Product Development: Making Microinsurance Products Successful

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.