I have found an interesting blog written by Sam Medina who is involved in advising insurance companies on how to implement transformation. Here is the link to his post on transformation in the product development process http://www.insurancenetworking.com/blogs/transformational-thinking-in-product-development-tcs-33843-1.html. The article as a whole is not entirely applicable to the product design process but he raises some interesting points. Medina claims that insurance companies are not meeting consumer demand through their more traditional products. He defines two thought processes, legacy thinking and transformational thinking. He classifies legacy thinking as situations where the company uses and drifts towards ideas that have been proven over time to be successful. Essentially the company has found a safe zone where they know they can succeed and they do not want to leave this safe zone. Where as, transformational thinking focuses on how the company can be changed for the better e.g. can we improve our systems to meet the demands of the consumer. My view is that transformational thinking is essentially thinking out of the box to meet the consumers needs. The image below is how Medina explains the two thinking systems:
I think that it is important that insurance companies adapt to meet the needs of consumers as these needs change but it is still important to maintain the traditional products both as this provides familiarity for some customers and as they have been proven to be profitable and can be used to support new products. An example that we have seen recently is Old Mutual’s burial society plan (details can be found here: http://www.oldmutual.co.za/personal/funeral-cover/burial-society-support-plan.aspx ) Old Mutual recognised that a portion of the funeral cover market still chose to self insure and instead of trying to move them into existing traditional funeral policies Old Mutual created a platform which they could use to formalise their existing arrangements. In the discussion in the tutorial we recognised that these self-insurance groups exist to fill a need greater than just the insurance role (e.g. burial societies would provide support for the family and help the family organise the funeral) and that Old Mutual benefited in recognising that this need existed. This is just one example but I’d be interested to hear of other interesting insurance product designs that may be around, has anyone found any recently? Also, in the South African market, are there any needs that insurance companies are completely over looking that a new product design could meet?