Human-Centered Design Is the Evolution of Life Insurance

Jennifer Smith

“The information environment has changed dramatically over the past 20 years, and human-centered design emerged as a counterbalance to the rapid pace of technological advances.” [1]

At its foundation, everything about the life insurance industry is driven by humans – real people. While technological advances in policy administration systems, underwriting workbenches, actuarial models, and claims systems are critical to operational efficiencies and risk management, it is people who are at the heart of this industry.

Despite the obvious fact that life insurance was originally designed to protect real people and their loved ones, the industry has for too long suffered from the perception that its primary activities are to operate processes and serve company goals. The fact is that insurance companies are businesses, and profitable businesses keep the lights on and more importantly, make investors happy. However, as technology advancements continued, the life insurance industry investment in technology didn’t always follow due to price concerns. As a result, the industry began to fall further behind in meeting internal and external customer needs. Fast forward to the mid-2010s and on, and we see a number of disparate but interconnected factors that render the status quo obsolete. Among these are improved technology, a younger customer base with expectations of immediate, personalized service, and accelerated timelines for product development. And it is not just about the impact of younger customers’ habits; even grandparents are ordering from Amazon now and their expectations have also changed. Our world has indeed radically transformed.

Human-centered design methodology provides the life insurance industry the ability to solve the complex challenges faced by crucial yet vastly different audiences, such as distribution channels (IMOs, brokers, and agents), policyholders, the insured, underwriters, customer service representatives, and, of course, beneficiaries, to name a few. Organizations that adopt and embrace the empathy inherent in human-centered design as part of their technology and digital transformations may create a competitive advantage to solve these challenges and the problems faced by their customers.

Human-centered design emerged in the late 20th century as a counterbalance to the rapid pace of technological advances. Human-centered design is not an alternative to traditional engineering or technological systems-design processes. Instead, it is a problem-solving process that enables organizations to identify, analyze, and solve challenges inherent to an operational environment that is volatile, uncertain, complex, and ambiguous all at the same time.

Organizations that embrace human-centered design to solve complex challenges embark on a journey that has three primary phases:

  1. Defining the environment
  2. Describing the opportunity, and
  3. Designing the solution.

Design teams use these three phases, and the associated steps, to fully understand the problem at hand before identifying gaps and exploring solutions.

Potential solutions can be grouped into seven principal categories:

  • Process, procedures, and policy (P3)
  • Organizational structure
  • Training
  • Facilities
  • Leader Development
  • Technology
  • Personnel

Human-centered design teams operating from the above categories will prioritize solutions based on the greatest impact that they have on the needs and wants of users and stakeholders.

For life insurance, human-centered design carries the potential to be a major evolutionary (if not revolutionary) step in improving the experience of users, leading to faster and better product development, increased customer loyalty and retention, overall significantly enhanced customer engagement models, and an improved bottom line.

For a more thorough examination of the topics discussed above, read the white paper “Redesigning the Life Insurance Journey: Human-Centered Design for Complex Challenges,” prepared for Sapiens by Aité Novarica.

Learn more about how Sapiens powers transformation for Life insurers.

[1]Redesigning the Life Insurance Journey: Human-Centered Design for Complex Challenges,” Aite-Novarica, November 2022.

  • life and annuities
  • life insurance
Jennifer Smith

Jennifer Smith Jennifer is Sapiens VP of Life Product Strategy, responsible for the direction and roadmap of Sapiens digital suite of core solutions and eco-partners that support L&A insurers in the North American market. She started her career working for a large life carrier for several years and then moved into the software side. Jennifer held positions, prior to Sapiens, at EDS SOLCORP (now DXC Technology), SunGard, and Majesco, focusing on life insurance systems transformations and business process optimization for nearly 25 years.