Product Development - Case Study for Joint Regional Seminar 2016
You work for JRS Company, which is a top life insurance company in the market selling a wide spectrum of products. Your products cover various business lines such as Life, Personal Accident and Health. The Agency Channel is currently the sole distribution channel for JRS. Recently, your company has suffered worsening claims experience from a Standalone Cancer Product, called CancerProtect. Its experience is much worse than other Critical Illness products in JRS. The management team is very concerned about the risk and forms a Cancer Special Investigation (CSI) committee to further investigate the issue. You are assigned to look from a variety of viewpoints and provide insights that may be beneficial for the decision making process.
Committee Composition
You are part of the CSI committee representing one of the stakeholders:
(i) Actuarial, (ii) Product Development, (iii) Agency Management, (iv) Senior Management.
Firstly, discuss with your sub-team about the stance on this issue and elect a team leader. Remember the role you are playing and your interests. Then, you will come into a CSI committee meeting with other stakeholders and analyse the problems. By the end of the meeting, you would need to agree on the remedial action with below possible options:
a)Increase Premium for CancerProtect
b)Change CancerProtect Product Design
c)Stop Selling CancerProtect
d)Others (please specify)
Supplementary Information
CancerProtect Product Spec
Issue Age:0-60
Policy Type:Basic Plan
Coverage Term:10 years / 20 years / 30 years / To Age 80
Premium Term:10 years / 20 years / 30 years / To Age 80
Waiting Period:90 days
Benefits:
Cancer Diagnosis -100% Sum Assured upon being diagnosed Major Cancer;
Policy terminates thereafter
Death -Refund of Total Premium Paid
Underwriting:Full Underwriting
Issue Limit:MY$5,000 (min) –MY$2,000,000 (max)
Sales Figures
Launch Year:2010
New Business Premium:MY$3,000,000 per annum (~10% of CI new business sales)
Average Sum Assured:MY$500,000 (average SA for other CI products ~ MY$50,000)
Customers' Voice
"I love CancerProtect – it fills the gap in market to provide pure protection product"
"CancerProtect is simple and value for money!"
"My agent is very thoughtful, she suggested me switching my policy from Forever Health (Whole Life Critical Illness Product with Savings Element) to CancerProtect. It saved me money!"
"I heard about CancerProtect on TV advertisement and knew all medical examinations are waived during the campaign period. I bought a policy the next day after knowing it."
Experience Results
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