Idea in Brief
Life insurance new product development generally suffers from two major issues:
- The long lead times required to generate a new product idea and subsequently bring that idea to market.
- The widespread dissatisfaction with the quality of innovation in the current crop of new product ideas.
To assess these issues more closely, RGA conducted its first global survey of life insurers in mid-2014 to determine and quantify possible root causes. Responses were received from more than 100 product development leaders in 12 countries in Europe, Asia, and the Americas.
Answers addressing the insurance product development cycle indicate clearly that speed-to-market remains an ongoing issue. The average time needed for a company to take a new product idea through development to launch currently ranges from six to nine months. Variations depend, for the most part, on two factors: whether the product is savings, risk or living benefits, and the geographic region in which the product is being developed. Insurers in the Europe, Middle East and South Africa (EMEA) region, for example, bring more products to market and do so more quickly than do insurers in the Asia Pacific (APAC) region and in the Americas.
As for quality of innovation, it was surprising to discover that life insurers in most countries do not actively solicit market input from consumer focus groups, market surveys or informed external experts such as reinsurers, actuarial consulting firms or their company’s head offices. Instead, they continue to rely primarily upon competitive intelligence and existing market practices.
The selection of results presented herein reflect several stark implications for today’s executives managing life insurance product development. The benchmarks that will be established will represent opportunities to improve the new product development process as well as enhance innovation for life, living benefits and savings products.