1. Stage 1: Identify the need for a new product and develop a new strategy
   1. Identifying the need
      1. Innovation
         1. Does not assure success
         2. Is limited by regulations
         3. Limited in insurance
      2. Responses to changes in regulation or tax law
         1. New products are often used to take advantage of tax benefits
         2. Changes in regulation e.g. pollution reduction
      3. New market or distribution channel
         1. Using an existing product as a benchmark
         2. Hiring a consultant
         3. Joint venture / hiring expertise from competitor
      4. Updating an existing product
         1. Assumptions are used at first, then products are changed based on the experiences
      5. Market research
         1. Identifies/confirms market need
         2. Confirms company has resources to meet the need
         3. Identify competitors and competing products
   2. Developing the strategy
      1. How does it fit the company's plan?
      2. Targeted markets
      3. Competitive advantages of the company
      4. Methods of distribution
         1. Retailers
         2. Directly to consumers
         3. By representatives
      5. Sales/profits expectations
      6. Risks and mitigation
         1. The investments that are available affect the product strategies
         2. Availability of reinsurance affects product design
      7. Do we have the resources?
         1. Capital requirements
         2. Company experience
2. Stage 4: Gather and monitor experience
3. Stage 2: Develop the product
   1. Project management
      1. Develop objectives and expectations
      2. Ongoing evaluation of financial implications
         1. If at any time the project becomes unviable STOP THE PROJECT
      3. Developing a timeline for each step
         1. splitting up the task into smaller tasks makes it more manageable
      4. Assigning responsibilities for each step
      5. Ongoing monitoring of progress with interparty communication
   2. Design features to control risks
      1. Analyse the risks
      2. Come up with design features to control risk
         1. deductibles?
         2. coinsurance?
         3. policy conditions?
         4. surrender penalties?
   3. Competition, market and pricing
      1. Assessing the competition
      2. Pricing the product
         1. manufacturing costs
         2. distribution costs
         3. profit margins
   4. Should we launch the product?
      1. Will it address a market need?
      2. Costs?
      3. How many will be sold?
      4. How much will people pay?
      5. Best distribution system?
      6. Does it meet profit objectives?
   5. Stakeholder expectations
      1. Provider
      2. Consumers
      3. Retailers
      4. Regulators
   6. Some product needs: reasonable service reasonable benefits considers interest of other stakeholders design not misrepresented
4. Stage 3: Manufacture and distribute the product
   1. Distributing the product to the clients
      1. Contract and sales must be communicated clearly
         1. Actuaries and lawyers getting involved
         2. Companies must have regards to Policyholders' Reasonable Expectations
      2. Marketing
         1. Agents?
         2. Brokers?
         3. Direct marketing?
   2. Risk selection
      1. mortality risk?
      2. severity/frequency risk for general insurance?
      3. credit risk?
   3. Administration
   4. Asset-liability management
   5. all of these risks involve checking for insurable interest and involve underwriting