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How to approach digital product development

16 November 2021

As an innovative life and annuity software provider, Penn River has a clear strategy for product development. David Shaw, CEO and co-founder of Penn River, answers questions on technology and achieving the right product focus.

1. What effect do silos have on product development, and how do we overcome them?

Probably the most revealing product development statistics that we’ve seen from life insurance companies are these:

  • 82% of life and annuities executives believe product development is a core competency
  • Only 12% of life and annuities executives think they can deliver strong product development innovation – often because of product development silos

At Penn River, from our conversations with product developers we’ve learned some important things about the siloed approach:

  • “The single biggest factor for delayed product introduction is the slow-moving nature of our company silos”
  • It’s not uncommon to have 10-20 teams working simultaneously to launch a product with inconsistent tool sets
  • Market conditions and changes in market needs are reasons for de-prioritisation or abandonment. Slow-moving silos impact product launch schedules

Embracing process efficiency is vital to solve these problems and digitising product development will substantially improve both efficiency and, crucially, user experience.

We have data that shows product developers can achieve as much as a 30% improvement in time to market and a 25% cost saving. Good tooling, unifying product rules and creating a gold copy (single version of the truth) of those rules will do much to reduce silos in life and annuity companies.

Finally, an inefficient product development process can lead to longer-term problems – problems that are not always immediately apparent. There may be a hint of a problem if a client contacts the call centre after receiving a statement, or maybe an illustration doesn’t look quite right, or a problem may surface when a day-two project is being worked on a year later. Even worse, when a regulator calls, you realise the product is not operating as intended.

2. How important is it to place customer experience at the heart of product development?

In a word, vital. Insurance products, by design, are written for consumers – and consumer expectations are evolving. Simple products, easy to understand, simplified (or digital) underwriting and flexibility are all factors product developers look at when considering a market opportunity.

Carriers would be wise to view their own customer experience in relation to product development and should:

  • Storyboard the current experience with journey-mapping
  • Focus on what steps and actions add value
  • Re-engineer the process from a customer perspective


3. What development methodologies work best for insurance products?

Most carriers have a mix of methodologies starting with agile in IT, with other participating departments using waterfall techniques.

True optimisation is achieved only when everyone participates fully in the agile process. Current tools are designed for technologists, not business people, so we need a wholesale change for technology to enable agile throughout the business.

Regardless of methodology, we’ve designed our ProductHub software to digitise product development, create the gold copy of product rules and act as an enabler of modernisation programmes in life insurance companies.


4. Why should insurers embrace cloud-native development?

Cloud-native development is all about taking advantage of what the cloud offers in speed, scale, experimentation through test and learn, and cost.

It’s not enough to have technology running in the cloud. The real benefit is to view the cloud as an enabler. For example, you can:

  • Quickly spin up new environments for test and learn
  • Model thousands of product scenarios to assist with both new-product and in-force pricing
  • Participate in new markets and embedded financial opportunities through open APIs
  • Re-price and make continuous product changes in near real-time
  • Scale at a dramatically reduced price point

Cloud-native development and deployment is the centrepiece of ProductHub. It enables insurers to rapidly innovate and scale new products.


5. As we emerge from Covid-19, how will digitalisation reshape and strengthen insurance products?

One clear benefit is the pace of change. Almost overnight, insurance companies had to figure out how to engage customers and agents with a digital model. Companies had to learn to collaborate digitally and there were many improvised solutions that now need to be optimised.

Some companies think face-to-face collaboration is best and want everyone to return to the office. Others think continuing the remote experience will build back better.

Companies found it hard to attract talent before Covid-19. Imagine, now, sourcing the best talent from any location worldwide − and imagine new relationship models and innovative partnerships. This creative mindset, coupled with tools like ProductHub, will bring a new digital perspective to product development.   

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