Flashcards in Chapter 10 Deck (34):
define product development
the process of creating or modifying a products-.
effective and efficient product development ensures what for the company?
1. new products are consistent with insurers overall strategic marketing objectives
2. NP serve designated taget markets appropriately
3. company does not waste its resources on unsuccessful new products
4. new products generate enough revenue to pay associates benefits and expenses as well as return a modest profit to company owners
what are the 3 basic types of new insurance products?`
name the basic 5 steps of product development
comprehensive business analysis
perfomance monitoring and review
At the end of the first 3 steps senior management will determine what?
1. continue the development of the BP,
2. request additional informaiton or revision to the product idea
3. drop the new product idea
what are the 3 basic activities of product planing?
define idea generation when it comes to product planing
involves searching for new product ideas that are consistent with the companys overall product developement strategy and the needs of its target markets.
do companies stress over creativity or technical details for new product ideas during idea generation?
define screening when it comes to product planing
a weeding out process designed to evaluate ate new product ideas quickly and inexpensively and to select those ideas that warrant futher investigation.
what would a project team look at when screening for new products?
1. compatible with company's corporate goals and existing systems and distribution channels
2. satisfies a real need in the target markets inw hich the company operates
3. replaces slaes of exsitating products instead of generating new sales.
define concept testing when it comes to product planing
its a maketing reseach technique desgined to measure the acceptability of new product ideas, new promotion campaigns or other new marketing elements before entering productions.
what is a focus group?
small group interviews, led by a moderato in which participants discuss their opinions and feelings about a given topic.
What is a comprehensive business analysis?
where the company conducts research to determine how feasible and marketable a proposed product is.
what 5 elements are included in a comprehensive business analysis?
1. market analysis
2. product design objectives
3. feasibility study
4. marketing plan
5. marketing projections
what is market analysis
an evaluations of all the environmental factors that might affect product sales.
define product design objectives
specify an insurance product's basic characteristic features. Serves as a guideline for the technical design step of the product development process.
what is a feasibility study?
research designed to determine, from an operational and technical viewpoint
1. how viable it would be for the company to produce and offer the product
2. hor the new product would impact the company's existing products.
what are marketing projections?
preliminary sales and financial forcasts that include extimates of potential unit sales, revenue, costs and profits for a proposed product.
-helps determine how finanically viable a new product will be.
what is extracted from a finanical computer model?
1. cash inflows,
2. cash outflows
3. expected profitability in a variety of circumstances.
what are the goals for the finanical design?
1. ensure company can cover future benefits and expensis
2. create a package of benefits that will appeal to produces and customers
3. provide adequate return to the company;s owners.
which of the following are included in the goals for the product development team?
1. establish a product's financial design
2. create application forms and sales conracts
2. set the products g/l and u/w Stds
3. devleop a schedule and budget
all of them
who is part of the field advisory council
a group of producers designated to represent and provide feedback from the sales force.
define product implementation
establishing the admin structures and processes needed to introduce a product into the marketplace.
what 3 concurrent activities are included in the implementation of products?
1. obtaining necessary regulatory approvals
2. designing promotions and training materials
3. developing and implying all information systems and procedures necessary to market and administer the product.
define policy filing,
the act of submitting a policy contract form and any other legally required forms and documents to the appropriate regulatory authority for approval.
what information do traning materials proivide?
1. the features and benefits of NP
2. intended market for product
3. sale ideas and approaches
4. compensation for selling the product
5. how to fill out and submit applications or transaction requests
6. regulations regarding the procuts
what are issue instructions
g/l showing the policy forms approved for use in each jurisdiction and the requirements that various functional areas need to follow when selling or administrating the new product
define the buyers guide
a publication that explains to customers how to determine how much life insurance coverage they need, describe the various types of life insurance policies and educates customers about how to compare the costs of similar types of policies.
define a policy summary
provides customer with information specific to the policy being purchased, including premium and benefit data for the first 5 yrs.
what is the name for the policy summary for an annuity product?
what is a prospectus?
a written document describing specific aspects of the security being offered for sale such as the insurer investment philosophy and objectives, fund expenses and fees and past product performances.
to speed up the implementation process a company divides implementation acitivities into two caterogies. day 1 and day 2 functionality. define them both
1. day 1, represents the administrative and systems processes that must be in place and functioning when the first contract is sold.
2. day 2 functionality represents the processess that are necessary at some future date to service and administer the product,- implemented after lunch.
name 12 factors considered in a new insurance product performance review
1. total face amount
2. number of policies sold
3. profits compare to expected
4. amount of new premium income
5. impact on other products
6. number of new policy owners
7. impact on campany's market share
8. increase in comapny value
9. demographic characteristics of purchasurs
10. policy laps rates, loans, and claims
11. sales success of various distribution methods
12. success of various advertising campaigns and sales promotions.