Product launches driving operational complexity- customer impact measures can right the balance
Product launches are the lifeblood of most insurance carriers- even for those who position themselves as providers of basic product features, there is a tendency to bloat the product portfolio with the push to cater to various market niches with variations of core products. In many cases, these product launches tend to drive operational complexity and creation of additional silos due to the pressure of speed to market but also because of the dramatic pull of revenues on the business case for a product launch.
If you consider the financial case for a new product launch, the revenue and related margin expectations provide significant justification for spending the organizational efforts to cater to the new / emerging market needs. But very often the operational short-cuts (postponements of "Day2 aspects") result in increasing complexity and impact on customer satisfaction is left out of the equation. It is often very difficult for future investments in operational improvements to make a similarly sound financial case due to the lack of cohesive metrics to connect customer service degradation to customer retention and financial bottomline- it is easier to inject band-aids & fixes than make the case for investing in operational improvements that can save only internal carrier costs.
One way to address the imbalance is to look towards customer impact scores - a simple mechanism to ensure operational complexity does not adversely impact customer impact is to add the costs for addressing any operational complexity to the cost of the product launch itself. From a COO standpoint, any new product launch should at worst be neutral to customer servicing impact - maintaining a scoring mechanism or customer impact and estimating future costs of keeping the score neutral can be established as a core component of the business case for the product launch itself.
