Online Applications Freeing Up Agents Time To Prospect And Sell

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As if the job of selling an intangible product like life insurance were not difficult enough, the next task at hand–completing the application– can also be quite daunting.

A 20-page application is not uncommon in the life insurance business. Combine that with a requirement for multiple signatures on various pages, and all the ingredients for slowing down the process are present.

Lately, however, some carriers have taken steps using technology to simplify the entire process–making the lives of agents much easier.

Agents working with these carriers are finding that they now have more time to spend selling and prospecting–as opposed to completing tedious paperwork. The process involves coupling a simplified application with tele-underwriting. While this model may not sound new, transmitting the application via the Internet is.

Before Internet use became an efficient mode of communication, the fax machine was the primary tool agents used to transmit a simplified application to the carrier–thus starting the tele-underwriting process. Problems arose when a fax was misplaced or sat on somebodys desk too long, recalls William F. Zimmerman Jr., president of Life Pro Inc., Solana Beach, Calif.

Now, using Internet technology provided by Zurich Life, Schaumburg, Ill., “the tele-underwriting queue has that information in seconds,” says Zimmerman.

The end result for agents brokering business through Zimmermans agency is they have “literally no paperwork,” he says, and are able to spend more time on prospecting and selling–the areas where successful agents excel.

Zurich Life is seeing some positive results with this program, called Z-app, according to Michael Sladek, senior marketing director of field technology for Zurich. Last year, Sladek projected 10,000 Z-apps would be submitted in 2002. Zurich exceeded its goal by 25% and Sladek adds that 2003 looks to be even better, with a monthly average of 1,200 Z-apps for the first two months of this year.

Safeco Life and Investments, Redmond, Wash., is seeing a similar trend as its online application process gains popularity among producers. The program, titled Safeco Now, was only launched in July 2002, but currently accounts for 45% of submitted life applications, according to Jennifer Davies, vice president of individual life at Safeco.

Furthermore, Davies attributes the Safeco Now process as a contributing factor to last years fourth quarter uptick in applications submitted, with a 20% increase over fourth quarter 2001.

Through this process, agents are able to provide clients with a quote, complete the application and bind coverage with an online form.

“Compare that to sitting across and chatting with a prospect, filling out forms manually,” Davies says. “Its quite a different process.”

While both Safeco and Zurich currently only offer term life products through their online systems, Hartford Lifes online application process offers term, universal life and two variations of variable life, according to Rick Maholchic, director of marketing for national accounts, Hartford Life, Simsbury, Conn.

Since rolling out the program in 2000, Maholchic has seen a steady increase in the amount of business placed through the online system. In 2002, he saw a 56% increase in paid premium and a 66% increase in variable life sales over 2001 levels.

Furthermore, the online system has been a means of attracting brokers to do business with Hartford Life. “We had a 44% increase in the number of new brokers writing business through this process,” he says.

In addition to attracting new producers, Hartford is seeing more repeat business from their brokers. According to Maholchic, at the end of 1999, direct brokerage repeat sales were around 1%. “We finished 2002 with about 52% repeat brokerage. The repeat brokerage is telling us they like the process,” he says.

These simplified application processes have opened up several opportunities in distribution. At Hartford Life, their target distributors are wire house agents, banks and property-casualty agents, says Maholchic.

“This was designed for a broker who has never written life insurance before,” he explains.

The simplified application process gives bank distributors, wire house agents and p-c agents a nonthreatening, nonadministrative way to enter the life insurance marketplace, Maholchic says.

Jennifer Davies agrees. “Weve seen a big jump in p-c producers,” she adds. “Since this has made it so transactional, theyre real comfortable about leaping onto it.”

In fact, this type of process has become so transactional that some agents with whom Sladek has been working have developed an entire business plan around the electronic Z-app process. Sladek sees a big push in traditional General Agents branching into a new sales model.

Sladek explains that some agencies have created separate distribution centers where they use direct marketing to do over-the-phone or Internet-based sales.

“They can actually make the sale on the phone, and submit the app while theyre speaking with them,” adds Zimmerman.


Reproduced from National Underwriter Edition, March 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.