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Tech At The Front End: The Trend In Many Products

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Tech At The Front End: The Trend In Many Products


Life and health insurers keep on debuting tech, or tech-enhanced, features with their products and services. These features include cursive e-signatures, e-underwriting, e-forms and more.

Enhancing products with tech is nothing new, of course. Its been going on for years, says Shane A. Chalke, president and CEO of Annuity Net/VARDS, Herndon, Va., a firm that offers electronic annuity order entry and other automated services to insurers. But the 2003 approach is very different, he says.

“In the past, the companies used to invest in product technologies that drove back-office efficiencies,” Chalke explains. “Today, that is very rare–because the payback on those systems doesnt show up for three to four years. In todays tough economic environment, thats too long.

“Now, the trend is to spend money on tech that grows the market advantage or differentiation for products,” he says.

Specifically, providers are debuting tech features that make it easier for producers and customers to do business, he says, by speeding up the sale, enhancing product knowledge, and/or improving data accuracy. And, the advisor or consumer does not have to be a tech whiz to use the features.

Whats more, says Chalke, “their payback period is six months or less.”

This article looks at some recent examples.

E-signatures (cursive). One example is Guarantee Trust Life Insurance Companys decision to allow attachment of “real” cursive signatures to term life applications. The agent can walk the customer through the entire application process over the phone, including the signature, explains Monty Edson, senior vice president-marketing of the Glenview, Ill., insurer.

Consumers “sign” their name by using the mouse on their own computer. There is no special program or hardware that they need to have.

The technology is available with LivingLife Plus, a 10-year, simplified issue term life policy with a critical illness acceleration rider included. It is being used by Virtual Insurance Technologies, Inc., a Gainesville, Fla., firm that developed the technology and that builds Web sites for agents. It serves as a general agency on this product.

“Were still experimenting with it,” says Edson. “And we are looking at ways to have our other agents use the technology, too.”

Why do it? The requirement that insurers collect the original–”wet”–cursive signature of an applicant has long impeded the growth of online-assisted sales of life insurance, says Edson. But GTL believes the technology will give it a “clear and important competitive advantage” in the online life sales market.

Now, he says, “all paper is eliminated, along with the costs and inefficiencies associated with paper transactions.”

But the customer is still talking with a licensed agent.

Issues GTL had to resolve before implementing the technology were: What is an e-signature? And, will a signature captured in this way–a mouse-written cursive signature attached to an online application–stand up to any challenge of legitimacy?

GTL researched these issues and decided the approach is workable, Edson says, but since it is so new, “weve restricted the face amount to nominal levels for now.”

E-underwriting. A recent example is at Balboa Insurance Group Inc., an Irvine, Calif., subsidiary of Countrywide Financial Corporation.

This firm has launched a Web-based underwriting program for 10-year term life policies that it says “eliminates the need for fluid testing during the underwriting process.” Target distribution is agents in financial institutions.

The sales rep can use the Web system to quote premiums, submit applications, process initial premium payments and deliver an active policy to the customer, says the insurer.

The system “electronic issues” the policies, based on answers to health questions. But, the agent can still access a “live underwriter,” if necessary, Balboa says. The live underwriter can review the Web-submitted application and provide a response “within minutes,” Balboa says.

In addition, agents can see the status of their customer applications at any time, says the insurer. When the policy is available for issue, the system notifies the agent by e-mail and online in the Web system.

The benefit? The system provides the efficiency, process integration and speed it needs to differentiate itself, says the company.

The system designer is MFXchange Holdings Inc., an e-commerce subsidiary of Fairfax Financial Holdings Ltd. Other program partners are HUB International and the Financial Institutions Practice of Burnham Insurance Group, a HUB company. The policy involved is PlatformLife, a 10-year term policy available up to $250,000 in face amount, with a maximum eligibility age of 64.

E-form distribution. Safeco Life Insurance Company, Seattle, has started using a forms engine that allows agents and advisors to download a single state and product-specific file that contains all forms they need to submit life and annuity business to the insurer.

This makes it easier and quicker for agents to access forms they need, says Laura Johnson, assistant vice president. Agents can e-mail or print the forms, too. Another advantage, she says, is the system allows Safeco to push product updates and form changes directly onto a key distributors Web site. The forms engine is from iPipeline, Exton, Pa.

E-web resource. Anthem Life Insurance Company, Indianapolis, Ind., says it streamlined its Web site to offer “online forms, guides, content and self-service tools.” Who is the redesign targeting? Brokers, producers, employers and other visitors are its targets. The goal: To provide convenient, easy-to-use online services and detailed content that makes it “easier than ever to do business with Anthem,” says John Murphy, president-Anthem Specialty Business.

E-appointments. Zurich Life, Schaumburg, Ill., has been tinkering with enhancing its online paperless agent appointment status system. “Our general agents told us that they want to be able to electronically upload appointment status through their agent management systems, so we gave them that capability,” says Ken Olson, president of life brokerage at the company. Now, he says, an agent completes the appointment app through “Z-appoint,” and the system notifies the GA when the appointment is complete. Updates are done daily.

E-order entry. Nearly 50% of all financial institutions now use electronic annuity order entry, points out Chalke, of AnnuityNet/VARDS. This is another sign of the trend to front-end tech, he says. Furthermore, 28 insurers and 49 broker-dealer and bank annuity distributors now use his firms annuity automation platforms, he adds.

The way the service works is that the producer types in the order at the institutions Web site. The screen that appears uses a “wizard,” with questions based on product, state, money source and similar data. “This entry process cuts way down on mistakes and other hassles related to using paper forms,” Chalke says, and “there is no paper trail lag, such as the agent waiting for two days only to find that data on a paper form is missing or inaccurate, which means going back to the client.”

The time savings are important, he adds, but “not as important as the fact they make the business process as easy as possible for producers.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 15, 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.