Question

Which of the following statements regarding insurance product design is FALSE?

a.

For insurance products, product design is an important factor to be considered.

b.

Product design is required to fill the gap or inadequacy in the existing product range.

c.

There are various factors affecting product design, most important being profitability and its sensitivity, marketability and competitiveness, level of risk, administration system, consistency with other products and regulation.

d.

Products should be capable of being sold in the market profitably.

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).Product design is required to fill the gap or inadequacy in the existing product range. Explanation:Product design is not solely aimed at filling gaps or inadequacies in existing product ranges, although it may be a consideration.

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Q. Which of the following statements regarding insurance product design is FALSE?
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