The Importance of Collaboration in Product Development

Authors: Michael J. Covert, FCAS, MAAA, Principal & Consulting Actuary, and Terri Hitchcock, JD, Director, Product Design
Collaboration in your insurance organization occurs at multiple levels, all of which are important. During product development, your company’s internal collaboration among actuarial, underwriting and marketing departments is a must. External collaboration between your teams and outside consulting firms keeps your product design, compliance, and actuarial consulting partners on the same page. As consultants, on our end, collaboration between and among our own teams is crucial, as all our departments must operate cohesively to ensure that we can meet our clients’ needs in a timely fashion.
Successful collaboration is not just about making engagements run more smoothly–it also has tangible benefits that are immediately evident.

Collaboration leads to the creation of new and innovative products

Don’t waste time developing insurance products that you won’t be able to realistically implement or that your sales team can’t sell. When you solicit input from key departments, you’re able to think holistically about the products you develop and how they will best serve your customers. Begin brainstorming early with all relevant parties. Keep everyone involved throughout the entire process, to make sure you can adjust your product if needed and address potential hurdles likely to arise from regulators.

Collaboration helps consultants serve you better

Sometimes our clients think that partnering with an underwriting, operations, or a consulting firm like Perr&Knight gives them free license to hand over the project and never touch it again. While it’s our job to take on the lion’s share of the work in many cases, the most successful engagements are ones where insurance companies maintain at least some ongoing involvement. Yes, consultants provide guidance and produce recommendations, but there are still many decisions that can only be made by you. Non-involvement creates the additional need to track down required information that can slow down timelines dramatically and potentially result in needless errors.

Collaboration leads to faster approvals

Not only should all your internal teams and external consulting partners be on the same page, but you should loop in regulators as early as possible. This piece of the puzzle is often overlooked. Regulators are often seen as the “big bad wolf,” but the more open you are in your communication, the more of a friend the regulator can be. Another benefit is that, ultimately, fewer questions arise and less back-and-forth is required. 

Tips to maximize the benefits of collaboration:

• Understand the need for your continued involvement with external consultants. Know up front the role you’ll be required to perform. At the onset of the engagement, confirm the expectations on all parts as to your required involvement. This will prevent possible misunderstandings down the road.
• Facilitate ongoing collaboration among all involved parties when developing new insurance products or launching a new IT solution. For example, before you get too far into the development of forms and rates, make sure your IT infrastructure capabilities match what you want your policies/rates to do for you. Get input before you start making the big decisions.
• Don’t rush too much. Never prioritize speed-to-market over thoughtful insurance product development and due process. By deliberately involving all relevant parties–from internal teams to regulators–you can avoid the oversights and errors that cause unnecessary delays.
• For large engagements, implement regular status updates. In addition to a good project plan, weekly calls, emails and/or an ongoing status report allows everyone to see priorities and how the project is proceeding.
• Trust your subject matter experts. Whether you’re launching an entirely new product or tweaking an existing product, solicit input from product design, compliance, and actuarial consulting firms before going deep into development. This will help you understand realistic expectations about the viability of your proposal and your estimated timelines.

Remember, ultimately insurance is a people business. At the end of the day, the decisions you make will have a real-world impact on the individuals and businesses you serve. Don’t hesitate to pick up the phone in place of an email. Sometimes the most effective form of collaboration can be simple voice-to-voice communication.
For ideas about how to facilitate greater collaboration within your organization or with consulting partners or regulators, contact Perr&Knight at (888)201-5123 ext. 3.