Insurance agents, their clients, and yes, insurers too, have long wrestled with the challenges of an underwriting and issue process that is slow and aggravating, if not worse. All too often, dissatisfied clients, and dissatisfied producers, are the result.
Increasingly, the demand today is for financial products in distribution channels whose very paradigm is a speedy sales and delivery process. To work, such products have to be easy to understand. They must also be salable in the same manner as are most of the other vehicles the account reps have been selling.
This can be a challenge. The non-term life insurance vehicle is anything but simple to understand, given the abundance of charges–especially the cost of insurance charge. And insurance, even before the prospect says, “Lets go ahead,” is anything but salable in the same manner as a typical investment offering.
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Therefore, if reps are initially willing to go forward with the insurance sale, the lengthy issue and underwriting process provides rationale to decide that other sales are much worthier of their time.
With due respect to Bob Dylan, come gather around people, for the times they are a changing. Theres an extraordinary amount of work taking place in building simple products with a streamlined underwriting process.
This work promises to finally and dramatically transform the sale of life insurance, enabling insurers to increase penetration of financially oriented distribution channels. Following are areas where changes are occurring:
Before looking at them, keep in mind that the goal is to take no more than a few days, or perhaps a few hours or less, to complete the underwriting process. A dramatic reduction in the process time is the objective.
Streamlined applications. Apps now typically have a limited number of questions, sometimes just four or five.
A major objective in the financial channels is to minimize the amount of non-sales work performed by the rep. One way to do so is to limit as much as possible the reps involvement in the app process.
Streamlined may mean the same as simplified underwriting to some people. The reality is that the process, as defined here, leads to meaningfully better data than is typically available in more conventional simplified issue offerings. That is critically important for product competitiveness and persistency.
Rapid hands-off to experienced tele-underwriters. To get the account rep to focus on sales, and to achieve increased speed, this hand-off occurs as soon as possible after the client signs the application.