The life and health insurance industry is aiming to break with a 140-year tradition by establishing a digital policy application process.
The Canadian Life Insurance EDI Standards Association (known as CLIEDIS) is leading a campaign to bring the application process into the 21st century. The goal of the project is to transform the current 36-day application process into one that will take no more than a couple of days.
Participants in all areas of the insurance industry agree that the move is long overdue, and the industry appears to have put its competitive secrecy aside in order to give consumers a better experience, says Scott Sinclair, chief operating officer with Toronto-based AEGON Canada Inc.
“From the point of sale with an advisor and consumer, all the way through to the approval by the carrier,” he says, “this [new process] will have benefits in terms of data capture, accuracy and administrative efficiency. It will have a tremendous impact.”
Dennis Craig, vice president of life and health underwriting at Toronto-based RBC Insurance Inc. , agrees that people in every corner of the industry will see the benefits of a move to electronic processing.
At a private meeting held in Toronto last month, CLIEDIS eli-ci-ted a unanimous commitment to pursue the new process from 130 stakeholders from across Canada, representing every phase of the life or health insurance application process, including manufacturers, managing general agencies and advisors. CLIEDIS has assembled a so-called “bridge group,” comprising manufacturers, advi-sors and distributors, to help put the proposal into practice.
Although the initial costs will be significant, the savings to the industry will be massive — so high that no one on the CLIEDIS committee was able to provide even a ballpark figure.
Financial advisors will see a significant increase in productivity, says Byren Innes, senior vice president and principal of NewLink Group Inc., a Toronto-based consultancy to the insurance industry.
Advisors would save time when multiple data-entry points are replaced by one or two. Ultimately, that time could be better spent servicing clients and marketing and making sales, says Innes, who estimates the change will reduce administration costs by 20%-30%.
As the securities and mutual fund industries have demonstrated, digitization of processes can also improve compliance. This move will result in “better reporting and data management,” says Tim Fitzpatrick, president of VirtGroup Inc., a managing general agency in Calgary.
Privacy is also a concern for advisors. Respondents to a recent poll by CLIEDIS about digitization expressed concern about the safety of clients’ information. But, Sinclair argues, data stored digitally on a couple of secure servers is considerably safer than information held in paper form, with copies stored in multiple locations and, in many cases, transported across the country several times.
Insurance carriers have tried to make a similar move to digital in the past, Craig says, but without success. He is confident this current effort will succeed: “The difference is, this time, we’re committed to making this an industry initiative.” IE
Insurance to go digital
Move will shave weeks off application process
- By: Gavin Adamson
- February 8, 2010 February 2, 2019
- 10:23