Product Design And Stakeholders

Question 0

What needs does IP meet?

Answer 0

Replacement income after employee benefit
Monthly loan repayments
Other premiums
Locum protection against losses and costs of temp staff

Question 1

Who are the stakeholders?

Answer 1

Insurer
Customer
Regulator
Distributor
State

Question 2

What needs does CI meet?

Answer 2

Medical costs
Repay mortgage or other loan
Income from purchasing annuity
Key person insurance, buy out partner
Rehab
Change of lifestyle

Question 3

What needs does LTCI meet?

Answer 3

Avoid dependence of family and friends
Something like indemnity
Finance expected cost of care
Finance expected levels of assistance
Comfort not relying on state benefits
Provision for at home/residential/medical care
Payments increasing as disability worsens

Question 4

What needs does PMI meet?

Answer 4

Not going bankrupt due to medical costs
No waiting
Higher standard of accomodation
Doctor of choice
Local hospital
Costs if no state system
Costs if salary exceeds those allowed for state benefit

Question 5

What needs does micro insurance cover?

Answer 5

Working on low incomes
Basic components
Affordable
Peace of mind
Simple

Question 6

Along with customer needs, what else is important to attract customers?

Answer 6

Peace of mind
Simple
Clear
Affordable
Desired level of guarantee versus reviewable premiums or benefits

Question 7

When would a PMI provide cash?

Answer 7

Health cash on certain events e.g. Physio/glasses

Daily benefit if policyholder takes state treatment which has no cost

Question 8

What are the types of budget PMI?

Answer 8

Micro insurance (budget, simple, clear)
Health cash (cash on certain events like new glasses)
MME (lump sum to pay for major surgery like cancer treatments)
Dental plans
Excess plan (PMI with excess)
Optical plan
Personal accident (cash on loss of limb)
Waiting list plan (PMI is state waiting over 6 weeks)

Question 9

For a dental plan, what are the two bases?

Answer 9

Capitation - insurer and dentist agree fixed sum per annum per mouth insured
Indemnity - insurer covers actual cost of treatment

Question 10

For a personal accident plan which 3 things should be thought about?

Answer 10

Measure of exposure to which premiums are related
Claim characteristics - High claims, few delays, stable frequency
Risk and ratings factors - depends on risk of job, premiums often independent of sex and age

Question 11

How does IP provide peace of mind?

Answer 11

Keep dependents lives the same when ill/lower paid job

Repayment of high cost loans like mortgage

Question 12

How does CI provide peace of mind?

Answer 12

Financial peace of mind from expensive surgery etc.

Question 13

How does LTCI provide peace of mind?

Answer 13

Financial security for long term care costs

Time not taken of family or friends

Question 14

How does PMI offer peace of mind!

Answer 14

If no state benefit, cost of treatment may cause financial problems
If state benefit, peace of mind from no waiting list (no income while wait),
Quality of treatment
Quality of accomodation

Question 15

What are the problems of simplicity and clarity for IP, that might annoy policyholders

Answer 15

Need to apply benefit limits
Payouts not always linked to current salary
Complex underwriting putting people off
Not paying claims due to exclusions
Objective criteria are hard to come up with

Question 16

What are the problems of simplicity and clarity for CI, that might annoy policyholders

Answer 16

Exclusions
Point of claim underwriting not laying out
Differing definitions between insurers
More severe definition than normal persons understanding

Question 17

What are the problems of simplicity and clarity for LTCI that might annoy policyholders

Answer 17

Cash inadequacy versus the claim pays for care
Maximum benefit
Limited time paid for
Different levels create complexity
ADL must be explained to purchaser. Not simple.

Question 18

What are the problems of simplicity and clarity for PMI, that might annoy policyholders

Answer 18

Underwriting and acceptance Not understood
Limits and exclusion clauses confusing
Pre authorisation is not liked
Hospital bands not liked
Cost sharing not understood

Question 19

In policy design factors, explain finance and capital req

Answer 19

Benefits and charges should minimise fin req

Gtees influence starting reserve hence fin req

Question 20

In policy design factors, explain options

Answer 20

Ensure need for them

Ensure adequate reserves at start

Question 21

In policy design factors, explain culture

Answer 21

Reflects style and culture of company

Question 22

In policy design factors, explain consistency

Answer 22

Charging and benefit structure similar to other products

Question 23

In policy design factors, explain ext xs/equity

Answer 23

May be necessary to spread expenses across products

Must keep rights for policyholders equal

Question 24

In policy design factors, explain regs

Answer 24

Accurate reports filed
Insurer will stay solvent
Customer detriment on sales, admin, claim minimised

Question 25

In policy design factors, explain marketability

Answer 25

Structure charges benefits not far from comp

Salesmen trained

Question 26

In policy design factors, explain profitable

Answer 26

Sufficient margins for profit

Remaining sellable

Question 27

In policy design factors, explain competition

Answer 27

Structure charges price close to comp

Question 28

In policy design factors, explain uw

Answer 28

Exclude pre existing condition

Fundamental to design and price

Question 29

In policy design factors, explain reinsurance

Answer 29

Expertise and training

Influences policy limits

Question 30

In policy design factors, explain ditribution

Answer 30

Sufficient sales incentive to encourage distribution

But not misselling!