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Forming attachments

IFA service providers have mushroomed to seven from just one (The

Exchange) at the last count, including Assuresoft, Synaptic, Misys and a

number of others created by national and network IFAs such as Bankhall and

Willis National.

These service providers have acted on IFA wishes to provide an electronic

comp arative quotation service and other information-based services to

their financial adviser base.

Industry standards have been created to ensure that any IFA can

communicate electronically with any insurer to get a policy quotation for a

customer. This obviously makes it easier to form attachments.

Some of these infomediaries have also developed ambitions to offer IFAs

the ability to process new business proposals online. If done correctly,

electronic processing could cut costs significantly for product providers

and IFAs alike.

The potential for cost and resource savings has become more important as

the industry prepares to offer lower-margin products such as stakeholder

pensions. For product providers, it is going to be impossible to offer such

products profitably without dras-tically reducing the costs involved in

processing new business.

The only way to achieve that is to automate a considerable proportion of

new business processing and adopt e-commerce. But before this can happen, a

common data standard needed to be adopted by the industry to ensure a

common language and process. Much work has been done by Origo to help

develop these standards.

The need for a standard for this electronic communication was clear. To

make the investment in these new processes pay off for insurance providers,

they would want to have just a standard product application deployable

across different sales channels and different service providers who could

then make them available to independent advisers.

It would also ensure that IFAs would need to invest in just one

back-office system to conduct e-commerce with all insurance providers.

IFAs also need format standards to help make it easier to fill out

proposals, which, to date, vary by provider and product. This means that

IFAs currently have to fill out many different forms requiring different

information in a different order, with little consistency. Recent research

indicates that 35-50 per cent of all applications filled out have some kind

of error or missing information.

New electronic proposals mean that the process of ent ering data is made

clear and easy, with the additional major benefit of the information being

validated at the point of entry, significantly increasing accuracy for

submission and processing.

Something of a breakthrough was made when the industry realised that it

did not need a form as such but it had to make sure that the data the form

provided, together with its validation, was correct.

With this in mind, Origo laid out standards for gathering and validating

client data. Software companies then took these standard and began

developing systems designed to help gather this data efficiently.

Focus Solutions was the first to market with software based on this

philosophy in September 1999. Its software enables providers to build their

electronic application proposals and helps IFAs to fill them out correctly.

It is called goal:proposal and is based on an internet messaging protocol

called XML. It provides the insurer with a library of industry-standard

questions, together with facilities to customise questions, and uses

business logic to promote relationships. Questions that are not relevant or

that have already been filled out by automatic transfer from the IFA&#39s

point of sale or back- office systems (such as name, date of birth and

wife&#39s name) are not asked as the information has already been collected.

At the centre of goal:proposal is the Pac (product application component)

which creates and enables proposals to be presented onscreen, completed,

managed and submitted by the user.

Pacs use Origo&#39s agreed data standards designed so that the industry as a

whole will be able to benefit from e-commerce and automated processing. The

Pac itself is based on the principle that paper-based forms should not

simply be replaced by a form placed onscreen.

Instead, the data can be captured electronically from IFAs&#39 point of sale

systems and from electronic quotation services and transferred

automatically to the applications. This means that only missing information

needs to be entered by the IFA and these questions will be flagged to the


Goal:proposal can also indicate to the adviser if the application has not

been filled in to the insurer&#39s requirements. Ten major insurers are

already using the product, including Scottish Equitable, CGU, Legal &

General, Norwich Union and the Prudential.

Pension and mortgage applications are expected to start being processed

electronically within the next few months.

The challenge now is to convert the rest of the paper chase to e-commerce.

Many other parts of the process are driven by regulatory requirements and

require mounds of paper to be printed and delivered.

Some of the documents that remain in paper form include key features

documents for product and type of product, the declaration itself, the

confirmation schedule and policy documentation.

It is clear that there is a need to reduce the number of documents and

sheer quantity of paper that still goes to the client, much of which is

never read. Rationalisation of this paperwork is likely to form part of the

FSA&#39s remit in the future. It may be some time before the whole new

business process is done electronically. But a major step has been made.


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