The development of insurance products refers to the whole process from generating product ideas to selling products. In the whole process of product development, insurance company developers must always ensure that the developed products can meet the market demand, meet the requirements of laws and regulations, and achieve the company's financial goals. Product development usually includes the following six steps.
(1) Formal Creativity
Forming creativity is the first step in the design and development of insurance products, and it is the idea and conception of new products that can meet the needs of existing customers and potential customers. Creativity is the basis for the formation and launch of new products, but not every idea can match the real market demand. Whether the innovation of insurance products can finally become a reality has an important relationship with the length and difficulty of product innovation process, the technology owned by insurance companies, the level of marketing management, the source channels and even the number of ideas.
(2) Creative optimization
Product creativity is necessary for the development of new products, but having product creativity does not necessarily make it put into practice, nor does it necessarily make this product a promising new product. Therefore, insurance companies can optimize their ideas according to their specific goals and operational capabilities, with the main purpose of finding good ideas as soon as possible and giving up infeasible or even wrong ideas. Insurance companies can consider the following factors when carrying out creative optimization: the market space of new products; Feasibility of technological progress and new product development; Resource conditions and supporting services required for new product development: marketing and marketing capabilities of new products; Profitability and social benefit evaluation of new products.
(3) Comprehensive business analysis
After optimizing the ideas of insurance products, insurance companies will get some ideas with preliminary feasibility, but whether these ideas are really feasible should also be analyzed in detail from the aspects of product concept, market demand, product suitability and efficiency.
(4) product technical design
The main activities of product technical design include designing contract format, setting the financial value of products, and ensuring that procedures and staffing are sufficient to support all aspects of products. In the process of technical design, actuaries and other members of the product development team should conduct in-depth research to ensure that the new product has a good financial situation.
(5) new product implementation
The implementation of new products first requires insurance companies to report the contract format and obtain relevant documents from the corresponding regulatory agencies, so as to obtain various licenses of products and establish information systems and management measures suitable for the new contract; Secondly, insurance companies need to make plans to promote products, design training materials for sales staff and employees, and employees of the legal department need to browse advertisements and training materials. In some cases, advertisements, training materials and contracts need to be submitted together to ensure compliance with relevant laws and regulations; Finally, the sales team must receive product sales training before they can start selling new products.
(6) product evaluation
In all the processes and follow-up periods of product development, the product development team must ensure that the new product can achieve the financial objectives of the insurance company and abide by the corresponding laws and regulations. After issuing and selling products, insurance companies must constantly monitor the performance of new products and compare them with the expected performance set in the product structure. If the results are not satisfactory, the new products should be adjusted in time, abandoned or replaced with improved products. The information collected in product monitoring can stimulate the generation of new ideas and promote the company to repeat the cycle process of product development.
3. Determination of insurance rates
In the process of developing insurance products, an important task of insurance companies is to determine the price of insurance products. Insurance premium rate is the price of insurance products, and it is an index for calculating insurance premium. The determination of insurance premium rate is the basis of insurance management, and the level of insurance premium rate directly affects the interests of both parties to the insurance contract, and also relates to the level of market competitiveness of insurance enterprises.
The general methods to determine the insurance premium rate are: judgment, classification and increase and decrease.
(1) judgment method. The judgment method, also known as the individual method, refers to the investigation of the risk of each subject matter of insurance one by one, and then the risk assessment is carried out separately, and then the insurance business personnel determine the applicable insurance rates of each subject matter according to the experience judgment. This method is not very scientific, and it depends on the empirical judgment of insurance companies to a considerable extent. However, this method is more suitable for situations where the forms of loss risk are varied, classification cannot be used, or statistical data of an insurance subject matter is lacking. Using judgment method to formulate insurance premium rate requires that the person who determines the premium rate has rich underwriting experience and is familiar with all kinds of risk factors involved in the subject matter of insurance. This method is often used to determine the premium rate of marine insurance and some inland transportation insurance.
(2) classification. Classification refers to the classification of loss risks with similar characteristics into the same category and the collection of premiums at the same insurance rate. Classified rates are usually printed in the rate manual in tabular form, so they are also called labor rates. It is very convenient for insurance personnel to choose the applicable rate to calculate the insurance premium according to the specified conditions when underwriting. For example, in China's export cargo transportation insurance, light industrial products are divided into eight categories, and different rates are applied respectively. For another example, in property insurance, insurance companies generally divide buildings into several categories according to their nature and structure, and each category is divided into several grades to determine the insurance rates respectively.
(3) Increase and decrease method. The increase and decrease method takes the insurance rate applicable to all kinds of insurance objects as the basic rate, and then corrects it according to the actual loss of the specific insurance object at the time of underwriting, and determines the actual insurance rate by increasing or decreasing the basic rate. Where the insured subject matter insured by the applicant is in special danger, or other dangerous liabilities are required to be added in addition to the general dangerous liabilities, if the insurance company agrees to underwrite by special underwriting, it shall increase a certain rate on the basis of the basic rate. On the other hand, when the accident frequency of the subject matter insured is lower than the basic rate standard, a certain rate will be reduced on the basis of the basic rate.
The premium rate consists of pure premium rate and additional premium rate.
(1) pure rate. Pure rate is the ratio of pure premium to insured amount, also known as net rate, which is used for compensation and insurance payment after an insurance accident. The calculation basis of pure rate of property insurance is the loss rate of insurance amount. The factors that affect the insurance payout ratio are: first, the frequency of insurance accidents, that is, the proportion of the number of insurance accidents to the total number of insured objects; The second is the loss rate of insurance accidents, that is, the ratio of the number of people affected by the insurance object to the number of insurance accidents; The third is the damage degree of the subject matter insured, that is, the ratio of the amount of insurance compensation to the amount of insurance subject matter insured in the disaster; Fourth, the ratio of the average insured amount of the disaster-stricken insurance target to the average insured amount of all the insurance targets. Based on the existence of uncertain factors of property risk, in order to ensure compensation, it should also include factors that may cause extra-large losses. Insurance companies should add a certain proportion of stability factor to the pure rate to make the pure rate more scientific and accurate. The net rate of life insurance is calculated on the basis of interest rate and mortality rate.
(2) Additional rates. The additional rate is the ratio of the additional premium to the insured amount. Calculated on the basis of the insurer's business expenses, used for the insurer's business expenses, handling fees and providing part of the insurance profits. Usually expressed as a percentage of the net interest rate. The additional rate consists of expense rate, business tax rate and profit rate. Generally speaking, the operating expenses of insurance companies mainly include the following aspects.
First, business expenses. Including agency fees, advertising fees, taxes and fees, wages, office expenses, training fees, hospitality and so on.
Second, disaster prevention and loss prevention costs. Including the cost of purchasing disaster prevention equipment, disaster prevention publicity and disaster prevention incentives for the insured.
Third, reserves. In order to maintain the stability of insurance finance, insurance companies must accumulate a reserve, that is, the funds prepared when the insurance fund is insufficient to pay for major losses. The premium rate is in the second summer in the insurance premium rate, and the level of the premium rate has a great influence on the insurance food industry to carry out business and improve its competitiveness.
Life insurance rates are also composed of pure rates and additional rates. Different from property insurance, the index reflecting the risk status of life insurance is not the insurance loss rate, but the mortality and survival rate of the population. Therefore, the key to determine the life insurance rate lies in the determination of mortality and survival rate. Insurance companies usually use life tables to determine mortality and survival rates. Life table, also known as death table, is a statistical table compiled according to the death statistics of all ages in a certain period. The most important content in the life table is the mortality rate of all ages. Life tables are usually divided into national life tables and empirical life tables. The national life table is compiled according to the death statistics of all citizens or specific areas, and the data mainly comes from the census statistics. The empirical life table is compiled according to the analysis of past death records of life insurance or social insurance. The mortality and survival rate recorded in the life table are the important basis for determining the life insurance premium rate. When determining the pure rate of life insurance, we should not only consider the mortality and survival rate, but also consider the interest factor. Estimate the interest income of insurance money. Because of interest factors, the value of a fund is different in different periods. ;