Product Design And Stakeholders Flashcards
What needs does IP meet?
Replacement income after employee benefit
Monthly loan repayments
Other premiums
Locum protection against losses and costs of temp staff
Who are the stakeholders?
Insurer Customer Regulator Distributor State
What needs does CI meet?
Medical costs Repay mortgage or other loan Income from purchasing annuity Key person insurance, buy out partner Rehab Change of lifestyle
What needs does LTCI meet?
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
What needs does PMI meet?
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
What needs does micro insurance cover?
Working on low incomes Basic components Affordable Peace of mind Simple
Along with customer needs, what else is important to attract customers?
Peace of mind Simple Clear Affordable Desired level of guarantee versus reviewable premiums or benefits
When would a PMI provide cash?
Health cash on certain events e.g. Physio/glasses
Daily benefit if policyholder takes state treatment which has no cost
What are the types of budget PMI?
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)
For a dental plan, what are the two bases?
Capitation - insurer and dentist agree fixed sum per annum per mouth insured
Indemnity - insurer covers actual cost of treatment
For a personal accident plan which 3 things should be thought about?
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
How does IP provide peace of mind?
Keep dependents lives the same when ill/lower paid job
Repayment of high cost loans like mortgage
How does CI provide peace of mind?
Financial peace of mind from expensive surgery etc.
How does LTCI provide peace of mind?
Financial security for long term care costs
Time not taken of family or friends
How does PMI offer peace of mind!
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
What are the problems of simplicity and clarity for IP, that might annoy policyholders
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
What are the problems of simplicity and clarity for CI, that might annoy policyholders
Exclusions
Point of claim underwriting not laying out
Differing definitions between insurers
More severe definition than normal persons understanding
What are the problems of simplicity and clarity for LTCI that might annoy policyholders
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.
What are the problems of simplicity and clarity for PMI, that might annoy policyholders
Underwriting and acceptance Not understood Limits and exclusion clauses confusing Pre authorisation is not liked Hospital bands not liked Cost sharing not understood
In policy design factors, explain finance and capital req
Benefits and charges should minimise fin req
Gtees influence starting reserve hence fin req
In policy design factors, explain options
Ensure need for them
Ensure adequate reserves at start
In policy design factors, explain culture
Reflects style and culture of company
In policy design factors, explain consistency
Charging and benefit structure similar to other products
In policy design factors, explain ext xs/equity
May be necessary to spread expenses across products
Must keep rights for policyholders equal
In policy design factors, explain regs
Accurate reports filed
Insurer will stay solvent
Customer detriment on sales, admin, claim minimised
In policy design factors, explain marketability
Structure charges benefits not far from comp
Salesmen trained
In policy design factors, explain profitable
Sufficient margins for profit
Remaining sellable
In policy design factors, explain competition
Structure charges price close to comp
In policy design factors, explain uw
Exclude pre existing condition
Fundamental to design and price
In policy design factors, explain reinsurance
Expertise and training
Influences policy limits
In policy design factors, explain ditribution
Sufficient sales incentive to encourage distribution
But not misselling!
