Is There Such a Thing as 'Positive Friction'?

Application forms that encourage fast thinking can lead to misdisclosure through careless mistakes, approximate answers and intuitive biases. Slowing the buyer down may help. 


One key goal of digitizing the life insurance customer journey is to create speedy and seamless application experiences, which, it is hoped, will increase conversion rates. 

Research, however, has shown that there may be a hidden cost to fast, frictionless digital insurance applications. The prevailing view in psychology, popularized by Nobel Prize-winner Daniel Kahneman’s book Thinking, Fast and Slow, contends that humans have two modes of making judgments. One is very quick and intuitive, but doesn’t gather all available information or take time to consider a response. The other is slower and takes more effort but is logical and considered. 

Insurance companies have been focusing on making the applicant user experience (UX) as fast and frictionless as possible. Although a worthy goal, it also increases the likelihood of intuitive responses to the provided questions without real thought or care, thereby leading to misdisclosures. Could there be value in introducing "positive friction" (i.e., more time for consideration) into the application process? 

Disclosing … fast or slow?

Responding to questions on a life insurance application is a constant and unexpected exercise in thought, judgment and decision-making. Research has shown that often people will have a tendency (or bias) to satisfice, meaning they will provide “good enough” rather than optimal responses, to minimize their efforts. In situations where people are encouraged to respond quickly, “accurate enough” (i.e., approximate or incorrect) responses for metrics such as height, weight or alcohol intake might be provided, instead of putting in the effort to give more precise responses.

A second concern is whether encouragement of fast thinking might lead to greater misdisclosure by spurring applicants to rely more on their intuitions during the application process. This is not to say people are intuitively attempting to gain economic advantage: Indeed, in studies in which participants earned a bigger payment by deceiving a fellow participant, they were found to be honest more often, sacrificing the incentive, when they had to decide on a response quickly. Similarly, people are not necessarily intuitively seeking to secure themselves the best insurance deal. Formulating a lie is actually quite mentally taxing, as is figuring out how to “game” an insurance application. 

When misdisclosure occurs intuitively, it does not necessarily derive from a desire to game the application process. Often, it stems from an applicant’s desire to display their social value. Applicants are more likely to misdisclose details about themselves that are weighted with social stigma, such as recreational drug use or high body mass index (BMI). This is due to susceptibility to the social desirability bias — the natural human impulse to present oneself in the best light. 

RGA research has found that people responding to questions under time pressure are less likely to disclose sensitive details about themselves than those not experiencing time pressure. Hence, encouraging people to respond quickly may make it more likely that they would intuitively aim to present a positive social image, leading to misdisclosure. 

These biases are particularly concerning for life insurance underwriters, as they are natural, affect people in many situations and are easy to self-justify. In a study using real application data, RGA compared self-reported BMIs with those obtained in paramedical exams and found that a full two-thirds of the applicants underestimated their BMIs. The vast majority of underestimations were for less than 10% – a possibly justifiable “white lie” for an applicant, but a material amount to an insurer across a whole portfolio. The implication here is that applicants might have been intuitively managing their self-images by subtly underestimating their weight but not brazenly misreporting a weight to secure more favorable underwriting. 

A Case for Positive Friction

These findings are significant for underwriters. Application forms that encourage fast thinking can lead to misdisclosure through careless mistakes, approximate answers and intuitive biases. How can insurers mitigate misdisclosure risk while improving customer underwriting journeys? 

Designing effective applications means making it psychologically easy for applicants to answer questions honestly. This can be done by providing memory-prompting cues, such as images, or by breaking complex multi-part questions down into much smaller components. These can make applications easier to fill out while still producing honest and accurate disclosures.

Insurers can also leverage the social desirability bias to improve disclosure rates. For example, forms can be written using language that contains subtle reminders that an applicant’s social responsibility is to report their lifestyles honestly, rather than tweaking their numbers in ways that would add luster to their self-images. Additionally, presentation of social norms can be reframed in ways that will encourage people to conform to them in their responses. For example, cues for “normal” levels of drinking, smoking or BMI can be provided via scales that have high (but realistic) limits. 

Third, application designers can acknowledge that friction in a digital process might not always be a negative in user experience. Indeed, positive friction can be used creatively to benefit users and businesses alike. UX designers in other industries are already using it: Bank apps, for example, now have warning screens that will prompt users to stop and check payee details to mitigate risk of fraud, or even to protect vulnerable customers from impulsive late-night purchases. 

See also: A New Boom for Life Insurance?

Final Thoughts 

Could positive friction be a plus in digital life insurance applications? More testing and study will be needed to understand whether slowing user application processes could improve not just disclosures but the entire user experience. Indeed, it is possible that reducing the process’s friction too much may be incompatible with applicants understanding their policies fully, which may risk the sorts of misunderstandings that could lead to early lapses and cancellations and possibly reduce trust in a brand, as well. 

Psychologists have also found that, when people put effort into creating something, they may value it more. This phenomenon, first written about in 2012, is known  as the IKEA effect. What this may mean for insurers is that the need for more effort on a customer’s part, even if it means taking longer to fill out  an application, may not necessarily be negative for conversion in the long run. With more effort, the customer’s investment in the application process may increase throughout the sales journey, potentially building a higher perception of the policy’s value. 

Digital form designers may want to consider whether a side effect of frictionless interfaces might be responses provided with minimal thought, increasing risk of misdisclosure. This could happen in instances where fast responses lead customers to approximate their answers and make careless mistakes. There is also a risk that encouragement of fast responding increases applicant use of their intuitions to provide responses, which increases the effect of biases such as social desirability that harm disclosure rates. 

Finally customer journey designers may also ask whether there may be material sales trade-offs in customers’ experience by slowing applicants down. Slower application processes may offer a higher chance of customers fully considering their purchase, and that greater investment in effort may lead to an increased perception of value and greater trust. The path of least resistance may not lead to the best outcome.

Read More