Product complexity considered greatest barrier to success for life insurers

36% of the insurance companies taking part in a Deloitte online poll (see reference below) believed that product complexity is the factor that most often leads to lack of success.

20% said it was unappealing features and benefits, 20% cited uncompetitive pricing, 13% insufficient product compensation, and 11% lack of speed-to-market.

What contributes to complexity?

When companies where asked what contributes to product complexity:

  • 35% said it was evolving customer needs and product features
  • 19% said it was distribution channel needs
  • 18% said it was competition from other financial products
  • 17% said it was impact of regulators
  • 11% cited ‘other factors’.

Product design should be more modular

I believe there is not yet sufficient effort to design modular products – a set of simple products that can be combined together in different ways to meet individual customers’ changing needs.

Reference: Cavaleros, G: ‘New Life Insurance Products are Key to Growth’, Cover, June 2008, volume 21, no. 1

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