9.3 The product development process Flashcards
What is the result of new products in a market in which existing products cover most basic customer needs?
A more complicated and opaque product
Details of interest rate swap financial product:
- Small business customers would pay a lower rate of interest on a business loan if interest rates went up, but a higher rate of interest if interest rates went down
- Businesses believed the products to be an interest rate cap that would save them having to pay a rise in interest rates, but the same rate as before if rates were to fall
What is the European Court of Justice?
An institution that interprets the law of the EU
What did the ECJ rule in 2011?
It is illegal under gender discrimination law for insurers to offer different prices for men and women
How have direct line used the ECJ ruling of product development to fuel product development?
- It introduced a scheme called ‘DrivePlus’ that allows safe drivers in 17-25 age group to save up to 20% on their car insurance premium
- To qualify, driver must have a ‘telematics’ black box fitted to their car which monitors driving behaviour, data is then fed back to the insurance company who judges the degree of safety of driving and gives a discount according to their score
Example of a bank redesigned current account products to appeal to customers disgruntled by overdraft charges:
Santander ‘Everyday Current Account’ offers a free arranged overdraft for the first four months for new customers switching via the bank’s ‘Switcher Service’
Who took over responsibilities from the OFT when it closed?
- FCA
- ASA
- CMA
What happens normally if there is a crash involving an uninsured driver, even if the insured party is not at fault?
The insured party receives no compensation
What does Direct Line’s ‘Uninsured Driver Promise’ do?
Protects insurance policyholders against uninsured drivers
