Xuber, part of CSC
Entering a new program business can be a daunting endeavor, but a combination of up-front research, evaluation and solid planning can minimize risk and disruption, boost profitability and maximize the chance for success.
Done right, creating a new program business can provide a wealth of opportunity for an insurer. It’s imperative that insurance organizations not only stand up the new program quickly, but to do so in an effective and efficient manner. It’s a lot easier said than done.
Following are six key factors that insurers need to consider in order to maximize success as they contemplate – and plan – a new program business.
1. Take First Steps
As an organization contemplates entering a new program business, it should take the following four measures to determine if the effort fits the company’s long-term goals and is within its capabilities.
- Do your research. First, you’ve got to research the market and then have extensive conversations with your team to determine the viability of the effort, what you’ll need to do to make it a reality and gauge the potential profitability of the new program.
- Make sure it fits. Avoid simply jumping into a new program because it’s a hot trend. Verify that the new program is a good fit and that it will align with the corporate goals, business culture, and long-term growth strategy – in addition to aligning with the needs and requirements of your customers.
- Create a game plan. Develop a comprehensive strategic business plan for each program.
- Check bandwidth. Determine if the organization has the internal bandwidth for the new program business. Review your current capabilities and see where you might need some outside help.
2. Market the New Program
Implementing a great marketing plan is essential. Insurers must look at marketing budget – and decide if it will be a co-shared marketing effort with distribution partners. The right messaging is key: you will have to identify the qualities that set your program apart from the similar programs out on the market, and then highlight these differences in your marketing message.
3. Consider Costs and ROI
It won’t make sense to create a new program if it’s not likely to be profitable. Calculate how much money you need to invest in the program to ensure success, taking all costs into consideration. Before proceeding, make sure you have a solid ROI case for the program.
4. Set Long- and Short-term Goals
The goals and objectives, both near term and long term, need to be identified early on. Near-term goals might include successfully standing up a new program in a short period of time – but long term goals, like identifying what an organization is looking to accomplish with the new program, are critical when just getting started. Maybe you’re looking to gain a competitive edge, or take advantage of an industry trend like cyber liability. Or perhaps you are aiming to boost customer satisfaction and account stickiness.
5. Examine Enabling Technologies
The next step is to look at the underlying technologies you will need in order to deploy and deliver the product to market. Assess your current technology that’s already in place to see if it’s adequate to enable the new program’s distribution – and find out where you might be coming up short. In some cases, it is more cost effective and efficient to purchase new technology versus adapting an existing legacy system.
6. Look for a Technology Partner
After you’ve assessed your current capabilities and you’ve figured out where you might need supplemental help, identify potential partner organizations for this business. Be sure to choose a partner with deep insurance industry experience and expertise in new program development. A technology partner must have ample resources necessary to implement the program, and stand it up in a reasonable timeframe. Look for a technology provider that offers superior software configurability and componentized software, so you don’t have to rip and replace if all you need is a portion of the offering. And finally, make sure you choose a technology partner that can customize a tailored solution to suit your organization’s unique needs. When selecting a technology partner, remember that you are entering into a long term relationship and the people inside the organization are often just as important as the software you are purchasing.
Xchanging offers market-leading insurance software, Xuber, which has served the global complex commercial insurance market for more than 40 years. Xchanging is now part of CSC, the no. 1 provider (by revenue, clients served, dedicated insurance people and countries served) of insurance software technology and business process services to the global insurance industry.
To learn more about Xuber’s Global Portal visit us at http://www.xuber.com/