Product Development Best Practices

by Donald Light, March 20, 2006

Abstract

San Francisco, CA, USA March 20, 2006

Celent identifies externalization as the key to best IT practice in product development across the insurance industry.

In a new report, , 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傭ut 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.

A table of contents is available online.

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

San Francisco, CA, USA March 20, 2006

Executive Summary 3
Introduction 4
Three Types of Product Development 5
Drivers For Product Development 7
Product Development Phases 9
Project Management, Governance and Key Metrics Best Practices 13
Business Case Best Practices 15
State Filing Best Practices 17
IT Best Practices  18
Concluding Thoughts 24
Objectivity And Methodology  25

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