PROSE

Question 1

Policies

Answer 1

• Communication policy – clear lines of communication need to be established between in-house project team and any third parties used
• IT policy – IT may be needed, eg to model future cashflows of a product
• Financial policy – policy for financing project should be determined
• Legal policy – advice needed on appropriate wording related to claims so insurer doesn’t end up paying for unexpected claims due to loose policy wording. Also issue of data protection
• Technical policy – how to administer product
• Policies should be established at the start of project and are unlikely to change without good reason

Question 2

Roles/ responsibilities

Answer 2

• Role of sponsor (if shareholders, board may act as sponsor on their behalf)
• Roles of manager and third parties
• Eg for new venture, insurer may rely on third parties such as reinsurers/consultants for data/expertise

Question 3

Objectives

Answer 3

• Identify project objectives
• Premium – can a high enough premium be charged so as product delivers sufficient profit?
• Volume – consider whether sufficient demand exists for product
• Risks will need to be identifies and managed – may collate risks in register/matrix
• Consider likelihood of meeting objectives (if product is appropriately designed and marketed)
• Financial objective – to maximise returns for shareholders given acceptable degree of risk is taken

Question 4

Achieving objectives

Answer 4

• How will objectives be met
• Targets must be set – eg x% market share after 1 year
• Assess target market to determine consumer needs – insurer’s objectives relating to volume are more likely to be met if product meets consumer needs

Question 5

Schedule

Answer 5

• Develop structured breakdown of stages of project
• Include phases (eg data collection, model development)
• Key milestones must be set for reviewing progress of project

Question 6

Quality standards

Answer 6

• Quality of product developed will need to be measured

o Eg based on demand/ surveys