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. Although product management originally was developed for manufacturing businesses, the same principles can be applied effectively in many life companies. It is simply an organizational concept which enables a company to concentrate marketing and business management efforts on a given product or product category. The need for it generally arises when a company has a number of products to promote and senior management finds it difficult to devote sufficient attention to each one.