An Example of Systematic New Product Development for Life Microinsurance

This paper asserts that for a new product to be successful, a critical prerequisite is the systematic new product development process. The paper reviews the process adopted by Co-operation and Relief Everywhere (CARE) in Ghana for developing a life insurance and pension product.

The paper discusses steps that must be followed during the designing and launching of a new product:

• Evaluation and preparation;
• Market research;
• Design;
• Pilot test;
• Roll out.

The authors argue that the process of new product development must be driven by three important considerations:

• Customers;
• Competition;
• Institution.

Describing briefly each stage of new product development, the paper lists the following lessons from the process:

• Following a systematic product development process;
• Selecting the insurer before choosing the lending institution;
• Making sure the relationship facilitator has a strong understanding of insurance;
• Outsourcing assistance where appropriate;
• Having quantitative objectives to track during the test;
• Holding salespeople accountable with incentives and targets;
• Ensuring that there are no subsidies for sales people unless they are directly tied to productivity;
• Approaching regulators only after thorough preparedness;
• Cultivating relationships with credit delivery institutions.