Historically the protection industry has not made the advice process an easy one for advisers.
Unfortunately, given the regulatory backdrop, rather than complete an application form in a fully compliant manner, it is often easier for a customer to ignore protection all together, rather than enter a journey that is not always as conducive to the final purchase of a product as it might be.
Elsewhere in financial services a common application process is being established. While the protection market has yet to reach that point, and arguably will never do so enabling providers to maintain their underwriting differentiation, earlier this year it backed the next best thing – an evolution to the universal application process, called ‘Quote+’.
With almost universal industry backing Quote + is currently undergoing live testing with one of the UK’s leading aggregators, ahead of the adviser roll out.
Quote+ standardises the basic screening of applicants on current underwriting factors to identify particular needs. It seeks to address the huge fall off between initial application and final conversion which, for some products, can result in less than half of applicants purchasing a policy.
The new process tackles the fundamental issue of providing a price to a customer without having obtained meaningful data – the perils of a ‘one size fits all’ assumption.
By adding 14 simple pre-screening questions the technology will be able to direct customers to the insurers that are most likely to cover the applicant.
It achieves this by automating the selection/de-selection of provider by an applicant’s personal risk profile.
There are several key benefit of this process. It creates massive time savings for advisers by getting rid of multiple applications, or ‘multi-apping’ and also prevents advisers applying to the wrong provider and so will deliver higher conversion rates. It also gives a relevant and personalised indicative underwriting requirement for each client.
This application process will therefore help resolve the issue of acceptance criteria at the illustrations stage, and ensure that clean lives can be fast-tracked with simpler acceptance processes with the minimum of additional application requirements.
It also accurately identifies 70 to 80 per cent of rated cases, enabling them to be handled more appropriately and by the most suitable provider.
A spin off, but none-the-less beneficial impact of this process, is that it also allows providers to innovate and compete on their underwriting criteria.
Providers have a much clearer view, alongside the data that reveals the how and why a decision was made; why they lost a case and how far it went. Ultimately we see this as allowing providers to deliver new solutions and better customer outcomes.
For more complex cases there is also a tele-underwriting service to support, or completely manage the process for advisers, allowing them to apply different resources to different risks, while still ensuring a ‘high value’ customer will receive the appropriate service and products without eating into the adviser’s time.
Quote + rewrites the rule in unprecedented ways. In an age where the customer is king, and technology is his servant, it will help equip the protection industry with the transparency and functionality the modern customer demands and understands.
Neil McCarthy is sales and marketing director at Direct Life & Pension Services Ltd