A senior executive from a major brokerage firm recently told us about difficulties she has experienced in obtaining products for worksite and affinity group marketing.
She lays the blame on the inability of insurers to develop products in a timely manner. If it takes two years to develop a product that will be viable for only one year, thats not reasonable, she says.
In nearly 40 years of developing insurance products, the two of us have also noticed problems in rapid deployment of new products. The impediments have included systems difficulties and capacity, regulatory delays in product and sales materials approval, and "risk management" oversight.
Products destined for the worksite marketplace (including affinity group marketing) tend to be particularly volatile, as their "shelf life" can be severely limited.
Naturally, when the development cycle suffers unnecessary internal delays, marketers get frustrated. (Delays outside the insurers control–such as regulatory delay in approving products–can be forgiven, if not totally understood.) The response, particularly at independent marketing organizations, is to start searching for other, more efficient providers.
This does not have to occur. Insurers can expedite the product development cycle, particularly for worksite and affinity group markets, with a few simple procedures.
First, assign responsibility for product development to individuals, and empower them to cut through internal bureaucracy to drive the product to conclusion.
The person assigned to bring products to market must have a reporting relationship that gets the attention of everyone involved in design and approval. This should help correct an all too common problem. This problem is that product managers are often so low in the corporate pecking order that they are not taken seriously by the more senior people who are essential to the design and approval process. In such situations, product development takes priority somewhere below the coffee break and therefore languishes through inattention and lack of prioritization.
Second, make sure that everyone has an incentive to facilitate rapid development of products.
Why? The adage that "no one ever proved a lawyer wrong who said no" comes to mind. Too often, risk managers and compliance professionals are prone to say no. After all, why take a risk on something you approved could go wrong, if you have no incentive to make it go right?
Those involved need to be aware there is risk in everything. Doing nothing is a decision that involves risk, just as much as doing something.
The clich? "insurance is not bought, it is sold" is, as with most clich?s, correct. Any lawyer, any risk manager, any compliance person can protect their clients or employers right into bankruptcy. This is because, in insurance, unless something is sold, nothing else can happen! And, nothing will be sold unless the industry can get products to market when the market is ready for them.
Third, return to fundamentals in the product design process.
