How To Save A Life

A 4-part series by meta-decisions for Insurance. You can sign up here for the full series.

An insurance ad caught my eye.

?It was about fixing potholes in roads and, essentially, saving lives (and car maintenance costs).

?I though it was an excellent way for an insurance company to promote their social responsibility activities by doing something that is:

(1) directly related to their industry (credibility-enhancing) and,

(2) totally useful for their clients (and potential clients), in everyday life, which might even be seen as an ongoing ad – now every time a driver sees a pothole they will think of the insurance company. And in doing so, they are

(3) potentially saving themselves considerable insurance claims.

A win-win-win!

If you’re in the insurance game and think that’s hard to top, think again.

?There’s plenty of other ways to have the same beneficial effects.

Because, yes, there’s the structural architecture that needs improving (road infrastructure). But you can also save lives when you improve the choice architecture for people.

That is, the way you present information and options to people to help debias their decisions. Choice architecture is about designing the environment in a way that influences the choices people make (but without taking away their freedom to choose).

?Here’s an example:

?Improving Choice architecture with a Paceometer

When you look at this picture, you must be familiar with the red circle around the outside - that's a speedometer, denoted in miles per hour.

?You’re probably less familiar with the white circle on the inside which has only really recently been publicized - it’s a paceometer.

?What's a paceometer? A paceometer shows how many minutes of that speed it takes you to travel 10 miles. ?Naturally, assuming you're going at 10 miles per hour (m/h) it'll take you an hour (60 minutes) to travel 10 miles.

Many of you may have noticed something odd about this: while the numbers on the outside follow a consistent pattern, the ones on the inside are anything but regular!

?The paceometer shows that if you're going 10 or 20 or 30 m/h then there's a really, really big time saving to be gained by speeding up a little. Going at 30 m/h rather than 20 m/h in fact you'll save a whole 10 minutes. On the other hand if, you accelerate from 80 to 90 m/h for example, or 70 to 80 m/h you basically save only one minute.

?You may have sensed this from experience. If you use Google maps or some other GPS in your car and you realize you're going to be 5 minutes late for an appointment, you step on the gas and after driving it an insanely fast and dangerous speed for about 8 minutes you suddenly realize your arrival time has only improved by 1 minute!        

?This is fascinating because when we present the information about time and distance in this way people actually get the message:

once you hit a comfortable 65 or 70 m/h on the road don't bother speeding up, that's enough. Because the risk you actually encounter, the risk you incur on yourself and the risk you effectively impose on other people by going any faster, is utterly pointless in term of time saved.        

?Or, to quote Rory Sutherland:

?“Going quite a bit faster when you're going slowly is a really big gain. Going very fast when you're already going fast is actually the action of a dickhead.”

?

So what?

?The above example was a result of an insightful piece of debiasing research being put to good use. It’s an example of a choice architecture modification, a nudge: giving information in a way that really registers. Reframing speed and time saved in this way makes sense to people and, as a result, might save somebody's life.

We are all busy people. But nobody seems to understand that, really.

We’re constantly bombarded with endless information and facts about this and that. (Even at the shopping mall, I noticed a huge poster with heavily texted instructions on how to behave within the premises. I walked right past it.)

?Communicators often seem to forget, ignore or be oblivious to the fact that their intended audience can’t really retain and remember many facts that are presented out of context. People need to make sense out of facts so that they stay memorable.

My proposition is that helping people get the right fact-based message is the ultimate level of service in our modern, overloaded world.

Correcting harmful misperceptions and biased thinking can be truly valuable across all professions, and more so the ones related to our health and wellbeing, like insurance.

Now what?

?Fixing misperceptions will help people make better decisions. It will help debias people.

?To fix misperceptions, the first step is to find the problem. You must spend some time finding misperceptions that exist.

?Spending enough time on this is crucial because it’s the seeing, seeking, finding, understanding and ultimately framing problems (the harmful misperceptions) that determines the quality of our solutions. If you spend time “fixing” something that doesn’t need fixing, you’re not adding any value. In other words, you have to get curious and observant.

?In the example above, the paceometer fixes a harmful misperception: how people fail to recognize the curvilinear relationship between acceleration and time saved. (Granted, unless they are physicists.)

?The second step about finding the problem behind the problem. This means investigating what causes the misperception and what might help people to understand faster and better.

?To get the answer to that it usually requires a mixed-method approach. This can include directly asking people to get to the bottom of things. For example, using the ‘Five Whys’: an overmentioned but underused technique developed by Sakichi Toyoda, the founder of Toyota, who used it as a root-cause analysis technique by asking “why” five or six times until the ultimate cause was revealed.

?But because people often don’t have good answers for their behaviors (or we tend to post-rationalize), it’s a good idea to also draw from the field of behavioral decision-making (yours truly). Science tells us, for example, that probabilities and percentages are hard to understand for most people, while proportions (e.g. two out of five people) and visual representations are easier to grasp.

?The third step is to solve the root-cause of the problem creatively. We need to get creative in order to see past the "solutions" that currently exist that are not helping overcome the problem.

?Contrary to common belief, creativity is not reserved for artists. Getting creative is about doing the best you can with the resources you have available. What are these resources for you? Can you ask for an outside view to get different perspectives? Can you tap into behavioral science for practical tools and solutions? And once you come up with some possible solutions, can you test them to see what works?

?Naturally, most people will be tempted to delegate the creative solutions part to Generative AI. But alas, Gen AI is unlikely to give you an advantage. On the contrary, early studies show that Gen AI will improve individual creativity in some people but will reduce creativity in the team overall since, in effect, it encourages everyone to have similar ideas. What this means is that it might be better to use smart tech as an aid for creative thinking but not as a replacement for human creativity (while it's still alive!).

Question for you

?What are some misperceptions that your clients have that could be harmful for them and, thus, finding ways to correct them would be valuable?

Thanks for reading!

I send out a bi-weekly newsletter on the behavioral side of decision-making.

You can sign up here anytime.