The product management approach pushes business management responsibility for individual product lines down lower in the organization, while maintaining senior management control and the integrity of individual functions. Product management seems to be relatively simple in concept. However, it is not easy to implement the approach with full effectiveness. Product management may not be right for every company, but we believe it is a concept that should be looked at carefully by mid-sized and large companies, given the operating challenges faced by the industry today. Life Insurance Companies Life insurance executives are considering product management because the business has become much more complex in recent years.
Companies face new nonlife competitors, and product lines are longer.
The products themselves are more complicated, and today's sophisticated consumer no longer takes the life insurance product for granted. Senior management is concerned that middle management is not taking initiative to keep established products competitive and growing. Senior management has major concern about product line profitability. Some companies believe that under the functional approach, responsibility for results on both new products and established products is not clearly fixed, but rather tends to be diffused throughout the whole organization. There is lack of accountability for product development and other critical management responsibilities on individual product lines.