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Previously, insurers only engaged in product development on an as-needed basis. Mainly due to the process being painstakingly long and characterized by protracted lead times and product rollouts. Besides, having to involve various teams i.e. from claims, IT, underwriting, sales, marketing and legal; holding endless meetings; doing numerous drafts and reviews; there were also the costly mistakes and delays that had to be dealt with afterwards. All this was somewhat mitigated by the fact that the product lifecycles then rather than now were relatively long – up to 30 years in some cases. This meant that insurers had ample time to come up with ideas, deliberate over them, process them and even iron out any mistakes that arose.
The current era of hyper-competition and market volatility has shortened the average product lifecycle to an estimated 5 years – shorter with technology that averages 18 months. On the other hand, the time it takes to introduce a new insurance product, from idea to market is an estimated 6 – 12 months. Going by these estimates, it looks like an insurer only has about 4 years to turn a new product profitable, and even less once competitors step in, and replicate.
With shortened product life cycles, comes the need to keep innovating; to develop and introduce new products to market at high speeds in order to gain and maintain a competitive advantage and not miss any lucrative opportunities. This need for speed-to-market becomes almost impossible for insurers still running rigid legacy systems with outdated processes and technologies. Streamlining the product development processes is crucial to ensuring that the right products are developed and efficiency achieved in resource utilization.
Product configuration, which centralizes and streamlines the product development process, is one way that insurers running legacy systems can accelerate their product development lifecycle. With product configuration, product information can be stored in a common database and shared across all systems. With critical information such as ratings, rules, forms, fillings and activity history readily available to all parties, then errors and omissions are eliminated and there is reduction in duplication making the process faster and less costly.
Going a step further and of greater benefit however is an enterprise-wide solution, which will not only automate product development and provide a centralized repository but will also provide insurers with visibility into key tasks and teams involved in the process for easy tracking and effective management. An enterprise-wide solution enables workflow-driven processes that ensure all participants in the process review and sign off where required. Subsequently, there is reduction in product development costs and bottlenecks to result in improved speed-to-market and quality products as well as the ability to develop and modify products concurrently leading to increased revenue.
Over the last 20 years, Turnkey Africa has been providing customized enterprise-wide insurance solutions for some of the largest insurers and intermediaries across Africa. Leveraging our core insurance platform TurnQuest Insurance Suite – this clients have gained the ability to rapidly design and build innovative and tailored solutions to meet the needs of an ever-evolving customer and market base. Having shade off the weight of legacy systems, these insurers now have the agility and flexibility required to put them at the top of an insurance market that is growing increasingly volatile.
Finally, it is crucial to have a product innovation and technology strategy with a clearly defined objective and area of focus. Such a strategy if driven by the company’s strategic vision and backed up by top management helps reinforce the role of product development in the overall business goal and facilitate on-going product development to compete into the future. Stakeholder buy-in for both the technology and product development strategies not only heightens the company’s ability to absorb the new technology efficiently and put it to work effectively but also to realize the inherent value of the technology.
