You’ve seen the job ads for insurance “product managers.” Do you think you want to be one?
“It’s one of the best jobs in the industry,” says Eric Neely, who has worked as a product manager for four carriers, most recently SAFECO. “You’re essentially a general manager for your product line.”
Compensation can be excellent, as “there is intense competition among companies for product managers,” says Rick Dorman, principal of Dorman Consulting Associates, Beachwood, Ohio.
Dorman was a product manager for Progressive Insurance and has gone on to a career in consulting and seminars in product management and ratemaking.
Before you jump at a product management opportunity, however, understand that it is one of the most demanding roles in P/C insurance, requiring individuals with hard knowledge of insurance operations and “soft” skills needed to achieve goals without having formal authority.
Pam Nykaza, now an AAIS inland marine product development specialist, needed to demonstrate competency in pricing, policy form analysis, risk management, and a range of other analytical and management skills before being selected as a product manager at Allstate where she was previously employed.
Her role, she says, was to improve the operating results of a landlord’s package policy.
To accomplish that goal, Nykaza had to be personally engaged in updating policy language, expanding program eligibility, creating a more sophisticated rating plan to reflect the increased eligibility, and increasing awareness of the program to Allstate’s agency force.
“In its purest form, product management is a role that enables one person to focus all of his or her energy on the total business performance of a given state or product lines,” says Michael Cronin, a product management consultant with Cronin Consulting Services, Kernersville, N.C.
Contrasting the product management approach with a more traditional approach, Cronin says that, “a sales vice president will often be evaluated and compensated for top-line growth, while an underwriting vice president’s responsibilities may emphasize underwriting profitability.
“But a product manager’s goal is to find the optimum balance between top-line growth and bottom line profitability.”
Dorman concurs, saying “The easiest way to understand product management is to think of the way business used to be done exclusively.”
“There were two key functions, underwriting and marketing. Everything in a traditional organization funneled through those functions. The flaw in this approach is that those functions are in conflict much of the time.”
As Dorman sees it, good underwriting at the expense of marketing, leads to unnecessary limitations and restrictions on business. On the other hand, aggressive marketing with relaxed underwriting erodes the quality of a book of business.
Cronin identifies six core competencies of an effective product manager:
- The ability to think strategically and act tactically;
- Project management skills;
- Data analysis skills;
- Working knowledge of insurance functions;
- Effective interpersonal skills; and
- A strong sense of accountability.
Of all those, an ability to work to with numbers is paramount.
“In many companies, product management is a more analytical role,” Cronin says, “emphasizing the quantitative aspects of pricing and ratemaking, and balancing price-competitiveness with profitability.”
“If you’re not good or comfortable with numbers, you’re not going to be a good product manager,” says Dorman. “You don’t have to be a math major, you don’t have to know calculus, but you need to be able to pound out Excel spreadsheets.
“If you don’t like crunching numbers, it’s not the job for you.”
Also, if you don’t like diplomacy, product management is not the job for you.
“You need good interpersonal skills, because you have a whole lot of responsibility without a lot of authority,” says Dorman.
Indeed, responsibility without authority is consistently identified as one of the defining characteristics of product management. That’s because product managers must work across the functional lines that still define most insurance organizations--marketing, underwriting, and claims--challenging traditional lines of authority.
“The product manager is a change agent,” says Paul Stulgaitis, president of Blue Rock Consulting, Portland, Me. “He or she will bump up against vertical team interests where someone is always responsible for marketing, underwriting, claims, and so forth.
“Product managers are potentially seen as a threat.”
Nykaza at AAIS recalls the “dotted line accountability” in her days as product manager for Allstate.
Put simply, she was individually responsible for actuarial determinations and underwriting results, but she only shared access to and authority over the actuarial and underwriting specialists needed to do the job.
As difficult as it is to be an effective product manager in a large company, it is even more daunting to be one in a small carrier.
“Product management is more challenging for smaller companies because they have all the same requirements with fewer resources,” says Neely at SAFECO.
Effective use of the resources of an advisory organization could make product management easier and more successful for small companies, says Tony Leist, AAIS assistant vice president of commercial lines. Leist has extensive experience in product management with American Modern Insurance Group and Midwestern Indemnity.
As Leist sees it, “Product management is the effective management of all product planning and development phases, from product idea through product monitoring.
“Many insurance companies do not have adequate resources or expertise to do this,” he adds. “Some smaller carriers may have a product manager, but that individual may not have the time to get new or revised products out on the market in a timely fashion.
“AAIS could assist them in competitor research, customized products, compliance maintenance, and filings with insurance departments.”
With the right help, maybe you’ll have what it takes to be a successful product manager.
In demand; not always welcome 
