Chapter 10

Question 1

define product development

Answer 1

the process of creating or modifying a products-.

Question 2

effective and efficient product development ensures what for the company?

Answer 2

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

Question 3

what are the 3 basic types of new insurance products?`

Answer 3

rate change
revision
new product

Question 4

name the basic 5 steps of product development

Answer 4

product planing
comprehensive business analysis
technical design
product implementation
perfomance monitoring and review

Question 5

At the end of the first 3 steps senior management will determine what?

Answer 5

wheter to

1. continue the development of the BP,
2. request additional informaiton or revision to the product idea
3. drop the new product idea

Question 6

what are the 3 basic activities of product planing?

Answer 6

idea generation
screening
concept development/testing

Question 7

define idea generation when it comes to product planing

Answer 7

involves searching for new product ideas that are consistent with the companys overall product developement strategy and the needs of its target markets.

Question 8

do companies stress over creativity or technical details for new product ideas during idea generation?

Answer 8

creativity

Question 9

define screening when it comes to product planing

Answer 9

a weeding out process designed to evaluate ate new product ideas quickly and inexpensively and to select those ideas that warrant futher investigation.

Question 10

what would a project team look at when screening for new products?

Answer 10

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.

Question 11

define concept testing when it comes to product planing

Answer 11

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.

Question 12

what is a focus group?

Answer 12

small group interviews, led by a moderato in which participants discuss their opinions and feelings about a given topic.

Question 13

What is a comprehensive business analysis?

Answer 13

where the company conducts research to determine how feasible and marketable a proposed product is.

Question 14

what 5 elements are included in a comprehensive business analysis?

Answer 14

1. market analysis
2. product design objectives
3. feasibility study
4. marketing plan
5. marketing projections

Question 15

what is market analysis

Answer 15

an evaluations of all the environmental factors that might affect product sales.

Question 16

define product design objectives

Answer 16

specify an insurance product’s basic characteristic features. Serves as a guideline for the technical design step of the product development process.

Question 17

what is a feasibility study?

Answer 17

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.

Question 18

what are marketing projections?

Answer 18

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.

Question 19

what is extracted from a finanical computer model?

Answer 19

1. cash inflows,
2. cash outflows
3. expected profitability in a variety of circumstances.

Question 20

what are the goals for the finanical design?

Answer 20

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.

Question 21

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
3. set the products g/l and u/w Stds
4. devleop a schedule and budget

Answer 21

all of them

Question 22

who is part of the field advisory council

Answer 22

a group of producers designated to represent and provide feedback from the sales force.

Question 23

define product implementation

Answer 23

establishing the admin structures and processes needed to introduce a product into the marketplace.

Question 24

what 3 concurrent activities are included in the implementation of products?

Answer 24

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.

Question 25

define policy filing,

Answer 25

the act of submitting a policy contract form and any other legally required forms and documents to the appropriate regulatory authority for approval.

Question 26

what information do traning materials proivide?

Answer 26

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

Question 27

what are issue instructions

Answer 27

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

Question 28

define the buyers guide

Answer 28

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.

Question 29

define a policy summary

Answer 29

provides customer with information specific to the policy being purchased, including premium and benefit data for the first 5 yrs.

Question 30

what is the name for the policy summary for an annuity product?

Answer 30

disclosure document.

Question 31

what is a prospectus?

Answer 31

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.

Question 32

to speed up the implementation process a company divides implementation acitivities into two caterogies. day 1 and day 2 functionality. define them both

Answer 32

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.

Question 33

name 12 factors considered in a new insurance product performance review

Answer 33

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.

Question 34

what are 5 benefits to review the product development process?

Answer 34

1. improve sucess rates of future product development projects 2. reduce product development costs 3. improve NP performances 4. shortent hte time needed to bring NP to market 5. engance the product development process by allowing adaptation of best practices and innovative tools to create templates.