping, prototyping, and heuristic evaluation methods to deliver the concept of an employee insurance wallet. Furthermore, the research stepped beyond product design and presented a comprehensive framework for developing, monitoring, and operating such digital worksite benefit product. The framework incorporates stakeholder needs to ensure business success and user-centred design methodology to embrace usability and engagement principles. According to the research results, the real-life version of the product was developed.

Keywords: worksite benefits, employee wellbeing, insurance, insurtech, digital transformation

AALTO UNIVERSITETET Högskolan för teknikvetenskaper Masterprogram i IKT-innovation EIT Digital Master School

Sammandrag av diplomarbete

Författare: Márton Elődi Titel: Digitaliseringen av arbetsplatsen gynnar program från en produkt

utvecklingsperspektiv

Datum: June 10, 2020 Språk: Engelska ICT Innovation - EIT Digital Master School

Major: Mänsklig Datorinteraktion och Design Övervakare: Universitetslektor Ylva Fernaeus

Handledare: Dr. Marianela Ciolfi Felice, M.Sc. Róbert Oroszi Denna forskning presenterar ett sätt för digitalisering av

arbetsplatsfördelningsprogram. Den relaterade arbetsanalysen och resultaten från användarintervjuer visade den viktiga rollen som förmånsprogram har för anställdas välbefinnande, och som ett resultat i företagets prestanda och varumärke från arbetsgivare. Emellertid upptäcktes brister i det aktuella formatet av

arbetsplatsprogram och föreslog att digital transformation kan hjälpa till att lösa dessa brister. Forskningen använde semistrukturerade intervjuer och analyser,

kartläggning av användarresor, prototyper och heuristiska utvärderingsmetoder för att leverera konceptet för en anställdsförsäkringsplånbok. Vidare gick forskningen bortom produktdesign och presenterade ett omfattande ramverk för att utveckla, övervaka och använda sådana digitala arbetsplatsfördelar. Ramverket innehåller intressentbehov för att säkerställa affärsframgång och användarcentrerad designmetodik för att omfatta användbarhets- och engagementsprinciper. Enligt forskningsresultaten utvecklades den verkliga versionen av produkten.

Nyckelord: arbetsförmåner, anställdas välbefinnande, försäkring, insurtech, digital transformation

Acknowledgements

Table of contents

Abstract of Masters’s Thesis

2

Sammandrag av diplomarbete

3

Acknowledgements

4

Table of contents

5

1. Introduction

6

2. Related work

8

2.1. The digitalisation of financial services in Hungary 8 2.2. Advisory and consultancy in financial services 9 2.3. From worksite marketing to employee wellbeing 10

2.4. Ongoing trends in benefits programs 11

3. Methods

14

3.1. Stakeholder and user interviews 14

3.2. Ideation, feature selection and prioritisation 15

3.3. User journey mapping and prototyping 16

3.4. Evaluation 17

4. A design for digitalisation

18

4.1. Stakeholder and user expectations 18

4.2. Product strategy 25

4.3. Employee journey map and feature selection 25

4.4. Prototype and heuristic evaluation 29

4.5. The structure design of the product 32

4.6. Evaluation framework 33

4.7. Product development framework 34

5. Discussion

38

6. Limitations

41

7. Conclusion

42

1. Introduction

The wellbeing of employees is a growing concern for employers, from both a performance and an employer branding perspective. Worksite benefits programs can develop both perspectives by offering employees complimentary and discounted services (Aflac WorkForces Report, 2014). Insurance is the most common among these services because it can equally support the employee’s physical, mental, and financial wellbeing (Willis Towers Watson, 2020b).

In the Central and Eastern Europe (CEE) region and especially in Hungary, worksite benefits programs are operated by insurance intermediaries. An intermediary (also commonly referred to as an insurance broker) builds up a worksite benefits program from insurance services of one or more insurance companies. The worksite benefits program is then sold to large-size employers, where employees gain access to the services.

The financing of benefit services differs based on the agreement between the intermediary and the employer. When the employer finances the cost of the insurance and it covers employees at no extra cost, it is called group insurance. If the employee has to pay the price of the insurance (even if the price is discounted), it is referred to as an individual or

voluntary insurance. As a result, the worksite benefits program might be entirely free for

the employer, but it might also comprise up to one-third of the organisation’s total labour costs (Hewitt Associates, 2002).

Although worksite benefits programs should be beneficial for employees, employers, and intermediaries alike, results do not support this theory. On a global level, only 8% of employers say that their benefit strategies are very successful and interestingly 14% do not understand their programs’ performance (Aon, 2019). Based on discussions with employers and intermediaries, the results are similar in Hungary. Benefit programs seem to operate with low conversion and engagement rates, that are only able to attract 1-3% of employees. The problem lies in the format and delivery of benefits programs. As it is clear by (Aon, 2019), most employers use emails, posters and face-to-face conversations to communicate benefits. In Hungary there are sometimes microsites dedicated to insurance sales through employers, however, employees show little engagement with such solutions.

of the benefits program is a pressing issue for most employers in the region (Willis Towers Watson, 2020b), employers do not have a clear picture of their return on investment.

Aon and Willis Towers Watson, two market leader intermediary and benefits program

operator emphasise “provide greater benefits choice to meet a growing and broader range of

needs” (Willis Towers Watson, 2020a). However, they present little implementation

guidelines and technological background to do so. This implies that intermediaries did not digitalise their benefits programs consciously, despite that changes in technology, regulation and customer needs started a radical transformation in the insurance sector (Trias Pinto, 2017). It also suggests intermediaries’ shortcoming in digital competencies regionally.

Vern Insurance Technologies is developing digital insurance distribution and assistance

solutions for Hungarian insurance companies and intermediaries. While traditional companies’ role is to maintain the trust of the public by operating safely and reliably, Vern as an insurtech startup can experiment with innovative ideas more freely. The company is developing an entirely digital worksite benefits product. As a product developer at Vern, my role is to facilitate this digitalisation process, by finding a synthesis between traditional benefits programs and modern solutions. Although the product comprises multiple components, this research only discusses the transformation of employees’ access to benefits. The platform providing this access is referred to as an insurance wallet or simply a wallet.

Based on research results and international examples of this field, I define methodology and follow a user-centred design process to develop a prototype. During this process, I also incorporate business requirements and legal restrictions. The outcome of the research presents a mobile application prototype; product strategy, structure and evaluation as well. According to the results, the product is positioned in the value-chain of current worksite benefits programs, suggesting a go-to-market plan based on partnerships. Finally, I discuss employee adoption and engagement towards the designed product and look out for further implications in the digital insurance sector.

2. Related work

The digitalisation of worksite benefits programs is not an actively researched subject in the region, therefore the topic is examined from neighbouring perspectives.

2.1. The digitalisation of financial services in Hungary

The core feature of the designed product is digital access to insurance services. To understand the opportunities and restrictions of digitalising such financial processes, it is important to have an overview of what related activities had been done and can be done. In financial services, I distinguish two major categories: banking and insurance. Digital banking services are called fintech, and insurtech stands for insurance. The digitalisation of the two categories are closely related to each other, however, fintech solutions are more advanced compared to insurtech (Deloitte, 2018). The transformation of the insurance industry has come rather late and it has yet to exploit the full potential of digital technologies (Eling & Lehmann, 2018).

Hungarian incumbent financial institutions are increasingly adopting digital solutions, however, the overall digitalisation is still immature (Magyar Nemzeti Bank, 2020). The principal causes are usually linked to the underdeveloped financial literacy and digital competence of customers; the unresolved issue of online customer authentication; and lack of customer-centric approaches (Digitális Jólét Program, 2019; Fehér & Varga, 2017; Magyar Nemzeti Bank, 2020). Institutions are often insisted on branches and in-person contact instead of digital channels (Ferrari, 2016; Magyar Nemzeti Bank, 2020). From all insurances, 21% is distributed via digital channels, however, this value widely varies between 0,2% and 74% based on the complexity of the insurance service (Magyar Nemzeti Bank, 2018, 2020).

transformation is constrained by obsolete IT systems and preference for stability, security and cost-effectiveness over rapid innovation (Digitális Jólét Program, 2019; Ferrari, 2016). The fintech sector is dynamically expanding, with an increasing customer base, employees, funding and revenue (Magyar Nemzeti Bank, 2020; Trias Pinto, 2017). Financial innovation is also a national economic interest for the Central Bank of Hungary. This innovation can only happen when stable incumbent institutions start an active collaboration with agile, digitally competent companies and startups (Carletti, 2017; Digitális Jólét Program, 2019; Magyar Nemzeti Bank, 2020; Trias Pinto, 2017).

Regulatory compliance of financial services remains a perennial concern, but other issues such as data protection and cybersecurity are emerging as well (Willis Towers Watson, 2020b). Fintech companies and incumbent institutions fall under identical regulations because of fair competition principles (Magyar Nemzeti Bank, 2020), however, this creates an unfavourable situation where fintech startups are restrained by law constructed for large-size core financial companies. Online customer authentication and contract signing is an unsolved issue from a legal perspective, preventing completely paperless administration (Becsei et al., 2018; Digitális Jólét Program, 2019; Magyar Nemzeti Bank, 2020). The regulation for online insurance distribution is stated by (Magyar Nemzeti Bank, 2015) and affects the accessibility, clarity and communication of these services with a key focus on meeting the customer needs.

2.2. Advisory and consultancy in financial services

Distribution of financial services and especially insurance sales, always followed a consultative sales paradigm, meaning that customers have been able to get help from human advisors.

The importance of advisors in Hungary is significant, as 85% of all insurance is sold through human agents (Magyar Nemzeti Bank, 2018). It is a shared understanding between industry professionals, that human agent contact cannot be replaced because of its need for the customers’ trust (Portfolio, 2020; Trias Pinto, 2017). Although algorithm-based advisory (robo-advising) is an emerging technology, its reliability and legal aspects are still ambiguous.

retirement to managing healthcare costs and caring for family members, all contribute to their feelings of financial wellness (Bank of America, 2019; Jenkins, 2004; MetLife, 2003). Therefore, customers require guidance about their financial issues, but getting the right financial advisor is not always easy (Ferrari, 2016).

The demand for financial advisory also emerged at customers’ workplaces, their main source of living. Advice from professionals was ranked as the most important financial wellness program feature for employees and a key incentive to purchase benefits (Aflac WorkForces Report, 2018; Bank of America, 2019). Employees also prefer that their employer actively guide their benefits choices to aid understanding and support decision making (Jenkins, 2004; Willis Towers Watson, 2020a). Traditionally, employers have focused on education and communication to help employees make more informed decisions but failed to prioritise reliable advice on financial security (Benify, 2019a; Willis Towers Watson, 2020a). There are also sensitive matters where employees would seek advice but do not feel confident to share with their employers. (Aon, 2017b)

2.3. From worksite marketing to employee wellbeing

Worksite marketing as a term dates back to the 1940s and it has been used to describe the distribution of financial services to employees via an employer. The range of services under this heading could be very wide - from car insurance to mutual funds and health cover to banking products (Jenkins, 2004). These offerings are associated with employee satisfaction, which in turn is linked to attitudes and behaviours that serve the interests of the employer (Dulebohn, Molloy, Pichler, & Murray, 2009; Harris & Fink, 1994).

Since then, the need shifted from a pure marketing opportunity to a more robust approach covering the employee’s physical, financial, emotional and social wellbeing (Willis Towers Watson, 2020b). Nowadays employee wellbeing programs mean physically and mentally healthy, financially stable employees, with higher productivity, engagement, job satisfaction and a more positive employer perception (Aflac WorkForces Report, 2014; Aon, 2017b; Mitchell, 2004; Willis Towers Watson, 2020a). Employers with a sense of societal purpose understand the concept of sustainable human capital and help employees to thrive with an integrated approach and higher investment towards wellbeing and employee benefits (Benify, 2018; Dulebohn et al., 2009; Willis Towers Watson, 2019, 2020a, 2020b).

insurance companies) and intermediaries gain significant distribution channels at a much lower cost compared to cold-calling or mass marketing (Jenkins, 2004). Cost-effectiveness is similarly a key driver for employers (Jenkins, 2004; MetLife, 2003; Oyer, 2004), however, they experience more significant advantages in talent attraction, retention and being competitive in the labour market (Aflac WorkForces Report, 2018; Dulebohn et al., 2009; Jenkins, 2004; Majid, 2019; MetLife, 2003; Randstad, 2019). Developing employees professionally, physically and mentally affects the company’s brand and performance as well (Guest, 2002; Randstad, 2019; Wein, 2015; Willis Towers Watson, 2019, 2020a).

Worksite programs can also address the changed employee expectations. Employees are no longer satisfied with clocking in and out and receiving a paycheque, they are looking for a supportive, collaborative environment, and an employer that can match their lifestyle (Gallup, 2013). They are looking to strengthen their financial education and position, and employer-provided benefits are a reliable, convenient and affordable method for this. Employees trust their employer has chosen the benefits that best meet their needs thus simplifying their decision (Jenkins, 2004; Leary & Hekeler, 2003; MetLife, 2003).

2.4. Ongoing trends in benefits programs

After understanding the intention of worksite benefits, it is important to see that the concept itself was born in a non-digital era. The user expectations of today have been addressed only partially and mostly in the form of proposals instead of actions. This chapter gives a brief insight into the shortcomings of current benefits program designs and presents emerging solutions.

The probably most pressing issue is communication and access to benefits. Most times, there is no platform for employees to access benefits digitally. Existing alternatives are out-of-date corporate pieces of software and therefore many employers are naming the lack of technology as a top challenge for managing benefits programs (Aon, 2017a; Majid, 2019; Willis Towers Watson, 2020b).

internal communication in a single place (Andrus & Paul, 1996; Aon, 2017a, 2020b; Benify, 2019b; Fontana, 2018; Willis Towers Watson, 2020a).

As many noted, successful benefit access and communication might happen through mobile applications (Aflac WorkForces Report, 2018; Jenkins, 2004; Social Chorus, 2018; Willis Towers Watson, 2020a). The global workforce is becoming increasingly mobile and the majority of employees already use apps for work-related activity (Salesforce & Digital Intelligence, 2014; Strategy Analytics, 2016). Personal access via mobile app eliminates the difficulties of corporate intranets, addresses employees who are not sitting at a desk during work, and matches up in experience to the everyday mobile tools employees are using. (Benify, 2019a; Emergence Capital, 2018; Willis Towers Watson, 2020a).

Other issues concern the variety of benefits for employees. Traditionally, worksite programs have offered stand-alone benefits to address specific issues, however, flexibility is closely linked with employees’ benefits appreciation. Technological advances are removing some of the roadblocks associated with providing greater choice. But offering a wider range of benefits might cause employees to find the financial decisions complex and stressful. A working option might be to provide a small set of manageable choices and limit the range of adjustments as much as possible (Willis Towers Watson, 2020a).

Different needs of employees might also cause a problem in managing benefits programs. Up to four generations may work side by side, and expectations may differ even in the same generation based on e.g. profession or education (Dulebohn et al., 2009; Trias Pinto, 2017; Willis Towers Watson, 2020a, 2020b). Dulebohn et al. argues that benefit preferences change in predictable ways over time with the life-stage of the employee (Dulebohn et al., 2009). Diversifying the benefits offering based on employee segments might boost its performance and return-on-investment (Aon, 2017a; Dencker, Joshi, & Martocchio, 2007; Jenkins, 2004). Aon suggests to segment the workforce according to their differing attitudes and mindsets (Aon, 2017a). Benify offers a solution where the segmentation can be set based on paygrade, position, gender, age and other employee information. It was also expressed that varying benefit offerings by employee segments may present legal issues (Dulebohn et al., 2009).

of them do not know if their benefits scheme meets their objectives (Aon, 2017a, 2018). The lack of data is a key challenge for operating the benefits program, causing practitioners to make their way by trial and error (Dulebohn et al., 2009; Willis Towers Watson, 2020b). Measuring the benefits program’s performance is difficult because current methodologies are complex, costly and time-consuming, and because benefit satisfaction depends both from the content and the used platform (DeVries, 2010; Dulebohn et al., 2009; Williams, 1995; Williams, Malos, & Palmer, 2002). Although technology can offer multiple ways to track engagement behaviours and gain a deeper understanding of employees, surveying and in-person meetings are still the most common ways of collecting feedback. (Aon, 2019, 2020b; Benify, 2019b; Eisingerich, Marchand, Fritze, & Dong, 2019; Servick, 2015; Willis Towers Watson, 2020b)

As Jenkins summarises, “Success of benefits programs is a complex question. It requires

3. Methods

This chapter presents the methods used to analyse the ways of digitalising worksite benefits programs.

3.1. Stakeholder and user interviews

The qualitative research started with exploring the current stakeholder practices and user expectations. From a product design perspective, I found two main stakeholders: intermediaries and employers. Employees were defined as the primary user group. I conducted semi-structured interviews with each of these actors based on my pre-developed guidelines (DiCicco-Bloom & Crabtree, 2006). The interviews were semi-structured because little was known beforehand about the participants’ level of involvement with the subject. It also offered a more casual conversation with participants who are not used to such techniques.

Initially, the interviews were made in-person while later they happened over video call, because of the COVID-19 pandemic. Participants were from Hungary, therefore, all discussions were made in Hungarian and translated to English afterwards. Age of participants varied from 23 to 61 with a median age of 41, 8 identified themselves as women and 6 as men. All conversations were recorded with the consent of participants. Two interviews were made with managers in charge of corporate benefits programs at an intermediary. I formed the interview around the current practices and technologies of managing benefits programs and discussed the expected results and present outcomes. It also included a conversation about communication with employees and how their feedback can be incorporated to improve user experience. Finally, the business and technical requirements of the designed product were clarified.

Six interviews with HR administrators at middle and large-sized companies discussed how they establish, operate and communicate their worksite benefits programs. HR administrators are managing employee benefits programs daily, therefore they could offer valuable insights on the problems and challenges they face with benefits. They are in close contact with employees, therefore we could discuss the feedback and expressed needs of their workforce.

benefits in wellbeing improvement. Questions also touched topics of orientation and enrollment with benefits. At last, we discussed their preferred communication methods and the need for financial advisory.

During the analysis, of the interviews four categories were marked (DiCicco-Bloom & Crabtree, 2006). Categories were first defined as opinions, tasks, past experiences, and

times when things went wrong, and switched with more representative labels later on. The

research continued with affinity mapping to find recurring themes. Finally, the results were cross-checked with the completed literature review to find relations between the global and local benefit conditions.

3.2. Ideation, feature selection and prioritisation

A design workshop was organised based on the gained insights from the interviews. The aim was to ideate around “How might we solve the inconvenience and inefficiencies of

benefits programs by transforming them into a digital product?”. As the question implies,

the workshop used the ‘how might we’ technique to turn the found problems into opportunities (Ideo). The ideas were constructed for each stage of an employee’s organisational journey (Gallup, 2018) to facilitate a design that supports employees in most upcoming situations.

The emerging ideas were once again grouped with affinity mapping, then structured to comparably display the current and proposed benefit practices. By combining the ideas with stakeholder requirements and legal restrictions, they were formed into features. The collected features were stored and organised in a product backlog (Schwaber & Beedle, 2002). The backlog contains every feature that the product will have to include in the first iteration or a future version. The backlog might be updated when new needs come up. The backlog in itself does not help the product development process, because it cannot define an order between the features. The required order and timeline is called a product roadmap and it is essential from both a business and project management perspective (Schwaber & Beedle, 2002). The product roadmap shows a long-term picture of when a team has to work on a feature.

complexity was calculated according to the required design, tech and business development efforts. A similar metric was defined to show the created value for the business and users. In each case the metrics were assigned on a 1 - 5 scale, therefore even if they were not completely accurate, they were correct relative to each other. Finally, the priority was calculated by dividing the created value of a feature with its complexity.

3.3. User journey mapping and prototyping

The features of the first product iteration were selected based on the prioritisation. As a next step user journeys were mapped out for each feature (Howard, 2014). User journey maps help to understand how the users interact with the product through touch-points and activities. User journeys also have an important role in prototyping because they can visualise complex processes in smaller steps. Essentially, the content of these steps can be turned into screen designs later on.

The product prototype was created with Sketch . 1 Sketch is a cloud-based software for designing screens, building interactive prototypes and sharing these prototypes for presentation and testing.

The UI design was built with the design system of the company. A design system contains the look & feel, and also the behaviour of every graphical component used throughout multiple products. Using components from a design system can produce consistent results between multiple collaborators and match the company’s brand.

Utilising a design system is also able to speed up the design process. This single library contains every low-level component such as buttons, inputs or typography. Using these components is equally quick as using wireframe placeholder elements. However, the result would be much closer to a high-fidelity design thus saving the efforts to create the wireframe in-between. High-fidelity designs also yield more reliable results in user testing, because it requires less imagination from the participants (Dexter, 2019).

With the content of the user journey maps and the components of the design system, product screens were designed in high-fidelity and combined into a clickable prototype. The finished prototype was reviewed with expert evaluation by the company’s UX designer. The evaluation used the heuristic guidelines and severity ratings of Nielsen (Nielsen, 1994a, 1994b). The found violations were collected into a spreadsheet with the

https://www.sketch.com

problem’s location, description, violated heuristic and severity rating. The evaluation was then used to improve the usability of the prototype.

3.4. Evaluation

Iterative evaluation and continuous improvements are essential parts of product development. Because the designed product is aimed to be launched to a large number of users, through regional collaborations, it was important to get near real-time picture of performance and usability, under operational conditions. An evaluation framework was designed to help these efforts.

HEART framework by Google was used to find suitable metrics. (Rodden, Hutchinson, & Fu, 2010). This framework helps to determine user-centred metrics for web applications based on large-scale behavioural data, which can be used to measure progress towards key goals and drive product decisions. The HEART system builds up from the following components:

-

likelihood to recommend, and perceived ease of use.

-

or depth of interaction over some time.

-

-

later time.

-

such as efficiency, effectiveness and error rate.

For each component, the framework defines three phases: articulating the goals of a product, identifying signals that indicate the achievement of these goals, and finding specific metrics to visualise progress on a timeline.

4. A design for digitalisation

The upcoming sections present the result of research and consequently made design decisions.

4.1. Stakeholder and user expectations

4.1.1. Employee – the user

Good benefits are matching the life situation of employees

All employees saw benefits programs highly motivating during job selection, however, salary and friendly work environment remained a more important consideration for them. Three participants said that they find the benefits program engaging if it relates to their current life situation. A life situation might be an everyday event like buying new glasses, or a significant occasion as marriage, childbirth or purchasing a new house.

“When I accidentally broke my glasses, it was great I had a discount for replacing them.” (E1)

According to two of the employees, simple access to a wide a range of benefits can offer a feeling of competence and control to them. Five employees trust that the benefits program has been built up by the employer in their best interest and that the included services are suitable for them.

Multiple tasks required to access benefits

It was a shared view between participants that they have to collect information on available benefits and how they can use them. Using a benefit might mean enrolling into group insurance or purchasing individual insurance. In the case of insurance, it is also possible to claim the service. Claiming could be either applying for compensation of a loss or applying to use the service e.g. as a medical examination.

“I know that I have benefits available at my workplace, but I am not entirely sure about what are those and how can I access them.” (E4)

Three participants agreed that the benefits program can be improved if they can give feedback on the services they like and dislike.

“I often write reviews about the things I buy online, but at my workplace, I can only give feedback through my manager.” (E3)

Unsatisfactory orientation around benefits programs

For all six participants, the main source of information (beyond traditional workplace communication) were in-person discussions and conversations with HR or co-workers.

“I once told my co-workers about the appointment I had with the dermatologist and if somebody mentions a health problem, I just recommend the same private healthcare for them.” (E2)

Three of them participated in orientation events before, where a benefit was presented. Five employees who can use online software to manage their cafeteria plans found this solution helpful, however, three of them encountered usability issues. Accessibility is also a major problem because these pieces of software are only available in the company’s intranet.

“I have to use this corporate looking website to allocate my cafeteria expenses every January. It can nicely calculate the before and after taxes sums, but it is really hard to track my available funds or make changes later.” (E5)

Three employees discuss financial services with relatives or friends before using them. ‘Mothers’ tend to possess the ground truth in such questions, and they are often asked for their opinion. Google search and looking up information online are additional ways of gaining knowledge.

A benefit might fail to fulfil its purpose due to the lack of knowledge

Four employees said that they have little information on a benefit if they were not present during its introduction. Access to reliable information is usually difficult because there is no single source where all the available opportunities are collected.

A case was also unveiled where the lack of information caused serious problems.

the available medical services from my co-workers. Even after, I had troubles with applying to an appointment and giving feedback on the quality of the service.” (E6)

4.1.2. Employer

– the

trusted source

Recruiting and employer branding drive benefits programs

HR managers agreed that attracting and retaining the workforce is the most important reason for offering competitive benefits programs.

“There is a huge competition for the best labour, and benefits can provide us with competitive advantage.” (HR2)

Three of them expressed that they aim to make the benefits program suitable for every employee segment and this might demand a wider range of benefits. Four of the managers said that benefits help to build a caring and supportive workplace, that can improve the wellbeing of employees and increase performance.

HR administrators have to manage all aspects of benefits programs

Three HR managers said that they are working on offering up-to-date and relevant benefits to their employees, in order to keep them engaged. These programs have to be communicated to the employees, with additional support if required. All HR managers shared a view that they are not educated to give advisory with financial benefits, but two of them were already visited with such issues.

Employee registration for insurance-related benefits is required when hired by the company. Similarly, employees will be removed from benefits when leaving the workforce. Four managers are looking to address the needs of employees by listening to their feedback and opinion.

No integrated platform to manage benefits programs

According to the participants, benefit programs are either managed manually or through corporate HR systems. Three of them expressed that these fail to efficiently support their work and automate repetitive processes.

“We offer a around hundred different benefits to our employees. They are 2

collected in a four pages long Word document and sent to employees during onboarding.” (HR3)

Communicating benefits on intranets is not effective. Four employers also try to communicate via emails or similar channels (e.g. Google Groups, Skype, etc.) to solve this issue, but in-person discussions and offline materials like posters are still required.

“I see that company emails are often ignored. Therefore communication has to happen through multiple channels to make it effective and to reach as many employees as possible.” (HR5)

“Our intranet has an online message board where we can share new information, but follow up, in-person discussions are usually required as well. However, it is still not possible to reach everybody, so we organise orientation events for the managers and ask them to share the information with their team.” (HR1)

Communication barriers and monitoring caused a bad experience

Five participants mentioned that communication and administration of benefits were listed as the most inhibiting factors for offering a more comprehensive benefit solution. They lack both time and technology to effectively communicate benefits programs for employees.

“The more benefits we have, the more work for us to keep them up-to-date and communicate them to employees.” (HR4)

“We take a closer look at our benefits and salary offer when we see bigger movement in the workforce. In these cases, we usually ask our employees for their opinion.” (HR1)

“Tracking how many employees used a benefit is currently not possible at our company.” (HR3)

4.1.3. Intermediary

–

the owner of domain knowledge and experience

Worksite benefits is a new business opportunity

Both managers agreed that benefit programs offer a significant business opportunity for intermediaries. They are looking for a new source of revenues, due to the decrease in corporate insurance sales and premiums. Benefit programs are an efficient way to reach a large pool of customers through employers, avoiding the high costs of mass marketing and human salesforce.

“I cannot think of any model that is more cost-effective for us than worksite benefits programs. We gain access to tens of thousands of potential customers basically free of charge.” (I2)

Traditional tasks of intermediaries

The first participant explained that the main job of intermediaries are to find suitable offers for the customers, guide them in financial procedures and provide them with advisory when needed.

“To provide guidance and advisory we need a direct communication channel where we can pro-actively advise customers and customers are able to reach us with questions.” (I1)

The participant also mentioned that finding the best offer requires an intermediary to work with the full range of financial services. This often means multiple underlying insurance companies or external partners. From a legal perspective, this has to happen as a pre-broked process . 3

Both managers elaborated that any software they use for distribution and access to insurance services has to comply with the regulations of the Central Bank of Hungary. For

In a pre-broked insurance offer intermediaries can make a single recommendation to customers by picking the best alternative

3

storing their portfolio, intermediaries use stock registration systems. When insurance is sold, the purchase has to be registered in this system. This could either happen manually or through a technical integration.

Long-time experience with benefits programs

Both intermediary already operates benefits programs at multiple large corporations. However, they expressed that without a comprehensive digital solution, the conversion rate and engagement of these programs seem to be low.

“We are hoping that digitalisation could make our benefits programs more attractive. At the moment we are exploring our opportunities to do this in-house or in collaboration with external partners.” (I2)

Legal issues also rose during the conversation. One manager explained that they were not able to operate benefit platforms under their brand. Because they do not have the technological capabilities to own a benefit platform, they had to partner up with an insurance company. However, due to legal restrictions in this partnership, they only get an invisible role.

Manual benefits management can cause inconsistencies

One participant mentioned how the lack of transparent communication and information flow between intermediaries and employers might cause problems.

“Employers have to send the personal information of new employees to us via email and their official registration to a benefit might be delayed due to administrative reasons. This prevents new employees to access benefits right away. The same issue arises for departed employees, where the employer has to pay the price of the benefit even when the employee should not be covered any more.” (I1)

4.1.4. Value-chain and customer analysis

Employees could not be picked for this role, because the whole concept of worksite programs is to attract members of large workforces at once. Based on international examples employers might be a viable entry point, however locally they are unlikely to get into operating the product themselves due to the lack of knowledge and high administration efforts. Insurance companies are passive actors of the value chain. They only supply insurance services and underwriting for intermediaries, and probably unwilling to get into direct distribution themselves.

Intermediaries on the other hand already have experience with running non-digitalised worksite programs. Most employers have an ongoing collaboration with an intermediary, and from a go-to-market perspective, it is not possible to replace these collaborations as a startup. Intermediaries have a more reliable image and they also own a much more powerful business-to-business salesforce. However, they lack digital competences and based on the conducted interviews this creates both performance and usability issues in their worksite programs. Their position and need might offer a feasible market-entry point for our company.

Based on the reasons above, intermediaries were evaluated as the best option for delivering the product offering to employees. Therefore they were chosen as the customers of this product, implying that the success of the product depends on attracting them. Product development has to prioritise their business needs to the highest level, but at the same time, achieve a first-class user-experience for employees through user-centred design principles.

4.2. Product strategy

When the needs of stakeholders were clear, product strategies and related international examples addressing these needs were analysed. Table 1. shows the result of this analysis as a comparison between the considered strategies for the developed product. All three strategies share the concept of personal benefit management, however, they do this from a different approach.

From a product development perspective, the insurance-based benefit wallet was evaluated as the most feasible strategy for the first product iteration. Although the other two alternatives show significantly bigger opportunities for user engagement, they were outside of the company’s core competence and business objectives. To reach the market as soon as possible, the development had to follow lean principles and only deal with the most important features. The two remaining strategies shall be considered again for future iterations.

The selected strategy focuses on the transformation of existing benefits programs by making the included insurance services digitally available and helping users with comprehensive financial advisory. The importance and appreciation of insurance in benefits programs was confirmed on multiples occasions from both wellbeing and a productivity perspective (Benify, 2019a; Willis Towers Watson, 2020a).

4.3. Employee journey map and feature selection

The results of the “How might we solve the inconvenience and inefficiencies of benefits

programs by transforming them into a digital product?” workshop is organised in Table 2.

Each row represents a stage in the employee experience journey (Gallup, 2013).

For every stage, the current benefit practice is coupled together with the proposed digitalised design. The table mentions the major shortcomings of the present practices, and how might the digital product solve these issues.

Table 3. includes the priority of each feature as well. 8 features with highest priorities were selected for design and development. Remaining features were stored in the product backlog and will be revisited during future product development.

Table 1: Discussed product strategies

Strategies extend each other from left to right, with the most comprehensive strategy on the right.

Insurance-based benefit wallet Full-service benefit wallet Employee engagement platform Description A platform for insurance

purchase and enrollment. Employees are able to access a variety of insurance-related features in one place.

Insurance and non-insurance benefits are collected in a platform. Discounts and coupons are available for employees.

Every benefit and employee communication in one place. All processes of employers are digitalised and available in a single platform.

Key features

- Purchase insurance through an on-brand digital

platform.

- Manage purchased insurances in the same platform.

- Claim management.

- Access to consultancy.

- Customer profile storing all relevant information. - Employees feedback on benefits. - Access to discounted services. - Opening of bank or telecommunication accounts within the platform.

- Book and register available services at the workplace (massage, workout, advisory, etc.)

- Communication between the employer and employee.

- Employee feedback.

- Total reward statement.

- On- and offboarding.

- Manage vacation days.

- Support personal development.

- Manage flexible work schedule. Similar solutions - HealthJoy - BeniPlus - AccessPerks - Corporate Benefits International - Benify - Zenefits

Challenges - Insurance on its own might not be attractive enough to keep users engaged.

- Intermediaries are currently not interested in managing non-insurance benefits.

- Lack of domain knowledge.

- Product is offered to

Table 2: Employee experience journey and benefit practices

Current related benefit practice Proposed digitalised benefit practice Attract talent No central repository or communication

of employee benefit services.

An overview of the employer’s benefits program is publicly accessible. This supports the positive employer brand and attracts top talent.

Hire All employees receive the same benefit package, not taking into account the varying needs.

Based on the employee’s profile and position, HR places the new employee into different segments. The segments will determine the available insurance services for the employee and ensure their suitability. A customer profile stores all relevant information of the employee.

Onboard Registration of employee for benefit services happens manually via e-mail communication between employer and intermediary. The time of registration is non-deterministic, employees might be uncovered for some time.

Employee automatically gains access to the personal benefit wallet and all benefit services when registered in the employer’s HR system.

Group insurance coverages are instantly activated after a simple enrollment. Engage No central repository or communication

of employee benefit services.

Access to benefits varies based on their type and provider. The insurance purchase process is not optimised.

Worksite benefits are easily accessible through the personal wallet. Employee always gets the single best insurance offer based on their needs. Available insurance policies and claims are managed in the same place.

Perform Feedback on benefit services is not collected systematically, only by

occasional discussions with HR. Range of benefits is fixed, their performance is not evaluated.

Usage metrics are collected and the performance of benefits are evaluated. Benefit offer might be updated to drive better results.

Employees are able to give feedback on the benefits program to the intermediary. Develop There is no direct communication

between the employee and intermediary, personal advisory is not available for employees.

Intermediary supports the employee’s financial, mental and physical wellbeing with consultative services.

Depart Removal of employee happens manually via e-mail communication between employer and intermediary. The time of removal is non-deterministic, employers might have to pay the insurance premium of a departed employee for some time.

Table 3: Features, priorities and selection for the first product iteration

Feature Origin Priority Selected Comment Authentication and account

activation

Basic system requirement 5 ✔

Employee profile management Basic system requirement; Interviews

5 ✔

Travel insurance recommendation, purchase, and management

Interviews; Aon, 2017a 5 ✔

Home insurance recommendation, purchase, and management

Interviews; Aon, 2017a 4 ✔

Motor third party liability insurance recommendation, purchase, and management

Team input; Interviews 3

Motor casco insurance

recommendation, purchase, and management

Team input 2

Health insurance enrollment, purchase, and management

Interviews 4 ✔

Accident insurance enrollment, purchase, and management

Interviews 1

Income protection insurance purchase, and management

Interviews 3

Pension savings account management

Benify, 2019a; Willis Towers Watson, 2020a

1 Extreme legal and implementation complexity Start new claim from an existing

insurance policy

Interviews; Aflac WorkForces Report, 2018

4 ✔

Track and manage claim processes Team input; Benify, 2018a 3

Non-claim service usage (e.g. booking doctor’s appointment from health insurance)

Team input 3

Messaging based communication with an intermediary (customer support)

Interviews; Willis Towers Watson, 2020b

5 ✔

Pro-active consultative advisory Willis Towers Watson, 2020a; Ferrari, 2016; Aflac WorkForces Report, 2018

4 The feature was designed but not yet implemented

Employee feedback on a benefit service

Interviews; Andrus & Paul, 1996

4.4. Prototype and heuristic evaluation

4.4.1. User journey maps

The design of the selected features started with user journey maps. A user journey map displays the detailed interaction between the user and the product. An example of user journey maps is included in Figure 2. This map shows the process of managing a travel insurance benefit from opening the wallet and finding the desired benefit until the insurance is activated and later claimed as well.

Figure 2: User journey of purchasing and managing a travel insurance benefit

4.4.2. Prototype

The user journey maps were used in the high-fidelity design of screens. The screens follow a mobile-first principle, with additional desktop versions for a showcase.

requirements as well. It is also worth to mention that insurance distribution consists of standard steps, that is currently not possible to change in the local environment.

The screen designs were built together into a clickable, interactive prototype. The prototype together with feature descriptions is a development-ready specification for the technical team.

An example of the prototype displayed in Figure 3. These screens show the process of purchasing a travel insurance benefit according to the user journey in Figure 2. To ease the decision of the user, the prototype always advises a single best offer based on the user’s preferences. This insurance offer is presented with an easily understandable and comprehensive description. When the insurance is purchased, it is available in the user’s insurance wallet together with a messaging feature to access expert advice.

Figure 3: Finished screens of the prototype

4.4.3. Heuristic evaluation

Missing design for different states of a screen (e.g. loading, empty, disabled) was another common problem.

Wording and content of descriptions were a thoroughly discussed topic. The design was aiming to avoid complex legal texts and display insurance offers in an easily understandable way. In some cases, texts were forbidden to change due to compliance restrictions and these violations remained in the design.

According to the results, the prototype was revisited and the found violations were corrected.

Table 4: Results of heuristic evaluation

Location Description Violated heuristic Severity

Insurance recommendation

‘Quote’ and

‘Recommendation’ used simultaneously.

Consistency and standards Cosmetic problem only

Insurance recommendation

Missing back button and guidance when

recommendation fails.

Help users recognize, diagnose, and recover from errors

Major usability problem

Addon configuration

Loading state is not displayed when the price is updating.

Visibility of system status Minor usability problem

Addon configuration

Addon coverage is not accessible.

Recognition rather than recall

Major usability problem

Addon configuration

Format of the license plate is not validated.

Error prevention Minor usability problem

Travellers info Birthdate is not auto-filled for the policyholder.

Flexibility and efficiency of use

Minor usability problem

Travellers info Exit from purchase process is only possible through going back every step.

User control and freedom Major usability problem

Payment Missing retry button when thepayment fails.

Help users recognize, diagnose, and recover from errors

4.5. The structure design of the product

Product development does not end with designing a prototype. Operational, monitoring and future improvement aspects have to be taken into consideration as well. The remaining three sections present the design results of these activities.

Williams et al. conceptualised that employees experience and appreciate benefits programs in two dimensions (Williams et al., 2002). One dimension relates to benefit level, reflecting the value of benefit plans (e.g., levels of coverage). The other dimension is related to employee perceptions of the system used to deliver such benefits (e.g., communications, ease of use).

When the product was designed it was important to define the building blocks and responsibilities to fully understand how the product will work in real-life conditions. Following the two dimensions of Williams, the product was split into two main components. The first dimension is called ‘content’ and the second is referred to as ‘platform’.

During the prototyping phase, the design was focused on the platform, but the integration between the content and platform is just as important. Although the prototype included screens for insurance distribution features, these designs have to be revisited before implementation because each insurance service differs in implementation and compliance. This means that the design of the platform cannot be completed without knowing the content. So how it is possible to get the content of the product?

As mentioned in the customer analysis section, the developed product will be operated by an intermediary. It follows that the included benefit services - the content - will be provided by that intermediary. Therefore the content will not be permanent, it will change with every intermediary and also with every employer. It also implies that to sell the product to customers, many features have to be ready even before knowing who this customer is and what content they are planning to include.

In order to resolve this contradiction, the product was designed in the following way.

The platform by default includes all features that are not directly related to insurance services. These are displayed in Figure 4. under the ‘core features’ section.

of insurance services have different requirements, but requirements might also differ based on the underlying insurance companies. However, this is where the strict regulations of insurance distribution turn into an advantage, and support product development. The

requirements of insurance services might be different, but due to the regulations and

standard processes, the structure of the requirements will always be the same.

This interesting consequence creates an opportunity to design and develop the insurance-related features as well, until about 85% of readiness. At this stage, the product can be showcased and sold to intermediaries. After an intermediary selects the desired content through their pre-broking process, the remaining 15% can be delivered as well by integrating the included insurance services.

4.6. Evaluation framework

Probably the most difficult question during product development is answering whether it will reach success or not. The success of a product will never be 100%, however, its chances can be significantly improved when the product’s performance is continuously evaluated and used in future product development. For this entirely newly developed product, it was essential to create a framework that is able to provide feedback on the product’s usability and performance during live usage. Based on this information, design decisions can be evaluated and future decisions can be made. As showed in the previous section the product builds up from two components, the platform and the content. During the design of the evaluation framework, both of them had to be considered separately.

Furthermore, monitoring of employee interactions offers essential information in the platform’s development and in achieving user-centred design. It also offers valuable feedback on the success of the digitalisation process, as well on the validation of user needs.

The framework of this monitoring is built on top of the HEART methodology and it is displayed in Table 5. It is worth to mention that product goals include aspects from both content and platform components because from a user perspective it was not always possible to separate these two. According to the HEART methodology, the goals are broken down to signals, able to indicate the achievement of a goal. The signals are derived from metrics, the actual interactions to be measured in the product. When implemented the metrics can be visualised in a dashboard and analysed by different periods, frequencies and aggregations.

Based on my view this framework will provide the company with valuable statistics and offer a reliable way to evaluate the product under realistic conditions.

4.7. Product development framework

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.

Table 5: Product evaluation framework

Goals Signals Metrics

Happiness Employees find the platform helpful, informative and easy to use.

- Responding to in-app surveys

- Leaving user feedback after using a benefit

- Leaving a 5-star review

- App referred to co-workers

- Net promoter score

- Customer satisfaction rating

- Number of 5 star reviews

- Referral rate

Engagement Employees enjoy platform content, benefits and keep engaging with it.

- Opening the app frequently

- Spending a longer time in the app

- Browsing and checking the details of benefits

- Average session length per user in minutes

- Average session frequency per user in days

- Average screen per session

- Total active days per user

- Display and conversion rate of a benefit

- Abandoned purchase flows

Adoption New employees see the value of the product.

- Downloading the app

- Activating employee profile

- Enrolling into a benefit

- Download rate

- User activation rate

- Bounce rate Retention Employees keep

coming back to the platform, to use the benefits. - Renewing a benefit - Repurchasing a benefit - Renewal rate - Repurchase rate - Churn rate

- App uninstall rate Task Success Employees complete

their task of accessing benefits quickly and easily.

- Searching and finding the desired benefit

- Enrolling benefit easily

- Asking for an insurance offer

- Purchasing insurance from the offer

- Reporting and managing claims

- Crash or error rate

- Successful / unsuccessful search for a benefit

- Successful / unsuccessful insurance offer rate

- Successful / unsuccessful policy purchase rate

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.

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.

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.