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1©2019 Aetna Inc.
Proprietary
Innovative Product Design
August 2, 2019
How Actuaries Influence The Process
2©2019 Aetna Inc.
Proprietary
Agenda
Product Lifecycle
The Role of the Actuary
Innovation in Health Insurance
3©2019 Aetna Inc.
Proprietary
Product Lifecycle – The Actuary’s View
Price / Size
ImplementMaintain Relativities
4©2019 Aetna Inc.
Proprietary
5©2019 Aetna Inc.
Proprietary
Product Lifecycle – What Really Happens
Ideation
Generate and pursue product concepts
1 2 3 4 7
Nitty Gritty
Nail down details - from target customer to IT requirements
Reality Check
Establish business case, product “story”, go-to-market plan, and
operational readiness
Go / No-Go
Confirm readiness across operations, sales & marketing,
and leadership approval
Calibration
Evaluate within broader product portfolio – retain, modify, sunset
A B
Product Launch
A) Launch date
B) Effective date
5
Real Life Review
Review product performance against target metrics, define
needed modifications
6
Maintenance
Monitor and adjust for compliance, market position,
and customer needs
6©2019 Aetna Inc.
Proprietary
6
The Actuary’s Role
Technical
• Build, maintain and utilize actuarial models that support product design and maintenance
• Calculate benefit relativities for entire portfolios
• Price new concepts
• Determine applicability across funding types
Business
• Consider impact of key features
• Partner with business partners to define and assess risks
• Project financial impact
• Weigh in on business case
Go Beyond
It is often the work we do outside of our
models that delivers the greatest value to the
business
7©2019 Aetna Inc.
Proprietary
An Example – Ultra Lean Plans
1 2 3 5Evaluate existing plans against external market
and plan sponsor selections
Size the opportunity and the risks
Modify models to accommodate and measure changes
Monitor results against targets and overall market response
Innovation
9©2019 Aetna Inc.
Proprietary
©2019 Aetna Inc.
Innovation is more than the big idea.
It is the execution of a new, creative idea into something of value.
What Is Innovation?
10©2019 Aetna Inc.
Proprietary
We Know It When We See It
11©2019 Aetna Inc.
Proprietary
11
Fostering Innovation
• Ask the right questions- What if?- How could we?- What would it take?
• Focus on trade-offs, not cost- What’s it worth to you?- Where can I find a pay-for?
• Collaborate with business partners
• Trust the process
Creativity
is just as important in the execution of a
great idea as it is in the generation
of the idea
12©2019 Aetna Inc.
Proprietary
©2019 Aetna Inc.
Practicing Innovation
• Closed or narrow provider networks
• Diminishing deductible
• Accident forgiveness
• No deductible health plan
• Insurance for gig workers
13©2019 Aetna Inc.
Proprietary
Actuaries belong at the heart of product innovation. Invite yourself to the party!
What Does It Take?
• An open, curious mind
• Freedom from models
• Nimble data analytic skills (or friends with mad skills)
• Partnership across the organization
• Ability to see things through multiple lenses
• Willingness to challenge norms
• Market perspective
• Peer review
Questions?