Product Development Strategies for Insurance Carriers
Decline in growth opportunities has forced insurers to look outside their traditional products and markets for sustained and profitable growth. Product innovation has climbed further up in the list of priorities for today's insurer. I think the following are some of the key drivers that necessitate speedy and efficient introduction of new insurance products in the market
• Increased customer needs and expectations
• Demands from distribution channels
• Increased competition in the insurance marketplace
• Heightened regulatory scrutiny and compliance requirements
It is common knowledge that demand for new and creative insurance products is only going to intensify in the coming years; but the ability of insurance companies to cost-effectively respond is diminishing. While IT legacy systems may pose significant challenges, other areas like poorly managed product introduction processes as well as inefficient product testing related activities contribute to the problem. I believe that insurers should address speed to market challenges holistically at both the process and technology levels.
Process
• Managing the overall process
• Promoting collaboration between stakeholders
• Encouraging customer participation in the product creation process
Technology
• Externalizing product rules and attributes
• Analyzing the impact of product rules externalization
• Integrating the externalized rules environment with legacy applications
Insurers should strive towards process improvements through well-defined and communicated best practices and close monitoring of standard metrics. This will result in predictable development time frames, improved quality and better measurement of results. On the technology front, insurers should consider taking a more active role in adopting new technological advancements for business betterment.
Though it seems to be daunting task, I strongly feel that a well defined strategy backed by well-developed business case will provide significant competitive advantages to the carriers.
Please share other strategy aspects insurance carriers should be looking into to launch the right product at the right time in the market.
