Transcript Physicians Planning Services Corp.

Product Development
Tactics
Stephanie Johns-Chin
New Product Development and Marketing
Group Membership Association Division
New York Life Insurance Company
The Company You Keep®
Product Development
Tactics
 The Constant Flow of Ideas
 Effective Use of People
 Management of Process
The Constant Flow of Ideas
 Connections
 The Pipeline
 Communication
Connections
Connections are made from ideas…..
like ripples in a pond
Connections
How Did?
Lead To
Popularity of underwear in
the 12th century
Invention of the
printing press in
14th century
James Burke, Connections,
Simon and Schuster, 1995
Connections
The Constant Flow of Ideas
The Pipeline
Systems/Technology
Demographics
Web
Marketing Channels
Economy
Competitors
Financial Services
Industry
Insurance Industry
Regulatory
Your products
The Pipeline
Economy
Systems/Technology
•Data modeling
• Global
•STP/e-signature
• Credit crunch and the
Mortgage Industry
•Communication –
Cell/Blackberry/Laptop/Wireless
Web
•Information/Advice/Price
• Retirement incomes are
largely dependent on stock
market
•Buy – Retail
•Internet Communities
 Financial Services Industry
Regulatory
•Branch Banking/Credit Card Companies
• Healthcare
•Cross-Sell
• Gramm-Leach-Bliley (GLB) Act – privacy
•Premium billing vehicles
• HIPAA
•Competing products
• Pension Protection Act
•Convergence - Banks buying insurance Co’s
• Do-Not-Mail/Call/email
• Actuarial Guideline CCC
The Pipeline
Demographics
•Multi• Generational
• Cultural
• Multi-lingual
•Population Distribution –From 1990-2000
 Growth of 32.7 million people
Marketing Channels
 Biggest increases in South and West
 54% of population live in 10 most
populated states
•Email
•Social Networks
•Banner Ads
•Twitter
•SEO
•Blogs
•IM
•Facebook
•DRTV
•Linked In
•Direct Mail
•Etc…
•Telemarketing
•Second Life
The Pipeline
 Your Products
 Competitors
•Products
•Take a regular look
•Channels
•Go back to basics
•Market Share
•What about repositioning?
•News
•Client Service
•Best Practices
•Ratings
Insurance Industry
•Other Sectors (i.e., Life/Health P&C)
•Other Lines (i.e., Group Individual)
•Research organizations
LIMRA
 EBRI
 NAIC
 iii
•Industry Publications
National Underwriter
Bank Insurance & Securities Marketing
Employee Benefit Advisor
•Think Tanks
Corporate Executive Board – IAB
•Trade Association
American Council of Life Insurers
American Insurance Association
The Constant Flow of Ideas
 Communication
• Run a “News Service”
• Keep an Open Door …and Ear
• Share Ideas in Incubation Stage
Effective Use of People
 Leadership
 Core Team
 Technical Experts
 Managing the Team
 Environment
Leadership
Area with Primary Accountability for Product
Development
* LIMRA 2007 Individual Life Insurance Product Development Process Research
Leadership
Dedicated Resource
 Charged with product, market, channel
development and competitive analysis
 Marketing background – diverse market experience

Alien in their midst
 Share information, experiences,
insights, ideas and instigate discussion
 Manages the process
Core Team
 Keep the team on the
smaller side - larger
groups generate fewer
ideas
Legal/Compliance
 Diverse teams way out
perform homogeneous
teams over the long
term
 Diversity allows the
team to step into the
intersection of
disciplines, cultures, and
domains in which one
can specialize through
education, work,
hobbies or other life
experiences.
Actuarial
Marketing
Account
Management
Contracts/Filing
Medical
Underwriting
Technical Experts
Sales
Claims
Other Business Units
Legal/Compliance
Actuarial
Marketing
Financial
Reporting
Our Business Unit
Account
Management
Contracts/Filing
Audit
Medical
Underwriting
Systems
Managing The Team
Herding Cats
Financial
Underwriting
Medical Underwriting
Service and
Administration
Claims
17
Actuarial
Managing the Team
How Key Individuals Are Held Accountable for Product
Development Results
LIMRA 2007 Individual Life Insurance Product Development Process Research
Environment
Survey Says….
 Four out of five companies have
dedicated product development
teams*
 For half of these, team members
work exclusively on product
development*
Full Time Focus
Part Time Focus
• Faster timeline
• Focused
• Stale
• Exposure to day-to-day
• Flexibility in Team composition
• Extends timeline
*LIMRA 2007 Life Insurance Product Development Research
Environment
Stay away from


Avoid passing
judgment on each
other’s ideas
Be constructive
and look for ways
to overcome
obstacles
LandLand
of NO!of NO!
Environment
 Respect Diversity
 Ongoing Feedback
 Honest Open Communication
 Empowerment
 Access to key executives
 Time for people to participate
 Dedicated Resources - Must have a point person
 Allocation of Funds
Process
 Traditional Approach
 Recent Trends
 I Would Add….
 Bumps in the road
 Keys to Success
Traditional Approach
The Tried and True Method
 Developed by technical areas (underwriting,
actuarial, claims)
 No market research conducted
 Typically - One size fits all
 Long cycle time to develop
 Build it and they will come mentality
 Marketing Department not involved until product
is completed
 Sold by an Agent (Insurance is not bought, it’s
sold)
Recent Trends
Companies now have:
 Formalized development process
87% of
companies
implemented
new approaches
for the design of
new products
 Enhanced testing process
 More tightly controlled sign-off
procedures
 Improved communication
 Outsourced IT function
 Quality assurance testing done by
business analysts
 Moved tasks from “Day 1” to “Day 2”
LIMRA 2007 Life Insurance Product Development Research
I Would Add…..
 Establish

Timeline/Schedule which must be reasonable and
defined with some built in flexibility

Build in periodic reviews/vetting process of ideas

Accountability for delivery of assignments
 Ensure Measurement

Response Rate

Client Adoption

Profitability
It’s not just
Fire and
Forget!
 Be Prepared to Re-evaluate and Respond
 Marketing is a great place for the process to reside
Bumps in the Road
Most Common Reasons for Schedule Changes
91%
Product Design/Pricing
IT
69%
Organizational priorities
Corporate requirements
Legal issues
Admin req.
66%
22%
19%
16%
LIMRA 2007 Life Insurance Product Development Research
Keys to Success
Strongest correlation of success is the number of ideas
you explore and build upon
Companies that cut R&D costs can actually accelerate
innovation, boost growth and increase profit*.


Apple is considered an innovative company
Spends only 3% of its yearly revenue on R&D.
Foster an open environment allows for true brainstorming



Produce as many ideas as possible
Produce ideas as wild as possible
Build upon each other’s ideas
Make it fun
*Michael Davies, MIT Sloan School of Management
Final Thought…..
Don’t get
caught up in
your
underwear!