We are living in a time where exceptional customer experience become a mode of survival for different industries. Especially in the insurance industry while launching new insurance product. With businesses like Netflix and Amazon raising the consumer experience bar by providing services. Altogether that promise speed, convenience, and personalization, customers have started expecting the same from every industry they interact with.
Insurance is no different. With the complete transformation of customer experience, it has become imperative for the insurance industry. To follow the lead of Netflix and Amazon and build products that are flexible, customer-centric, and speedy.
The great news is that the industry is coming to terms with this new reality and have already started re-looking at their outdated product-driven business models to meet the needs of this new customer-driven market. However, there are some challenges that remain. Challenges that are keeping the speed of innovation slow when it comes to insurance product development.
In this article, we are going to explore the state of new insurance product development, the challenges that stand in front of them and the best move forward.
Now, in order to truly comprehend the best approaches for new insurance product development. it is important to understand where the current insurance products are lacking.
What are the issues with the current insurance products?
There are a number of things that are keeping the current insurance products away from meeting their digital, customer-first potential.
– Presence of legacy system: A number of products that were developed in the pre-COVID era run on obsolete technologies. Along with stringent system rules and hard-coded businesses. This makes it difficult for new elements or features to be added in the legacy system.
– Data management: It is observed that the insurance companies don’t work around a robust system. when it comes to documentation and maintenance of information around the product. This makes it difficult to increase reusability.
– Non-customer Driven: Insurance companies are known for building complex products that consist of different class codes, coverage types, forms, etc. They make the products so information heavy that it fails to appeal to the millennial demographics. What the modern-day customers truly need is a set of effective, simple products. That are completely usage based and highly specific to their needs.
The solution to these problems that the pioneering insurance companies. Which have found is revisiting their product development journey. They are ready to dedicate their time to the processes involved to create products that are highly customer-centric and future-ready.
Now, talking of the new product development process, let us look into the steps. Which insurance companies can follow to build a market-ready solution.
Insurance product development process – How can we go about it?
The creation of a new insurance product is a multi-step process, each having customers at the center.
Step 1: Brainstorming
The first step for an insurance company should be to gather all the requirements. Such as internal and external stakeholders and come up with innovative solutions.
Step 2: Feasibility analysis
Once a few solutions are identified, it is time to check their feasibility. An in-depth research should be done to know the technical and economic risks attached with every individual solution. Moreover, the estimations around cost, time, and resources should be done at this stage.
Step 3: Design and development
Once the solution has been fixed, the company should prepare a detailed product requirement and specification document. It should contain details around–product robustness, risk assessment, design modularity, time and budget, and ideal design approach. Once the design is ready, the development process gets initiated.
Step 4: QA and release
With the new insurance product now launched, the time to run a quality check comes. Here, the insurance company should test the product by bringing real users into the picture. Once they have shared the feedback on it, the product then goes back to the QA and development team. Before the release of the product version to the group of stakeholders.
Step 5: Maintenance
The last stage in the insurance product development process lies in maintaining the product. In a way that the users and the industry as a whole is able to look up to it as a benchmark. In order to achieve that, the product development and the business team have to work in close connection. Until the time the product is adopted by the masses.
Now, even though the process seems fairly straightforward, there are some challenges that stand in front of an insurance company. When they get to the execution and usage part of it. Let us look at them in the next section.
The challenges of new insurance product development and their solutions
In the age of instant gratification, insurance companies do not have the bandwidth to procrastinate new customer-centric products. They will have to minimize or eliminate the challenges completely throughout the product development cycle.
Here are some of the globally prevalent new insurance product development challenges and their solutions.
Irrespective of how many insurance companies you ask, you will get a unanimous answer that the presence of legacy systems is making it difficult for them to meet their customers’ needs in real-time.
The solution to this can be seen in either launching a completely new system with all the latest technology sets or identifying the processes which are slowing down innovation and replacing them with new digital-focused solutions.
Whatever the option an insurance company chooses, the result of replacing or supplementing the legacy system with new technology will be the same – minimization of cumbersome processes which in turn would shorten the time-to-market.
Process complexity leading to less transparency
Insurance products, because of their information and compliance-heavy nature, tend to be complex. The result of this complexity is that the products are seeing low adoption in their preferred market segment.
The solution around this is to simplify both language and the process. When an insurance company strips off the complex language, they will be able to bring in greater transparency into the picture. On the other hand, the simplification of process in general will make the buying or claim journey speedy and simplified.
One way to simplify the complexity can be using the power of automation and big data to make the process more predictive.
Siloed business functions
Silos between the business and IT functions, market channels are also prevalent in the entire insurance sector. This siloed approach has long made new product development a slow process involving multiple rounds of handoff and contradictory inter-team priorities.
The solution to this issue lies with building a new product development-focused team with stakeholders from every line of function. Only when the insurance company is able to build a multi-skilled team, will they be able to drive their new product development efforts efficiently.
Lack of connected customer touchpoints
Since ages, building a connected client touchpoint and relationship has been a challenge for insurance companies. They often only interact with the customers at the point of sale, at the time of renewal, or during the claim process. Now, for an industry looking to change from being product-driven to customer-driven, this scenario has to change.
The solution to this lies in correct technological integrations and high digital connectivity. Technologies like IoT, Big Data, etc. can get the insurance companies information which they can use to maintain a constant client communication. The abundance of data which can be generated through these techs can also help the insurance companies to strengthen claims.
The insurance industry is soon conforming to the fact that customers no longer buy products, they are buying experiences which the product provides. Now, although there are evident gaps in front of the insurance sector to become truly customer-centric, there are solutions as well. The only thing that should matter is adopting processes that enable a truly customer experience-driven modernization when building a new insurance product.
With the bar raising across the industry to build optimal customer service, future-forward insurance companies can no longer remain stuck in the 20th century product development abilities. It is time for change with iNube.