Pilot study II

Background information

The underlying idea behind the paper was created on the basis of the first pilot study by being aware that competitors within the insurance industry have become more versatile in

4 This chapter is based on a conference paper published in the proceedings of International Conference on Electronic Business in 2005 (Ahonen and Windischhofer 2005). Therefore, the paper is not constantly re-ferred except in those situations when it is directly cited. However, the references used in the article are naturally cited as such also here. The title of the paper is: ““The Web Performance of Different Types of Online Insurance Providers – A Wake up Call to Traditional Insurance Providers”.

electronic (Internet) service environment. More precisely, newer types of insurance service providers have recently appeared alongside the traditional types of insurance companies possessing a long history of having a physical distribution channel but also having trans-ferred their services to the Internet. This kind of development is apparently perceivable at least in British, American, and German insurance markets.

Although the distribution channel history was not perceived as the most relevant in-dicator for the usability of insurance Web sites, the idea of concentrating on investigat-ing and comparinvestigat-ing the essential characteristics of electronic services of different types of insurance providers from usability point of view more thoroughly was found particularly interesting. This was mainly due to the fact that this type of study had not been carried out before. At least no studies referring to the issue positioned above could be found.

In the beginning of the study few pre-assumptions were made. First, it was assumed that in order to be able so succeed in the electronic service environment, certain skills for operating on the Web are required of the service providers. These kinds of skills (experi-ence in doing business on the Internet) were assumed to be better handled with new en-trants, referring to company types 2 and 3. However, as the first pilot study revealed, the newer types of companies might have shortcomings in their skills when it comes to insur-ance business activities which are, without a doubt, well possessed by the type 1 companies (traditional insurance providers).

Hence, the same three types of insurance service providers generated through the first pilot study (traditional insurance providers, online insurance providers, and idiosyncratic insurance providers) were maintained in this study, too. However, in this study three Brit-ish insurance service providers, each representing one of the three company types were selected as target companies. British markets were chosen since, according to the results of the first pilot study, UK was considered as the most advanced electronic insurance market in terms of usability. Further, all three company types can be found from the Bristish mar-ket. List of the investigated companies can be found in the appendix 3. The main criterion for choosing the companies was that they represented the best performer in their company type in the first pilot study.

All in all, the main purpose of the study was to compare the performances of different types of insurance service providers on the Web from usability point of view. In addition, another interesting aspect to be investigated was “to assess whether the companies have a new approach to online insurance, and how these companies – and the insurance industry in general – could benefit from that approach” [directly cited from the article].

Usability attributes

One fundamental reason for investigating the usability of corporate Web sites, which was addressed throughout the study, was referring to the fact that if the Web site is of low usability the customers might be required to switch the service channel in order to do business with a service provider. Naturally, this kind of issue does not increase customers’

intentions to operate in the electronic channel.

In order to develop a framework for evaluating the usability of electronic services in insurance context, the implications of the first pilot study were considered. Since analyz-ing the suitability of certain usability attributes to insurance context was only narrowly and more generally discussed in the first pilot study, earlier literature on usability research was scanned again to sharpen the focus of the research and in order to be able to develop a framework for evaluating the usability of electronic insurance services. In this regard, the usability framework introduced by Scharl and Bauer (1999) containing three usability attributes was considered relevant for insurance context. These three usability attributes are: content,navigation, and interactivity.

In the following three paragraphs these three usability attributes are characterized more in-detail. In order to strengthen the argumentation presented in the article, which is mainly based on the framework by Scharl and Bauer, the following discussion is supported by also adding the insights of other researchers (not discussed in the article⁵) referring to these three usability variables.

First of all, it is particularly important that customers really understand the content of the electronic service environment in which they are operating. It is important that information on the Web sites is presented in a clear form, and that there is not too much information available on the Internet because it might only cause confusion among cus-tomers. Therefore content (e.g. Scharl and Bauer 1999; Palmer 2002; Flavian et al. 2006;

De Wulf et al. 2006) can be considered as one key feature of Web site usability especially in the context of complex services, such as insurance. Content refers to the amount and nature of the information available on the Internet.

Further, it is even one of the prerequisites for the use of the electronic services from the customers’ point of view that it is easy and clear to move in the electronic service en-vironment. In the complex service context this is even more important because otherwise customers might feel the service environment is too complex to use – it is already complex enough to try to understand the features of the (insurance) products and services. Thus, navigation (see also Nielsen 2000, Flavián et al. 2006) can be considered as a crucial fea-ture. Navigation refers to how easy it is for the customers to move, browse, search, and access information on the Web.

5 See appendix 3.

However, if the customers still end up in difficulties in electronic insurance service environment, be those difficulties then a consequence of the complex nature of the service or the service environment, it is essential to the customers that they can communicate interactively with the system and get assistance if needed. Hence, interactivity (e.g. Jär-venpää and Todd 1997, Scharl and Bauer 1999) is also one of the most crucial Web site usability attributes in the complex service environment. Interactivity refers to the ability of the environment to communicate with the customers (e.g. through e-mail, online chat, telephone etc.).

Research methods

The nature of empirical study is mainly qualitative. The methodology of the study was a combination of heuristic evaluation (Nielsen and Mack 1994; Nielsen 1993), which can be considered as one of the most used usability evaluation methods, and grounded theory ap-proach (e.g. Glaser and Strauss 1967; Strauss and Corbin 1990) emphasizing the inductive theory generation based on empirical data. At this point it is essential to distinguish be-tween objective ease of use and perceived ease of use (Venkatesh and Davis 1996): “While the objective usability is determined by the systems’ usability features, the perceived us-ability also depends on the individuals’ proficiency with the system” [directly cited from the article]. In this regard, usability was approached from the consumer’s perspective.

The Web sites of the selected three British insurance companies were evaluated by a group of 28 students. The quality of responses was discussed in the article as follows [di-rect citation from the article]: “As to the quality of the results the aim was to get as compe-tent responses as possible but, on the other hand, the responses should also represent the opinions of consumers. Therefore, the participants were chosen from a group of university business students with insurance science as their major subject”.

The empirical data was collected by arranging two distinct data collection rounds.

The first data collection was conducted in November 2004 including 9 participants. The second data collection round was conducted in February 2005 including 19 participants.

The evaluation contained altogether four phases which comprised: 1) open questions on the attitudes towards electronic insurance services; 2) Free browsing and review about the performance of the companies; 3) set of tasks related to home insurance; and 4) Re-evalu-ation about the performance of the companies.

From the perspective of reliability of the study, all 28 students evaluated the perfor-mance of all three companies. Thus, altogether 84 evaluations were included in the em-pirical data of the study. In addition, data triangulation was used. More precisely, it was desired that each company will be equally evaluated by the research participants. There-fore, three different evaluation orders were formed in a way that each company was evalu-ated as first, as second, and as third by, approximately 12 students.

The collected data was analyzed by using software called NVIVO, which is designed to handle qualitative, non-numerical data. The grounded theory approach was applied to analyzing the data.

Essential results

In the paper theoretical and empirical results were discussed separately. They are presented in the same manner also here. As to theoretical results, two additional usability attributes relevant to insurance context were suggested. These are: appearance and assistance.

First, it is proposed that a good graphical design and layout make the electronic ser-vice environment easier for the customer to use (e.g. Henneman 1999; Parasuraman et al. 2005). In addition to the service design discussion presented in chapter 3.2, it has also been proposed in marketing literature that people might evaluate and judge the service and/or product characteristics based on appearance (e.g. Levitt 1981). My opinion is that this is certainly the case especially in service context since they usually contain more in-tangible elements than products. The empirical results of the second pilot study also sup-port these insights by suggesting that the way the content on the Web sites is presented is clearly associated with the aesthetic aspects, such as colors and graphical design. In this regard, appearance can be considered as important usability feature in the complex service context in which the ease of use is even more emphasized than in many other environ-ments (e.g. simple services⁶). Appearance refers to aesthetic appeal of the Web site (e.g. its colors, and clarity of design and structure).

Second, in the insurance context it is particularly important that the customers are able to get assistance if they need support and/or advices. Assistance is not generally es-tablished in the prior research on Web site usability as one of the essential characteristics.

Despite this, and referring to the fact that assistance is perceived as one of the elements that have to exist in self-service type insurance service environment by the customers, it was suggested that assistance also needs to be considered as one of the crucial usability elements of electronic insurance service environment. Assistance refers to tools and services (e.g. insurance calculators, “FAQ:s”, help windows etc.) available on the Internet, which can be used interactively to support operating in the electronic service environment.

Practical results suggest that, all three usability attributes included in the framework by Scharl and Bauer (content, navigation, and interactivity) as well as the two suggested additional attributes derived from the empirical data (appearance and assistance) can be proven relevant to be utilized in the context of complex services, such as insurance. How-ever, it has to be noted that since the nature of the study was qualitative the results are not confirmed as being generalizable. On the other hand, it was not even the aim of this study.

6 See chapter 3.1.2

Instead, the main focus was on suggesting a theoretical framework for assessing usability in the context of electronic insurance services. Generalizing would require further (quan-titative) research on the discovered attributes.

As to the performances of the investigated companies, the empirical results provided interesting results, namely the type 3 company (idiosyncratic insurance provider) first characterized as childish and non-insurance like, but was actually outperforming both type 2 (online insurance provider) and type 1 (traditional insurance provider) companies in the end. This was slightly surprising as type 2 company was assumed to have the best skills for doing insurance business in electronic service environment beforehand, due to its advanced skills in both insurance and electronic service field. The difference between type 3 and type 2 companies was not big, but still type 3 company was perceived as slightly better in terms of Web site usability. The performance of type 1 company was actually perceived as worst in the end.

The main reason for the success of both type 3 and type 2 companies was their clear and lively approach on offering electronic services in general. Although characterized as some-what childish and non insurance-like (this was the case especially for type 3 company) both online insurance provider and idiosyncratic insurance provider were characterized as bringing rather positive and fresh approach to insurance business in electronic service environment. However, the empirical results also reveal that since insurance as a business generally should create trust among the customers it is important for the service providers to recognize the thin line between being too lively and “refreshing but still matter-of-fact” ap-proach in developing the electronic insurance service environment.

In case of traditional insurance provider the most fundamental issues had to do with the lack of clearness in terms of appearance, and too large amounts of information. First of all, although the appearance (e.g. used colors) of the Web sites was perceived as trust-worthy and matter-of-fact (insurance-like approach) clearness in design might cause the customer to get lost. In addition, this impression is even emphasized when there is too much poorly structured, and thereby inaccessible, information on the Web sites as was the case for type 1 company.

Implications for this study

The second pilot study provided particularly relevant implications for my dissertation from many perspectives. First of all, the usability framework by Scharl and Bauer (content, navigation, and interactivity), complemented with two additional usability attributes de-rived from the empirical data (appearance and assistance) was proven feasible for evaluat-ing the usability in electronic insurance service context. Hence, these five above discussed usability attributes are employed further in this study.

Second, the results referring to the performances of company types 2 (online insur-ance providers) and 3 (idiosyncratic insurinsur-ance providers were particularly encouraging since they indicate that it is possible to approach the development of electronic insurance services as well as electronic insurance service environment in general, from a novel per-spective. By novel perspective, I am referring to adding more fresh and lively elements to the development electronic insurance services and service environment.

And third, the development of “traditional versus novel typology” was inspired by the notion referring to the novel approach on develop electronic insurance services. In fact,

“traditional versus novel” typology can be considered as the most fundamental implication of the second pilot study for this study. Further, the developed “traditional versus novel ty-pology” had a crucial role in constructing the empirical research setting for this study. In the next chapter (4.4) the idea of traditional and novel approach on designing electronic