IC21: Simple Products

1. What is a simple product?

A simple insurance product has the following features:

* can be explained in a FAQ that is understood by the layman
* can over several risks in a package
* option of a few packages
* charges a combined premium rate

The customer can decide on the package that serves his needs and pays a combined premium. The decision making is simplifed.

2. What types of simple products are available?

Here are some of the simple products

* motor insurance
* home insurance
* life insurance
* medical insurance
* travel insurance
* savings plan

They cover life, general and health insurance.

3. Can an insurance policy cover several people or risk?

Usually, a separate policy is issued to each person. If the customer insures several members of the family, each person is given a separate policy.

This simplies the processing of the policy and the customer service. The record structure is kept simple.

4. Can the system handle many risks in one policy, in certain situations, where it is more efficient to do so?

The system can allow a policy to covers several risks. The details of the risks are stored in a
schedule, which is recorded as a text box. A combined premium is charged.

Where the business has a small volume, the premium rate is calculated manually and the details are typed into the text box. Many combined risks can be handled in this manner.

Where the business has a big volume, a quotation engine can be written to handle the computation of the premium and the generation of the schedule. This will reduce the work.

By storing the detailed information in a text box (ie the schedule), the system can handle many types of more combined risks under a simple processing structure.

5. How are the results analysed?

We will analyse the premium and claims under each product code or package. We will not analyse down to the specific risks that are being insured.

6. Can the premium by paid in installments?

Usually, the premuim is payable annually. However, the system allows the premium to be paid in other intervals, eg monthly, or to cover more than one year (eg in the case of a construction contract or a multi-year policy).

7. Do the premium have to be paid before the policy is issued?

The system allows the policy to be issued earlier and the premium to be collected later. This option also apply on the renewal of the policy. The actual decision can be made at the point of sale, and is subject to the operating condition at that time.