Product Development

Someone once said, ‘Insurance is not something that is bought, it is something that
has to be sold’. We shall recall this when discussing marketing and promotion (4.3
below), but to the extent that it is true the whole exercise depends upon having something
to sell. That something may be described as an insurance product.
Some insurances, of course, are compulsory (e.g. third party motor and
employees’ compensation), but even with these classes the precise policy wording is not
decreed by the Government. Therefore there is scope for flexibility in presentation (whilst
the requirements of Ordinances must be respected). With other classes of insurance
business, Hong Kong is an open and very competitive business environment. Insurers
must therefore be efficient and dynamic in preparing the products they ‘sell’. As an
abbreviated summary, the Product Development department/section of an insurer will be
much occupied with:
(a) Individual product development: this is a never-ending process. With
competitors eager to learn and copy, it has been said that the unchallenged
‘lifespan’ of a totally new product is very short, perhaps a matter of only a few
weeks or months. After that time, the product has been copied, adapted and
frequently undersold.
(b) Product portfolio development: increasingly, producing a ‘package’ of cover,
especially for larger clients, has become sensible, even vital, in order to retain a
competitive edge.
(c) Product research: we may think of this in three areas:
(i) our own products: nothing is perfect beyond improvement.
(ii) competitors’ products: we do not, and cannot, live in a vacuum. It is
essential to know what is happening in our market and ‘what we are up
against’. Besides, they will have no hesitation in ‘borrowing’ from us!
(iii) market trend: the needs of the general public