Collaboration: DNA of Product Development
“It is the long history of humankind (and animal kind, too) that those who learned to collaborate and improvise most effectively have prevailed.” – Charles Darwin
There are several customer-facing facets an insurance company shows its customers. These include: the agents and brokers that interact with customers; the various administrative service communications which respond (or don’t) to customer queries; the internal and third-party claim adjudicators working with clients to manage loss events; advertisements on traditional and social media; and insurance products that carriers offer (or remove from) the marketplace.
This column focuses on the final facet mentioned above. While shown last on my list, insurance products represent a very critical facet that customers see of the carriers with which they decide to conduct commerce. For customers and insurance companies, insurance products represent an (in)tangible expression of a carrier’s willingness to accept or reject various types of risk at a point in time.
For me, that means an insurer’s risk appetite, as viewed through the lens of the product mix it offers the market, should always be in a state of constant redefinition. The flux of products should be shaped by the continually shifting risk landscape; the changing needs of customers, producers, and the company itself. Product development succeeds when the new (or enhanced) product simultaneously gets and keeps customers, satisfies the expectations of producers, but most importantly, generates profit for the insurance company.
Collaboration Is Essential for Product Development
The very criticality of developing products mandates the presence of collaboration among and between insurance professionals. If collaboration is not already present in the DNA of an insurance company, then the company needs to discover whatever magical elixir exists to create the collaboration DNA for the firm.
However, whether the DNA exists or not, the creation of an insurance product is not an easy task. With the collaboration DNA, product development will be difficult. Without collaboration, the development process will be close to impossible to accomplish.
Product development requires a blend of ideas, people, time, and other resources including: insurance experience and expertise; knowledge of the changing risk landscape; understanding of the firm’s evolving current and target markets needs; conceptual ideas regarding what customers want both now and in some future period (to be determined by the product development initiative) for cover; the current and potential manner in which all the involved stakeholders want to consume and potentially require service for the product; financial estimation of the potential administration and claim management service expenses; and, as importantly, the authority and willingness to say “no” to a product idea.
A Diverse Portfolio of People and Functionalities
An insurance company is a many-silo-ed, multi-functional, geographically dispersed creature. The product development process may have to include participants from many, if not all, of these areas.
Beyond the company, most if not all, the various participating firms in an insurer’s many and varied ecosystems (e.g., law firms, repair shops, rehabilitation firms, hospitals, property restoration firms) are also many-siloed and multi-functional.
One ongoing challenge of product development is solving how to gather the right professionals together to meet at the right place at the right times.
A second challenge is conducting the product development process with insurance professionals working within the insurance company, within its various value chains, or throughout the insurer’s participating ecosystems.
A third challenge of product development is managing the coming-and-going activities of professionals occuring in both synchronous and asynchronous time periods.
An Illustrative Product Development Process
The three challenges I mentioned above must be resolved in an environment where the product development is a never-ending process. Moreover, I believe the product development process is governed by three principles:
- No product is permanent, whether it already exists in the marketplace or is in some stage of development.
- No specific set of stakeholder needs takes precedence, except for the primacy of the insurance carrier’s requirements to generate profitable premium.
- Insurance product development should meet the changing needs of the various stakeholders by making it easy for the stakeholders to conduct insurance commerce in a manner each stakeholder expects.
To make a product development process real, here is an example of a product development process framework that has six major steps.
The steps shown encompass various activities, departments that probably should participate, and requisite systems used in the process.
Note that neither the steps nor the activities are meant to exclude other steps or other activities for each step (whether shown or not shown in the visual). Regardless of the differences between the framework in the visual and other frameworks, there are five major points that insurance firms need to consider when developing products:
Many functional departments are involved, as shown in the visual.
The ideation step is an iterative step. The activities within this step will not be “one-and-done,” but instead loop among and between the people collaborating to create a new product idea.
The entire series of steps are themselves part of a larger iterative loop. Information should be extracted from the post-launch step and fed back to the ideation step to feed ideas for enhancing the product just launched or create new products.
The product development process is part of other insurance business processes, including the insurer’s underwriting, rating, quoting, core administration system, reinsurance, accounting, and customer/intermediary firm service processes.
Product development collaboration sessions and final product forms and related material should be accessible from CRM, broker management systems, and, where available, producer productivity systems.
Enabling the Product Development Process
The three challenges are essentially pulling together insurance professionals from different functions, different companies (between and among participating ecosystems), different geographies, and different time periods to satisfy a coherent objective.
One solution that enables the product development process, and simultaneously resolves the three challenges, is the use of a mobile device app that is a web-accessible, cloud-enabled digital hub to generate, consume and share a wide range of information in a collaborative manner.
This information includes new or enhanced policy ideas, rate and/or actuarial calculations, approved policy forms, policy contractual elements (i.e., terms, conditions, restrictions), product coverage elements, compliance requirements, reinsurance requirements, target-market opportunities, marketing or sales campaigns, advertising, branding, conversations, pictures, and video.
More specifically, professionals involved with product development, whether from within the insurance company or throughout its participating ecosystems, need a solution that supports, at a minimum:
- Face-to-face, click-to-chat, click-to-call, and IM interactions between two or more people (perhaps even communicating and collaborating within the metaverse?)
- Data, rules, algorithms, template, and document creation, editing, sharing, annotation, and storage
- Storage of all the communication threads in each product development collaborative session, including documents and data generated and accessed throughout the development process for each product
- Search of and access to information (including documents and data in each product development collaborative session) in the development process of each product
- A library of policy forms finalized by the insurance company approved by regulators, including tags of each information element of every finalized and regulatory-approved policy form
- A library of regulations – both existing and proposed – for each jurisdiction in which the insurer wants to sell insurance, including tags for each regulation and jurisdiction
- Access on all major mobile platforms (iOS, Android, Windows)
- An audit date/day/time trail of each insurance professional’s activities described by the items on the list above.
At some time in the future, commercial property/casualty insurance firms might want to consider opening the product development platform to their clients’ risk managers or CFOs to enable them to contribute their needs and expectations about their own firm’s commercial P/C insurance product purchase and consumption needs.
Products are the lifeblood of an insurance firm, whether the firm is a carrier or a distribution channel.
Products are also an embodiment of an insurance firm’s strategy and go-to-market approach. However, new risks constantly emerge in the market, and customer expectations continually change as to the way they want to conduct business with companies, regardless of industry.
Insurance products need to encompass the risks insurance firms are willing to accept and be suitable to the current and future ways the insurance firms conduct business.
The product development process will not support current or future commerce interactions unless the insurer has a robust collaboration DNA.