Paper
Product Development: Making Microinsurance Products Successful
Outlining major steps in the structured microinsurance product development process
This note states that:
- The product development process is critical to the success of any new product;
- The microinsurance product development process is continuous, and is designed to ensure the efficient delivery and monitoring of appropriate products;
- Every step is informed by:
- The needs and abilities of low-income consumers,
- The activities of the competition,
- The capacities and objectives of the institutions offering the microinsurance product;
- The product development process helps to:
- Tailor products to the markets needs,
- Prepare institutions to effectively offer the product and educate the market,
- Minimize the potential of failure of the new product,
- Improve potential policy-holder satisfaction.
Further, it states that:
- MFIs and insurers often skip the product development process because it is too complex and resource consuming, but this leads to slow growth or failure of the product;
- A structured microinsurance product development process involves the following steps:
- Understanding demand and supply,
- Prototype development and testing,
- Partner selection and preparation,
- Product finalizing and process design,
- Pilot testing and analysis,
- Rollout.
The note concludes by listing the following benefits of the product development process:
- Faster acceptance by potential clients;
- Better renewal rates;
- Limited chances of systems or process failure;
- Increased trust and confidence from a skeptical market;
- Increased client loyalty to the institution.
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