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Leader of the PAC

When representatives from a life company come to my office and say

they are getting 96 per cent of their business in an important

product area electronically, they have definitely got my attention.

This was exactly the statement made by Legal &General when it

showed me its protection choices software recently.

L&G says two-thirds of this business originates from its

appointed representative network. Even if this network is submitting

100 per cent of its business electronically, it would still mean that

88 per cent of IFA business for this product is originated


At a time when very few life companies have succeeded in converting

even 10 per cent of their new business to electronic submission, this

service must be worth further examination.

Some of this take-up is clearly driven by the additional 10 per cent

commission offered on cases processed in this way. However, I do not

believe that commission alone can generate such a dramatic level of

take-up compared with the rest of the market.

One of the most hotly debated issues concerning electronic trading

over the past few years has been online versus offline, especially

concerning new business.

The vast majority of services built by life offices to aid IFAs in

the past five years have been based on using secure internet services

for a limited user group such as an extranet.

This has enabled almost all providers to make some level of online

services available to advisers. These services can be easily rolled

out by providers in that they do not require any specialist software

to be installed on the adviser&#39s computer. A simple browser and

access to the internet will suffice.

Currently, extranet-type solutions fall down in two imp-ortant areas.

First, you must have access to the internet whenever you want to use

these solutions.

The reality is that much of the advice process is still carried out

away from the IFA&#39s office such as at the client&#39s home or their

place of work in situations where it is frequently not practical to

ask clients if you can use their phone to connect.

Mobile phones offer an alternative but mobile internet access is

still painfully slow.

In addition, extranet-based services have a very limited ability to

make use of other information that the adviser might already have

within their various systems.

As a result, invariably, the adviser will be involved in rekeying

some of this information. This is wasteful and few advisers have good

typing skills. It also takes up valuable time with the client.

In developing its service, L&G has concentrated on keeping the

adviser&#39s keyboard activity to a minimum. The software is very much

built around supporting the mortgage sales process. Integration has

been built with both Mortgage Brain and Trigold sourcing packages so

that once the adviser has guided the client through the mortgage

selection process, as much information as possible is transferred

from the mortgage-sourcing package to the L&G software.

When the right package of cover is agreed, the clientspecific key

features document is generated.

Having agreed the client requirements, data is again transferred

seamlessly from the quotation part of the system to the electronic

application. This uses the product application component (PAC)

technology which allows advi-sers to get information offline, store

it on their compu-ters and forward it to the life office when an

internet connection is available.

Again, as much as possible is prepopulated with data moving from both

the third-party mortgage-sourcing packages and quotation software so

nothing that has been entered has to be typed in again.

Clearly, there are some questions that cannot be pre-populated and

where such prepopulation would not be desirable, particularly

concerning medical questions.

To minimise the use of the keyboard, these are dealt with as much as

possible by the use of dropdown menus, etc, that can be operated by


The whole process is signature-free. Having completed the PAC, it is

sent to L&G by the adviser when an internet connection is


Copies of the information gathered and used for the purpose of

underwriting the case are sent to the client. This is known as the

confirmation schedule and protects both the product provider and the

adviser in the event of any subsequent questions over disclosure.

Significantly, the moneylaundering checks are also dealt with in a

paperless way, with the adviser selecting the forms of identity

produced from dropdown lists and recording the relevant serial

numbers. I know many advisers who would like to see more life offices

take such a constructive approach to these checks.

In building this service, L&G has taken advantage of two key

functions missing in so many of the other electronic new business


First, the ability for the adviser to generate electronic new

business anywhere they can use their laptop, without the need for

internet access.

They have also made maximum use of existing information that the

adviser has already captured.

This is a significant imp-rovement not just on extranet services but

also on the PAC-based new business services offered by many other

life off-ices via portals such as Assure-Web and The Exchange.

Although clearly limited to some extent in the IFA market by the fact

that it is operated by a single provider, the dramatic success of

this service in delivering the vast majority of new business

electronically must be seen as evidence that advisers can be

persuaded to trade electronically if the process created is

sufficiently supportive of their needs. I believe there is a massive

lesson here for the whole industry.


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