Tell us about your work: how does decision making psychology fit in it? I work for one of the largest reinsurance companies globally. Reinsurance is insurance for insurance companies, and as well as taking on the majority of the risk, we act as consultants, employing experts from a range of fields, who can advise on medical conditions (for critical illness insurance), predictors of longevity and mortality (for life insurance), occupational therapists (to help get claimants back to work) and so on. My background is in psychology, and I work in a research and development team of about 10 (the majority outside of the UK) academics who take on pieces of research that will be beneficial for our clients, the insurance companies. Though my PhD is in health psychology, I now work almost exclusively in behavioural economics. We take insights from behavioural science and apply them to all areas of insurance where decisions are made, through live field trials with our clients. For example, we suggest changes to underwriting (application) form questions regarding health behaviour and medical conditions, to try and encourage the applicant to be honest and accurate in their answer. We also suggest changes to letters, websites, telephone scripts and apps, helping our clients to achieve what they’re looking for, be it better retention, faster turn around of claims or click through rates on a website. We have the mantra of ‘test, test, test’ and we are now beginning to get some early positive results back. So we directly apply concepts from the literature into practice, improving what we know as the findings come back.
Why you decide to go into industry instead of continuing in academia? I was in academia for 5 years after my undergraduate (psychology) and masters (health psychology), working as a research assistant in two different departments for 2 years then completing my PhD for the final 3. My decision to leave academia wasn’t a certain one. My current job was brought to my attention by a fellow PhD student, but the application deadline was the day after I submitted my thesis and the first interview was the day after my mock viva (in which my thesis was ripped to shreds). So I didn’t have much time to prepare, and didn’t think for one second that I would get the job. The company I work for is relatively unique in the way it combines academia with business, employing lots of people with masters in all sorts of subjects, and the occasional person with a PhD too, and I had no idea the opportunity existed. I now see how low my confidence was at the end of my PhD and how much higher it is now I don’t work in academia any more, and I really enjoy working in a job where I am valued and given loads of new opportunities, which is exactly what I needed following the gruelling final year of my PhD.
What do you enjoy the most in your current role? When interviewed for my role I was asked, how did I feel I would cope with moving from focusing on one project for 3 years to dealing with several all at once in the new job. I said I was looking forward to the challenge, but now that I’ve settled in I think this is one of the things I enjoy the most. That, and the fact that application of the theory happens pretty quickly. In fact, there’s barely enough time to read the literature before I’m expected to make suggestions about a client’s website/letter etc. The results still take a while to come, but knowing the client is happy and you got great results make them worth the wait.
Do you see any challenges to the wider adoption of decision making psychology in your field? We have a few challenges in terms of: a) client buy in, and b) client willingness to try out tests, but even if we get great results and convince everybody that the new behavioural economic informed ways of communicating are better than the originals. Insurance is in many ways an old fashioned, and slow to keep up industry. Underwriters have decades of experience in working out how to ask people questions in a way that will elicit accurate information, and don’t necessarily agree with suggestions of new ways to do it. The majority of life insurance policies in many markets are sold via agents or independent financial advisors. If those guys don’t read the question as we’ve redesigned it then we have little control over that. Perhaps as there is a gradual move towards policies being sold online we will have better control of our application of behavioural science, but whether we like it or not, if someone wants to deliberately not disclose the truth, there’s little that insurance, as the industry currently stands, can do about it.
How do you see the relationship between academic researchers and practitioners? The best insight I can give here is on the relationship between academic researchers and people who work in industry who are interested in research. The company I work for is very interested in topics surrounding epidemiology, medicine, economics and so on and so we have collaborations with researchers in those fields and others. From my time here I’ve been gaining some insight on how academic researchers perceive private sector companies who could possibly fund academic research and vice versa. I have been surprised and pleased to observe a very mutual respect from both sides, and not the stereotypical perceptions you might expect.
What advice would you give to young researchers who might be interested in a career in your field? My perception is that it’s such an interesting topic, it’s quite possible to pick it up quickly, so I would recommend not spending too long trying to understand the theory but try and get stuck straight in with doing testing (I’m sure plenty will disagree). I also strongly recommend thinking outside the box of where you could work. I have since met others using behavioural science in the insurance setting, and I believe there is a place for it in every industry, so think how you could take it to that industry.