For example, taxation and levies would be added at the base level, since they apply to the entire portfolio, and that single change would update every product in the portfolio. On the other hand, a unique price proposition for a specific customer segment, channel and product would only need to be specified at the individual product level, requiring minimal testing as this change only affects a small part of the portfolio. This strategy lets carriers rely on a smaller set of base products, making fast and easy modifications to each to create more specialized versions for specific scenarios.

Related: Keys to developing customer-centric technology

The benefits of sophisticated simplification include:

Speed: Price updates within hours; rating factor/product feature updates within days; new products launched within weeks.
Re-use: Decreased product element duplication.
Standardization: Decreased product and feature design time, leveraging proven products and features.
Comprehensiveness: All product information captured, from eligibility, pricing and packaging to underwriting guidelines and forms.
Rationalization: Overall product quantities decreased.

Product development

We see many insurers releasing large numbers of products with minor differences for varying channels such as adding loyalty factors, discount structures or pricing tables. This is an expensive and time-consuming process that could be avoided with the help of sophisticated simplification; changes like these can be applied to hundreds of products simultaneously in as little as a minute with modern core systems – at no additional cost – by leveraging attribute inheritance. The full product development lifecycle, including requirements, testing and deployment, can take just days if automated testing is used. This principle applies not just to pricing, but also:

Underwriting logic
Product eligibility rules
Bundling and packaging
Discounting
Screens (intuitive and dynamic question sets)
Forms (automatically and dynamically tailored to specific offerings)

This kind of speed and agility can only be achieved if insurers use the right technology, product architecture, product development process and operating model. The importance of moving beyond legacy systems to grow in a P&C world is increasingly driven by consumer expectations. It's no small challenge to make such a dramatic transition, but we may find the carriers that succeed in the future will be the ones that make these investments now.

Special Reports /

Managing the cost of technology implementation

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