Paramount: Service Design for Tesco Bank

Imagine an insurance renewal process that drives loyalty

Tesco Bank partnered with Modern Human to increase the likelihood of existing customers renewing their insurance. The result was a strategic service redesign that builds trust and deepens the unique relationship with the customer by putting their needs and experience at the heart of the process, whilst empowering colleagues to handle customer calls quickly and effectively.

Consumers do not trust insurance providers. Financial services scored just 54 on the Edelman Trust Barometer in 2018, with insurance receiving the lowest trust rating of all within the financial sector. To put that into context, the technology sector received the highest trust rating of any industry at 76, despite a number of recent fake news and privacy scandals. Tesco Bank’s Design Practice partnered with Modern Human to redesign insurance renewals based on a deep understanding of the origins of this lack of trust, and its impacts on the psychology of customers when choosing and renewing insurance products. They wanted to understand the value that customers place on insurance products, what the most important factors are when choosing an insurance provider, and what the psychological impact of the claims and renewals process is. They also wanted to develop a deeper and more nuanced understanding of both the customer and colleague experience whilst redesigning insurance renewals.

Our award-winning service designers joined forces with the Bank’s own design team and members of a variety of departments at Tesco Bank before setting off to conduct extensive design research into home insurance and car insurance using a variety of ethnographic methods. This type of research explores the experiences of people in their everyday context, and allows us to develop a nuanced and detailed understanding of the drivers behind people’s behaviour. Throughout this process we were focussed on the familiar; the routines and practices that people have developed when choosing insurance products; on uncovering “the magic in the mundane.”

Running a series of in-home interviews all over the UK with current home or car insurance customers allowed the team to explore their experiences in more detail. During these interviews we asked them to give us a guided tour of their home or car, so we could understand what they were insuring, the value they placed upon it, and how this impacted their behaviours. We discussed their attitudes to insurance and explored their expectations and experiences.

We also carried out a series of interviews with customer service representatives working on the insurance team. These interviews allowed us to develop our understanding of the process from the CSRs perspective, as well as how this could be improved to enable them to serve customers more effectively. To build on this we facilitated a series of codesign workshops, where CSR colleagues were invited to look at various elements of the current process. This helped frontline colleagues to get directly involved in the process rather than just being told about outcomes at the end of the project.

From our research, we developed a highly detailed understanding of the decision factors, drivers of behaviour, needs and motivations of customers. We observed the psychological impact of making a claim and how this process alters the relationship between the customer and insurer, impacting the way they make decisions during the renewal process. We also understood the lack of trust customers feel for all insurers and how this influences their behaviour, as well as the different ways that pricing drives behaviour at renewal.

Having thoroughly analysed our design research findings, we were able to create a service design that would significantly improve both the customer and colleague experience of the insurance renewal process. Combating the lack of trust consumers feel for insurance providers was at the heart of our recommendations - we wanted to create a process in which customers both understand and feel understood; in which they feel that their insurer is their ally, not an adversary that they need to haggle with. A redesigned communications strategy took account of the psychology at play whilst providing cues to help customers recall positive proof points and reinforce that the Bank really is on their side in the event of an accident.

We also designed a stronger digital experience with improved access to self-service tools. Our research highlighted that a significant proportion of calls were from customers needing to update minor policy details or cancel their policy. Creating a stronger, more fully-featured online portal allows customers to amend their details quickly and easily, simultaneously making it more convenient for the customer, and freeing up staff time to provide better service to customers who require more in-depth assistance.

A reduction in the cognitive load of colleagues was key to our recommendations for improving the colleague experience. Simple modifications to their current I.T. systems could facilitate this decrease in cognitive friction, helping CSRs to provide better customer service and reduce overall call time. Simplified systems would also allow for a shift in the focus of colleague training, with an increased emphasis on ensuring CSRs feel confident and empowered to handle changing call demand.

As part of the reimagined service design, we created a comprehensive experience map to plot customer interactions in the new process. This included a timeline of customer communications, from a reminder that their renewal is imminent, all the way through to a renewal confirmation.

Results from service pilots strongly indicate that there are customer and business benefits from our service redesign. Customers have a better understanding of their insurance, can more easily compare their current policy with renewal prices and accept or cancel their renewal. From the bank’s perspective renewals increase, cost to serve non-renewals decreases and front-line staff can focus on situations where they can add the most value. Tesco Bank are currently working to implement our renewals service redesign so we expect to have results to share soon.