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Idea Generation Exploration Implementation How would I do it? Product Development Framework
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Commercial Insurance
Product DevelopmentJustin VanOpdorp ACAS, MAAAGE Commercial Insurance
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Introduction
• Idea Generation
• Exploration
• Implementation
How would I do it?
Product Development Framework
Idea Generation
Product Development
• Comparison/Benchmarking of Competitors
• Customer Interviews• Idea Generation Teams• Data mining• Claim Audits• U/W Reviews for Emerging Risks• Internet Research• EmployeesWhere do all of the ideas come from?
Idea Generation
Initial Idea• I have an idea:
• This is a good idea because:
• The main benefit of this idea:
• The main concern with this idea:
• One way to handle this concern:
• My next step:
Source: Idea Champions, “Banking on Innovation”
• Feedback
• Qualitative Approach to Product Evaluation
How will management wade through each idea?
Tools for idea evaluation
Evaluation
• Likes
• Concerns
• Suggestions
LCS Approach
Idea Survival versus Idea Killing
Idea Feedback
Source: Idea Champions, “Banking on Innovation”
Keeping Score
Product Evaluation
Weight 0.5 0.2 0.3Product 1 1 5 3 2.4Product 2 3 1 1 2.0Product 3 5 3 5 4.6
• Success for one does not guarantee success for another
• Utilize most promising ideas and modify to meet organization’s needs
Steal the best, improve the rest
Idea Generation
No one best approach
Idea Exploration
Product Development
• Passion
• Leader
• Driver
• Organized
Step #1: Identify an Owner
Projects without owners lack focus
Ownership
• Product Definition
• Data Gathering
• Data Analysis
• Recommendation
Quasi Due Diligence
What do I need to know?
Gathering Information
• Marketing/Sales
• Claims
• U/W
• IT
• Legal
• Finance
Input from all functional areas
Expertise and team environment important
Gathering Information
• Accounting
• Risk Management
• Actuarial
• Policy Processing
• Other Functional Areas
• Who are my experts?• What are the specifics of the
product?• Who are the target customers?
How large is the target market?• Does competition exist?• What will my competitive
advantage be? Price, service, innovation?
• What distribution channel will be used to market and sell the product?
• Who will be responsible for underwriting the risks?
• Which IT system(s) will we use?
Do you know the answer?
Be willing to ask a simple question
Product Definition
• How will premiums be billed and collected?
• How will we rate, quote and issue polices?
• What policy forms and rates will be used?
• Internal or external claims handling?• Are there any regulatory
considerations?• What data will be collected and
stored?• What are the risks of this product?• What information do we need to
monitor?
• Internal or External Relevant Product
Frequently limited internal data to support actual product.
What sources of data are available?
Data Gathering
• Internal or External Proxy
• Probably the most utilized
• Competitor filing, Bureau Data, Adjusted Internal Data
• Most overlooked, Good for reasonableness checks
• Non-related products, Internet, Publications
• Understand the source of the data
• Make appropriate adjustments and relationships
• Quantify risk loads for imperfect information
Analysis generally consists of many subjective assumptions due to limited information and data
Actuarial Creativity
Data Analysis
Provide Recommendation to Management in a consistent
format
Consistency
Recommendation
• Minimize turnaround time
• Meets requirements of management
• Ease of Use
Implementation
Product Development
• Infrastructure
• Communication Plan
• Compliance
• Program Introduction
• Monitor
Implementation
• Distribution Channel
• Policy Forms and Rates
• Underwriting Risk Selection
• Policy & Premium Processing
• Claims
• Data Collection Plan
• IT Systems
• Billing and Collections
• Financial Reporting
Foundation of Success
Develop Infrastructure
• Internal
• External
Execution
Additional Steps to Implementation
Communication
• Regulatory Filings
• Legal Entities
Compliance
• Pilot
• Achieve Goals prior to further release
Introduction
• Production
• Profitability
Monitor
Conclusion
Product Development
• Management Support
• Ownership
• Collective Project
• Infrastructure
• Expertise
• Data Collection
No secret recipes
Principles for Success