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Jerry Whetnall, StoneRiver
Jerry Whetnall, StoneRiver
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The Keys to Saving Crucial Minutes in Insurance Sales

Life insurers have been tasked with reducing sale-to-issue time for years — and now they're talking about minutes, not days.

Jerry Whetnall, Stoneriver
Jerry Whetnall, Stoneriver
In the not-too-distant past, both the carrier and the proposed insured understood that it took time, sometimes between 45 and 60 days to process an insurance application, especially for life or health insurance. But times, along with insurance buyer and agent expectations, have changed. The result was carriers racing to reduce underwriting turnaround time from 45 to 20 days, then from 20 to 5 days.

The drastic reduction in underwriting turnaround time was successfully accomplished partially through product design, but primarily through advanced technological capabilities such as electronic applications, ACORD Standards for evidence reporting, and automated underwriting systems that could readily assess the evidence to render a decision. With nearly 77% of all carriers currently employing these technologies, these time reducing capabilities are no longer carrier differentiators – they are the table stakes just to play in the game. No longer is 5 days considered quick turnaround. Today's insurance buyer and agents expect a decision at point of sale. So, the race continues.

To develop a successful strategy for underwriting in minutes versus days, carriers must understand the vital elements that impact the speed-to-issue paradigm. Three key factors compel the life insurance industry: consumer and agent demand for product innovation and instant gratification; the life products provided by carriers; and the advanced technology that carriers have available to them.

While sale to policy issue times have significantly improved, the prospective buyers for life products, and the agents who serve them, have become quite technology savvy when it comes to accessing information and having purchasing power at their fingertips. This technology culture's expectation of immediate response doesn't change when it comes to buying and selling insurance, requiring carriers to find a way to deliver to expectation.

[Helping life insurance agents demystify the product at Lincoln Financial]

Carriers have responded to the market expectation in a couple ways. First, via a new type of product which is often referred to as Simplified Issue. In reality, it is not so much a new product category as it is a new process – that is, simplified underwriting. For face amounts up to $500,000, and sometimes beyond, carriers are now often underwriting with data provided in the application and from three evidence sources; Medical Information Bureau (MIB), Motor Vehicle Reports (MVR) and prescription histories. When the right technology and process are in place, a typical request for information and response from these evidence providers can take under a minute.

The challenge for carriers is to tie all of the people, product and technology elements into a seamless, collaborative, single-touch experience for the proposed insured or their agent.

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esonderg
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esonderg,
User Rank: Apprentice
10/30/2013 | 8:29:38 PM
re: The Keys to Saving Crucial Minutes in Insurance Sales
At the end of the article it says "This ideal scenario is in production today." Which companies are offering this solution?
Byurcan
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Byurcan,
User Rank: Author
10/4/2013 | 2:17:43 PM
re: The Keys to Saving Crucial Minutes in Insurance Sales
Very true, seems like this day and age we could bypass the step of taking a medical exam, there has to be an easier way for insurers to access this information.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/4/2013 | 10:28:20 AM
re: The Keys to Saving Crucial Minutes in Insurance Sales
That's very true. We are hearing from IT leaders from many industries that almost all workers are expecting mobile capabilities -- especially younger workers. Mobile first is something that enterprises must do to remain competitive.
KBurger
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KBurger,
User Rank: Author
10/4/2013 | 2:18:15 AM
re: The Keys to Saving Crucial Minutes in Insurance Sales
In insurance, it's not just the customer (prospect or policyholder) that is turning mobile first -- it's the agents/producers/distributors, too. We have come a long way from MetLife's LapApp, rolled out in the early 90s, equipping agents with (VERY HEAVY) laptops and pushing them to take insurance applications on the computer (vs hand-written applications). Concept was right but the tech wasn't ready and agents resisted -- no buy-in. I was discussing this at Interop with our CIO Forum panelist Frank Wander of the IT Excellence Institute. Flash forward to 2013, now agents won't consider working with an insurer that doesn't mobile-enable them.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Apprentice
10/3/2013 | 12:34:38 PM
re: The Keys to Saving Crucial Minutes in Insurance Sales
More and more, the target customer is turning to their handheld device (phone or tablet) when they first look for a product. If a company can't provide what customers need through mobile types, they may not even get a chance to compete for their business. It's mobile first for almost any company that sells products to consumers (retail, financial services, travel, auto, and more).
KBurger
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KBurger,
User Rank: Author
10/3/2013 | 1:48:37 AM
re: The Keys to Saving Crucial Minutes in Insurance Sales
I agree with the author & comments. Consumerization of technology has transformed customers', partners' and employees' expectations with how they are going to interact with their financial services provider (or employer), and among those changed expectations is a demand for real-time transactions and interactions. This capability definitely is enabled by technology & industry standards, as Jerry points out, but also requires a changed focus & culture at the insurer, as Nate notes.
MariaT381
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MariaT381,
User Rank: Apprentice
10/2/2013 | 8:37:41 PM
re: The Keys to Saving Crucial Minutes in Insurance Sales
The type of tech discussed is definitely key to industry expansion into the mid-market. Part of the reason for this is that it allows the use of leveraged agents - such as bank and P&C CSRs and loan officers.
Nathan Golia
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Nathan Golia,
User Rank: Author
10/2/2013 | 7:36:34 PM
re: The Keys to Saving Crucial Minutes in Insurance Sales
Life insurance companies need to understand that the way people buy products of all kinds are changing. The only hope for the industry to acquire customers who are used to commerce in the digital age is to offer their products digitally. There are definitely even further data sources than the three listed here that are established or growing that could refine life insurance underwriting without requiring onerous medical exams.
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