Advisers’ Voice 2016: Underwriting and New Business Administration Innovation Ideas from Advisers

In this third article in the “Advisers’ Voice” series, Dr Rebecca Sheils, co-founder of the Beddoes Institute, takes a deep dive into innovation ideas for life companies in the area of underwriting as suggested by advisers in a recent Beddoes Institute study that concluded in February 2016. As with earlier pieces in this series, advisers are keen to see changes that will lower costs and drive efficiencies within their businesses while helping to improve the experience of their clients...

While the Beddoes Institute’s Adviser Experience Benchmarking Study evaluated life company service performance, this study asked advisers “What is the most important type of product or service innovation you would like to see from Life Insurance Companies to help you with your business?”

In the first article, the innovations suggested by advisers were grouped into five cohesive and actionable themes based on how often they were mentioned to produce a 2016 ‘Innovation Agenda’ for Life Insurance Companies.  Underwriting and new business administration innovation was the second most important theme, with 37% of advisers calling for innovation in this area.

So what changes do advisers want with regard to underwriting and new business administration?  The following chart shows the relative importance of the specific areas mentioned while the ‘Adviser Responses’ section below contains a random selection of unedited adviser comments and suggestions which illustrate the specifics of what advisers are calling for from life companies. Most of the suggestions relate to changes to systems and processes that will lower costs and drive efficiencies within advice businesses.

Percent of advisers mentioning different underwriting and new business administration innovation ideas*

* Based on advisers wanting underwriting and new business administration innovation from life companies

General improvements in technology and specific improvements to e-application software emerged as the two most common areas for improvement (mentioned by 20% and 16% of advisers that called for underwriting change). From the innovation ideas put forward by advisers (refer to Adviser Responses) it is clear that advisers want change in these areas to drive efficiencies in their businesses and enhance the experience of their clients.

This was followed by industry standardisation across underwriting applications – generic application forms, personal statements and questionnaires – mentioned by 14% of advisers.

Greater access to tele-underwriting is also important (10% mentions), especially in the context of best interests’ duty so that this is not an influencer at time of product and provider recommendation.

Following on from this, many advisers also want changes in the areas of quotation and pre-assessments (9% mentions). Specifically, they want better tools and processes to help determine the best product and provider for their clients, as they question the value of comparative software ratings companies and see this as a time-saver that would eliminate the problem of going through the application process with the wrong company.

A smaller number of advisers are calling for a faster insurance application process (7% mentions), mainly to minimise the risk of losing potential clients, more streamlined underwriting processes again to create business efficiencies (6% mentions), and greater accessibility to underwriters (5% mentions) including dedicated underwers, more face-to-face contact, and live underwriters online to provide immediate responses to queries.

Quality of new business administration and improved underwriting communication in relation to progress updates and assessment decisions were called for by 4% of advisers respectively.

The key message advisers are voicing to life companies is to improve existing underwriting services and explore new solutions that will help them reduce operational costs and run more efficient businesses while enhancing the client experience and minimising the risk of client loss. Operational efficiencies are particularly important given the potential financial impact that LIF may have on advice businesses.

Adviser Responses: A random selection of unedited adviser comments and suggestions which illustrate what advisers are calling for from life companies with regard to underwriting in different areas

Technology

  • “Gamify” the application process to make the process more enjoyable for clients to participate whilst educating them so as to manage expectations.
  • Better integration of technology to work in the field to be able to complete apps with clients via ipads, obtain electronic signatures and/or upload all relevant docs at online application time.
  • Integration with CRM software to avoid doubling up client data entry and policy details updates.
  • Integration with our business systems for seamless client experience to save us time and money and allow the life office to also save time and money, making us both more efficient to drive profits for each of us under the new framework.
  • If insurers and medical practices could come together and develop a database to allow the sharing of medical information that would greatly assist our business.  The quick receipt of Practice Medical Attendance Reports (PMARs) would speed up the application process and insurance for our clients would be implemented much quicker.
  • Invest in current technology for a more intuitive underwriting process for the application software. Have the ability to use software for quoting alterations to existing policies.
  • Maximise the use of technology in all aspects – no paper forms etc.
  • Pre-populate product wording, based on the quote, to enable insertion into an SOA.
  • Use of electronic Medicare records when completing underwriting.
  • Seamless applications that include a Statement of Advice that can be used on a laptop with a client electronic signature and will be directly underwritten within 24 hours.
  • There is a great opportunity to remove the duplication of work in the end to end process for insurance. With the pressure on margins as the cost to serve continues to rise, how great would it be if there was a common industry portal for lodging business for all insurers? One where data could be exported from our financial planning software and quoting software untouched by human hands. Heaven on a stick!

E-Application Software

  • An app that can be used to do an application on the spot that links back to the main quoting software.
  • I would like to see completely online applications, signature-less (or at least acceptance of electronic or copy of signature) due to time delays involved with getting original paperwork for certain things.
  • Provide easy ability for application, for example an online client portal that clients can be set up a link to that they can enter their details in once that can then be used across all insurers (like an electronic version of the generic personal statement).
  • An app that clients can use with an ID code that they can go into and complete the underwriting elements of their application at a time that suits them.
  • Full internet application including underwriting.
  • Faster online application processes or improved tele-underwriting.

Industry Standardisation

  • Online applications that are all the same.
  • A standardised application form that is applicable to all insurers to increase ease of applying with different insurers if unfavourable terms are provided.
  • Common personal statements across the industry.
  • A generic questionnaire for applications accepted across the market place.
  • I would like a pooled underwriting service that makes an assessment on my clients risk of which insurers would then bid for the policy.
  • I would like to see one generic application form that can be used to send to more than one insurance company when you have a case that is going to not be processed at standard rates.
  • It would be great if we can have one standardized application for all insurers.
  • Standardised underwriting and applications across the industry. One medical questionnaire that is able to be used for all companies.

Tele-Underwriting

  • A comprehensive tele interview service for all products, for both new and existing business. My experience with the tele interview process thus far is that both adviser and client are very happy with both the service and the outcome. More needs to be done in this space to improve how this service is offered and delivered.
  • Continued development of tele-underwriting services.
  • I would like the underwriting process to remain quick & efficient for those who offer tele-underwriting, and for those who don’t offer it to offer it.
  • Telephone underwriting at application throughout the industry so it is not an influencer at time of recommendation.

Quotation and Pre-Assessment

  • Quoting system and compatible with Xplan.
  • A standardised set of figures to compare life insurance companies based on % of applications accepted and % of claims paid.  This will allow me to use claims statistics to decide on price and value for money rather than a complex list of features that no client in their right mind would actually decide to read over and compare.
  • An adviser friendly risk cover calculation tool.
  • Opportunity to have an online limited health questionnaire pre-assessment tool to send to life offices rather than manual options. This alleviates going through the app process with the wrong life company, wasting time.
  • A competitive quotation system where we can compare policies with policies, including bells and whistles, without having to resort to other comparative software ratings companies.
  • Pre-populate product wording, based on the quote, to enable insertion into an SOA.
  • Have an industry standard so it’s easy to compare the details (features and benefits) of each insurer’s products.

Fast Assessments

  • Speedy process, a sense of Urgency when needed.
  • I would like to see insurance companies working more closely with our GP’s within the community by providing a greater incentive for them to complete medical reports and minimising the length of time it takes to complete a new business case.
  • Speed up the application process and insurance for our clients and implement much quicker.
  • Quicker application process with less tracking required from our office.

Simple, Easy And Efficient Processes

  • Ease of application process.
  • Making the insurance underwriting and implementation process as streamlined as possible.
  • Simplify the process for new & existing clients to obtain & alter cover.
  • Somehow we need to streamline the underwriting process.

Accessibility of Underwriters

  • Dedicated case managers for each application.
  • Dedicated underwriting & administration services is the most important offering we look for in a life insurance company.
  • I would like to see an underwriter come to my office and spend dedicated time going through my clients and applications.
  • Online, live underwriters so that we can message and get a live answer almost immediately.
  • We bring mortgage brokers, estate planning lawyers and accountants into our office to demonstrate and implement strategy. How great would it be to have an underwriter in the office or on the web to finalise an application.

Quality of New Business Administration

  • Better new business & underwriting resources.
  • Faster processes, so much time spent chasing up additional info from clients. Will be difficult to run profitable business next year.
  • Quicker application process with less tracking required from our office.

Underwriting Communication

  • It would be very helpful if insurance provided more information when they refuse an application for insurance on medical grounds where there is no diagnosis of disease.  For example someone may have a high count in their blood tests which their doctor is satisfied with, or comes within the range of normal results, but the insurer may reject the application.  This doesn’t allow the client to know what they have to do and what it is the insurer is concerned about.
  • There needs to be more transparency of process of new business progress and outstanding requirements & being copied in on any missed premiums and happy for insurers to contact directly relating to missed premiums.

Dr Rebecca Sheils is Director and co-founder of the Beddoes Institute, which specialises in delivering research and consulting services to the financial services sector.

The Life Insurance Industry Performance Barometer delivers insights into the needs and expectations that advisers and customers (policyholders and claimants) want from life insurance companies and maps how companies perform in terms of meeting these needs.

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