Life insurance and annuity product development

The paradigm shift in product development is potentially a result of the customer-centric mindset shift. Many insurers are reconsidering outdated product-driven business models to meet customer experience–driven market expectations.

Customer centricity is taking the center stage of product development for many insurers. Product features and design are becoming more focused on customer requirements and their feedback, over what is an easy fix for a carrier. Putting customers center stage in the new product development process is also leading to a better success rate for the carriers—a win-win situation for all.

Carriers are building dedicated processes and teams to gather customer feedback while initiating the product design process—evident in the average number of days spent on product design. Personalization of every touch point with the customer has increased the need for a seamless and efficient product journey. Technologies such as wearables are increasing the constitution of life insurance products and to customers’ benefit, with the result that many insurance companies are playing an active role in shaping customer health.

Leading insurers are moving away from traditional static approaches and adopting technology and data-driven methods, while shifting from operational tasks to breakthrough innovations. Data-driven product development is becoming a new necessity for insurers to stay relevant and competitive in today’s dynamic and customer-first market. Successful insurers are incorporating technology and innovation across every stage of the product development process.

Successful insurers have well-documented and integrated product development processes with clear visibility of cost, schedule, product quantity and quality. They have integrated the product development into the overall insurance value chain and involved all departments and processes throughout the product development life cycle instead of operating in silos. These changes enable an end-to-end view of the process and therefore save time and effort when moving through the different phases. They have established robust metrics about products and processes to predict product performance and the end of a commercialized product's life cycle. These insurers focus on continuous process improvement and cost-optimized product development and end-of-life processes.

Artificial intelligence (AI), machine learning (ML), process automation, robotic process automation (RPA) and blockchain aren’t just buzzwords for the technology industry. They have become reality across every industry and sector. The life and annuity (L&A) segment as well can benefit from these new technologies and build several use cases—including in product development, enhanced customer experience and operational excellence.

• Artificial intelligence—AI can speed product design by testing myriad design ideas and permutations while also analyzing customer feedback. This can help carriers better tailor their products to meet customer preferences and demands. Apart from this, AI can help analyze data gathered during the product development process, generating insights to improve products and help make decisions across the value chain.
• Generative AI—Chatbots powered by GenAI can transform the communication among different team members and probable customers. AI bots can act as customers based on data processed through machine learning and predictive analytics. This can help teams test product features accordingly for near-real customer feedback without actually launching the pilot product. Apart from creating a virtual prototype, GenAI can also help build codes faster for technology admin systems using natural language processing.
• Workflow process automation—There are several third-party applications that automate process flows within the product development cycle and can be easily integrated into the admin systems. Such automation tools can help expedite the end-to-end processes and improve cross-communication interactions by reducing dependencies and solving bottlenecks.