In a new report, Product Development Best
Practices, Celent looks at the increasingly important topic of product
development in the insurance industry. According to the report, insurers
need to develop product development plans with input from the field and
should use technology that permits changes to be made externally from
legacy programs.
The report differentiates among three different
motivations for product development (strategic, competitive, and
compliance) and three kinds of new products (true new, re-craft, and
refresh). Celent also dissects the product development process into four
phases (assess, design, implement, and operate) that rest on a foundation
of project management and governance.
"Many insurers have inflexible legacy systems
for pricing, underwriting, policy administration, billing, and claims. In
the long run, insurers replace inflexible core systems—but product
development is never done in the long run. It needs to be done now, or at
least over the next couple of quarters," says Donald
Light, senior analyst and author of the report.
"The general answer for insurers is to
externalize. This means that an insurer has technology that allows it to
develop products and supporting processes that do not require
reprogramming legacy systems," he adds.
The 26-page report contains six figures and three
tables.
