A Web of Support
Tools for Life
By contrast, life insurance agents, as well as health insurance distributors, have had a somewhat different focus. A much larger percentage of life insurance agents continue to be captive, employed by a single carrier. So the channel investments in this segment of the business tend to be driven more toward automating data entry and policy documentation, which would enable agents to maximize efficiencies in what remains a relatively paper-intensive environment. Because of a variety of offerings, a multitude of disparate forms still are required to sell life insurance.
And there still is a long way to go in improving this situation, according to Celent's Weber. "On the life side, the low use of electronic applications is just shocking," he observes. "That leaves so many inefficiencies due to incomplete or inaccurate work."
Today, according to McKinsey's Brown, much of the channel investment in life insurance has centered around initiatives intended to enable agents to quickly collect the right forms, many with fields already filled out (for current clients, who may be renewing, upgrading or changing their coverage; and for prospective clients who may have filled out an online needs-analysis form, for instance).
By providing forms that can be completed electronically, carriers facilitate immediate notification if there is incomplete or missing information. Agents (and their clients) don't have to wait for a paper form to be received by the back office before an error is discovered, which can result in a delay of several days before the necessary document is returned for proper completion, and resubmitted for processing and policy issuance. By automating back-end processes to support agents on the front end, for example, life insurance can be issued in 10 days or less rather than in the still-typical 30 days to 90 days, ACORD's Garth notes.
Another way an increasing number of carriers are helping distributors streamline the submission process is by enabling agents to accept electronic signatures on their laptops or other mobile devices, instead of only allowing "wet" signatures on paper documents, relates McKinsey's Brown. This facilitates the submission of applications electronically in real time, he notes.
The complexity of life insurance products is the main reason why the consumer-direct distribution model (whether online or via another channel, such as call center) has yet to make much of a penetration in the life insurance sales channel, according to Paul Johnston, an independent analyst who recently worked with Boston-based business and information technology services firm Keane. "In order to sell better online, the tools would need to go further," Johnston says. "They would have to help a person determine where he is in life and have the capability to provide options based on that."
To overcome or at least minimize these limitations and, at the same time, provide agents with more active leads, many life insurers are using their Web sites to enable potential customers to provide cursory personal data and receive basic product information (including rate quotes) online, while ensuring that agents contact these prospects. Part of this follow-up includes advanced tools that help agents explain complex products to customers.
For example, Boston-based John Hancock, a division of Manulife Financial (Toronto; $310 billion in assets under management), recently deployed an updated version of a concept illustration system that enables financial advisers to illustrate complex cases and more easily create sales aids such as product ledgers, flowcharts and graphs. The tool includes 12 new modules on advanced planning concepts, from wealth transfer planning with deferred annuities to premium financing and private financing, with additional modules planned for the coming months. Agents also can use the system to create customized PowerPoint presentations for a client's specific situation.
Maximizing the Future
Taking support systems to the next level, according to Celent's Weber, will require insurers to do a better job of collecting and analyzing the data captured from all their distribution channels. "So far, they've been going after the low-hanging fruit in online systems," he says. "They're early on in optimizing use of the data—it's not too sophisticated yet."
U.S.-based insurers should look at their European counterparts for ideas about how to enhance their sales capabilities, recommends Jerome Zingg, who heads the distribution excellence practice for Accenture's (Chicago) insurance group. The bank distribution channel, for example, still is largely underutilized in the United States, Zingg contends. European financial institutions have done a better job of selling life insurance and related products as part of a wealth management solution than have their U.S.-based rivals, he says, adding that this strategy is starting to take hold in Canada.
Additionally, insurers could adapt a retail bank example by offering agents reward points for generating certain levels of business, Zingg suggests. Agents then could cash in the points for business-related rewards such as marketing collateral, an agent Web site operated by the carrier on the agent's behalf or other business-building benefits.
Zingg also recommends that insurers, particularly national carriers, look beyond the financial services arena to the retail industry. National retail chains, he points out, price products differently in different markets, and offer tailored looks and features from location to location—a concept that could be adapted by insurers operating in multiple markets.
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