Top 3 Tips for Insurance Product Development

There is no right or wrong way to go about insurance product development, but we’ve identified a number of things from our own experience to help guide the way. Here, we’ll dive into our top three.

1. Your market strategy will inform your product development. 

You may know what your market strategy is, but you shouldn’t assume every stakeholder throughout your org knows this (or why it’s important). 

Are you a market leader? Are you a niche provider? Do you aim to be a cost leader?

One study from the Society of Actuaries found that nearly 30% of life and annuity organizations employ a “fast follower” strategy, waiting for a competitor to innovate successfully before moving quickly to develop a similar product.

No matter your strategy, what’s crucial is getting your entire organization on the same page. 

2. Integrate perpetual innovation into your business planning strategy.

Technology (and consumer needs, habits, and sentiments) are evolving faster than ever. Gone are the days when traditional carriers would pencil in revisiting product performance once every 12-18 months.

To stay competitive, insurers should put an organizational focus on innovating. However, it’s not merely enough to dedicate resources. Consulting firm McKinsey explains that “one common cause of failure is standing up an innovation lab or team without fully integrating it into the business-planning cycle.”

They elaborate that “by facilitating constant dialogue between innovation and business teams, insurers can foster a common understanding of the market landscape, identify potential opportunities, and realize their aspirations.”

3. Consider a tech partnership to accelerate innovation

To hear McKinsey say it, “building a diverse innovation portfolio and developing a differentiated value proposition require new, cross-functional ways of working,” including the occasional need for help from an outside entity. 

The right technology development partner can help your organization thread the needle between expanding upon your core business and moving quickly enough to truly seize new opportunities. 

“Our partnership model isn’t about building static software,” says Jeremy Bill, Chief Insurance Officer at Bestow. “It's not released once and never touched again. We're constantly gathering feedback and continuing to innovate. It’s a cycle centered around delivering continued innovation and product enhancements to carriers with industry-leading speed.”

The key is to strike a balance between your organization's core competencies, managing existing books of business, and, as McKinsey punctuates it, the need to “increase the quality, pace, and breadth of innovation.”

Stay true to your organization

Every company is different, with different corporate structures, books of business, and demographic targets. Finding the right development strategy isn’t about reinventing the wheel, it’s about being honest about where you’re at, where you’d like to go, and how your guiding principles can help get you there.