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Emma Thomson: Protection market is in need of innovation

E-commerce solutions need to help manage existing as well as new business. To date, this has been neglected.

Last year naturally saw little innovation due to providers focusing on regulatory changes. I’m hoping this year will prove to be much more exciting, and in particular, I hope to be impressed with some improvements in technology as well as product development.

I have helped many providers develop online propositions over the last decade, and while there have undeniably been improvements, restrictive budgets and cautious vision has meant there have only been two initiatives that have really impressed me; Friends Provident when they launched E-Select; and then when Ageas came to market, having taken inspiration from E-Select and improved upon it. Ageas’ launch was back in 2009, and I am eagerly waiting to be bowled over with some serious innovation again.

A sophisticated e-commerce proposition might not win business from IFAs in the same way that products and pricing will, but it should not be neglected. Margins are tight and IFAs will be attracted by systems that keep costs down. Providers of course will also benefit from cost savings which could be invested in other improvements.

I believe there are three key aspects to an online proposition; Quote & Apply, Pipeline Management and Existing Business. Most offer the first with varying degrees of success, a few offer the second and the third has been largely ignored.

Making it easy for intermediaries to submit business is vital and sophisticated underwriting systems that enable a large proportion of customers to be accepted immediately is what most will want. But not all. The key advice I give every provider is that systems should reflect that there are many different ways intermediaries do business, so must offer a variety of options to ensure firms are not alienated.

Currently, systems are primarily designed for intermediaries to key in the applications, but why not give intermediaries the option to get their customers to do it, by giving them a client-specific link to access the underwriting questions? It saves time, will help customers who might be reluctant to share health issues with their adviser and it reduces the risk of intermediaries accidentally mis-keying details.

Integrated pipeline management systems, which link in to the application where the intermediary can find all information in one place, where they can update the application during the underwriting process, and which send proactive messages when there has been a development is much better than the current, largely ineffective tracking systems, and Ageas stands out in this respect.

It’s the existing business side that need some real development. Let’s have systems that help intermediaries manage their existing book, showing policy details and claims, which send out notifications about missed premiums, and changes to contact details. It can also be used by intermediaries to update customer details for the provider’s benefit too. Systems that focus on existing customers will help intermediaries improve retention rates.

E-Commerce propositions need to move away from just focusing on new business and instead should help intermediaries manage their client’s cover from quote through to the policy’s end. Which providers are up for the challenge?

Emma Thomson is life office relationship director at Lifesearch

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Duncan Deaves 8th May 2013 at 10:33 am

    Hit the nail firmly on the head – especially looking after existing business. Ok a bit like online submission – its our time and money being spent doing it as it reduces the insurers costs – but worth it for the time it saves putting right mistakes etc on paper applications. Most insurers have decent telephone support for existing business but you would think they were guarding access to the White House with all the security checks (even if they call us:-). Online – you know it makes sense!!

  2. I’m surprised you have a problem Emma – just use your Nanny McPhee stick!
    As for online, frankly I find this a complete waste of time. What about trusts? Do you sit there with the client tapping out? If not then do you send them a form to complete? If so why not just send the application? Do people still complete forms in front of a client? What a waste of time. We send the application by post tagged and marked where input is required. We check it on return and then package it all up in one piece and forward it to the life office. No bits and pieces. Then at least when you photocopy it you have a robust audit with no questions or argument about who answered what. Also they can sign the DDM. But what if they prefer to pay annually? Not many have this facility on line. Same applies for Life of Another. Indeed it if it isn’t simple vanilla flavoured the online system falls down. As for larger sums assured, how often have you seen the message – not on line for this?
    For me on line is for the convenience of the life office – not the intermediary.

  3. Harry,
    I think you’re experience of the online systems is somewhat outdated. Most providers allow life of another applications online and I’ve yet to come across an issue with a high sum assured online (~£5m). Which providers need signed DDM? None to my knowledge. Yes, some still require the signed declarations but they will send copies to the client direct. The client will also receive a copy of the application summary through the post to check for accuracy, a fairly robust audit trail.

    How often do clients miss something of significance, or how often are details of disclosures not in-depth enough resulting in the need for supplementary questionnaires or targetted reports, quite often I’d imagine as clients are unlikely to know what an insurer sees as being relevant.

    I do agree with Emma in that some providers systems are extremely antiquated and are in need of complete overhaul. The Ageas and L&G systems are top notch but unfortunately, it’s difficult to recommend solely those 2 providers on the basis that they will not always be most suitable for the client and ultimately it’s my job to recommend the best option for the client irrespective of whether it’s a little less convenient for me.

    In regards to client management, I can only dream of the day when all provider systems will allow me to make changes to a clients details without having to phone up the provider and go through numerous security checks.

  4. Great article by Emma and I agree with just about every point she make
    which is not surprising as these are all isswus we are currently addressing
    via Protection Fourm (where Emma makes some very valuable contributions.
    F&TRC are currently endgages in a detailed research project to identify how
    a divers range of advisers including not just protection specialist but also
    Mortgage advisers, Wealth Management specialists, Holistic Financial
    Planners, Business Protection specialists and Aggrgaters. As part of this we
    are also looking at how needs vary between directly authorised firms, those
    who use support groups and Network members. More information can be found at http://www.ftrc.co/benchmarking/protection-new-business-processes/

    Advisers or providers wishing to participate in this process please drop me
    a note directly at ian.mckenna@ftrc.co.uk

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