A change in context provokes an internal movement

Traditional insurance markets have been suffering a setback by reason of new business models such as peer-to-peer, on demand, pay as you go, as well as due to innovative interfaces and other touchpoints that inflict less friction to the user journey. Insurtechs have had a big share on this market shift - similarly to what happened in the financial market with the fintechs - and have been pushing traditional insurance providers to keep-up with the new players.

Take care to transform claims the essence of this Brazilian insurance provider that has more than 29 years of experience, 6 million clients nationwide mainly in the health but also in the general insurance market, 1.200 employees and revenues of US$ 815 million in 2018. The organization is part of the biggest cooperative medical system in the world and together serve 18 million clients through 117 own hospitals, 2.554 accredited hospitals, and 346 health cooperatives spread throughout the country accounting for a participation of 37% in the Brazilian health insurance market.

When understanding the need for change over the challenging future, in August 2016 the Board of Directors, with the participation of one Independent Director and under the leadership of a new Superintendent launched the Go Digital project aiming to transform internal processes and innovate its offerings and services. Given the failed initiatives from previous years, this leadership had no strings to the past and embraced the challenge.

Service design enters the scene

With the support of a service design consultancy firm and an external specialist in start-ups, technology and newer business models, this initiative brought the design approach, tools and methodologies to the C-level aiming to define a strategy and pave the way for innovation.

In order to broaden the project team’s understanding over the challenge and to serve as the basis for the co-creation of a new strategy, the service design consultancy took three initial steps: (1) desk research, both on local and global trends which was a starter for a specific study over the insurtech movement and its players; (2) in-depth interviews with insurance users, brokers and internal collaborators to thoroughly understand their views on this type of service; (3) collaborative deepening sessions.

They conducted user interviews to understand this audience’s expectations and pain points on digital services and their contracted insurance. In addition, to get new insights from this type of service, clients from other insurance providers and holding different kinds of products were interviewed, but also those who had never contracted any type of solution for this need. These people were selected according to their relationship to the behaviors presented at the User Typology. The following are the main insights obtained in this process.

An insurtech and new technologies scenario was portrayed, where insurtechs were identified to have transformed the way classic insurance processes are handled. The entire traditional value chain in the sector has been rethought by these organizations, such as risk assignment, reinsurance, claims management, etc. They draw solutions around points of insecurity and unpredictability, not necessarily clinging to traditional business models. In general, we understood that insurtechs operate according to four specific principles.

Millennials were then already responsible for the decision of purchase of 30% of direct sales on the planet, with the expectation that this number would grow exponentially in the coming years. Furthermore they have grown accustomed to digital, therefore, have needs and expectations that traditional companies are far from meeting such as agile solutions. So it was essential to the project to have an in-depth understanding of how this generation compares, evaluates, contracts, recommends and uses insurance services. A collection of eight behavioral traits that would potentially impact the insurance, health, protection and pension market in the upcoming years were also consolidated and presented

Clear views of the future and defined means to reach it

These inputs were used in three working sessions with the C-level, who defined four strategic goals to be reached by 2020 along with a roadmap of projects for the development and improvement of offerings and solutions in alignment with these goals:

• The organization consolidates itself as a B2B2C Digital Service Platform, specialized in care, welfare, protection and prevention.
• The operation, previously seen as digitally outdated, is now a reference in digital transformation.
• This Platform is a source of information, content and generation of business opportunities complementary to the Cooperative System, positioning it as a reference in the country for its offerings.
• The organization becomes a pioneer in the development of the insurtech concept in the country, innovating in the insurance industry standards, creating new fronts of business based on the digital behavior of Brazilians.

The aim was to become a pioneer in the development of the insurtech concept in Brazil thus develop digital solutions to reach better operational processes and relationships with customers and stakeholders, and generate new business in the forthcoming years. However, the organizational culture, structure and legacy were not that of an insurtech and would pose challenges.

An important pillar to reach this strategy was the Innovation and New Business Cell, that was formed in March 2017 as a long-term project once again with service design as the main approach. On a bet to overcome these challenges, Stormia (the way the innovation cell was named) was made of a hybrid team of internal and external people in a triad of perspectives: business (the organization, assisted by a fully dedicated external consultant), design (the service design consultancy partner) and technology (a development partner).

In the short term this composition has been essential to propose and implement relevant, profitable and feasible solutions, and moreover to impact the organizational culture which will in the long run ensure the maintenance and success of the work.

In the pursuit of the strategic goals, the Stormia team has been working on three fronts with a focus on pilot projects that are continuously improved and enhanced:

• Redesign the current digital services;
• Internal related-projects acceleration;
• Development of new businesses and partnership.

The first step, still in 2017, was to deepen our understanding of the user journeys mapped in the Go Digital project and expand it to the other actors in the ecosystem with the objective of understanding the wants and needs and extensively map the touch points and barriers of all these actors.

In-depth interviews and workshops were conducted with beneficiaries, corporate clients and insurance brokers of health and protection insurance and pension, doctors, dentists, administrators and staff of medical and dental clinics. As a result we mapped eight user journeys that are of thes five main actors: beneficiaries, corporate clients, health providers, health specialists and insurance brokers.

Although some information might have been previously known to internal stakeholders, its consolidation indicating internal and external touch points, physical evidence and perception of positive and negative experience brought them a whole new perspective and value to user journey mapping. They wanted to have access to our take-aways and we wanted to share them:

• It became clear that beneficiaries perceived the five main offerings as two primary lines named by the service designers as Health Care and Financial Protection, which together resulted in Life Care. This approach was well received by the organization for it made a lot of sense and was aligned with the organizational goals for 2020.
• All five actors involved in this study perceived the insurer as retrograde and bureaucratic and for that, whenever possible, opted for other alternatives.

Both take-aways posed great opportunities in developing a clearer value proposition and better offerings and relationships with these stakeholders, apart from other opportunities that were identified and brought up as challenge statements in each user journey to be further prioritized by the business.

The development of a new offering in a new framework and the positive impacts throughout the organization

This prioritization led to a roadmap of projects for Stormia that would result in the offering we would like to deliver: in contrast to the more than 120 mobile apps mapped within this cooperative medical system, with little relevance to users and their health, Stormia would work on a simple and single platform with purpose, that we call a “digital ecosystem of shared value”, based on the cooperative principle of intercooperation that assumes that all should benefit directly and collaboratively from the results. The platform will be the place and the means for promoting collaborative innovation, quality of life and financial protection for people, and will be open and participatory.

We recognized that beyond the platform, another important legacy would be the positive impact on culture, work methodologies and ways of doing business for the whole organization.

Seeking these objectives, we designed a specific ‘service design’ framework, which we have been improving and adapting in order to bring new users and collaborators to co-create, prototype and test ideas that are then developed into a minimal viable product (MVP) and tested with selected audiences through pilot projects before being iterated and made available to the market.

From October 2017 to March 2018 we ran four Design Sprints in an adapted format that allowed collaborators to engage and participate over four days, and further introduce the methodology internally. The results of this engagement were very positive and little by little customer-oriented Technology and Mobile solution projects of other areas started implementing the framework.

Thanks to the better understanding of the user journeys, digital channels for clients, partners and employees could be improved, and we have also seen a better integration between areas, which have traditionally worked in silos. The I.T. department, as an example, created an Agile Cell initially to meet the demands generated by Stormia, and promptly noticed the benefits of working this way in its own and other opportunities.

During 2018 Stormia tested seven different MVPs, all related to this new simple and single digital platform to users that is due to be completely integrated in 2020 and by October 2021 our expectation is to have reached 6 million users with US$ 30 million revenue per year on top of the actual business revenue.

Apart from the new technology that counts with a modern and flexible architecture, this solution broadens the offerings and enriches the value proposition of a traditional insurer to include long-term and related wellness, health and financial solutions in a B2B2C model, where B represents medical and corporate organizations and C the final beneficiary.

Afterall, the essence remains the same but the organization is finding new ways to deliver by responding to users’ needs, wants and expectations while transforming itself. Service design as Stormia’s main approach has a vital role in this transformation: service designers leading the generating solution process, bringing stakeholders and users needs into perspective, focusing on well defined challenges and applying Scrum, all which brings faster outputs and minimizes risks while running in parallel to the current conjuncture agenda.

Initially, given the culture, structure and legacy in place, it was a challenge to run this way, however it has been gradually impacting the organization’s means of doing things. Every day the organization is one step closer to being a user oriented health-insurtech and further away from the brick-and-mortar it used to be, ready to survive in the digital arena