In this week’s Money Marketing you will find the Finance & Technology Research Centre’s latest e-Excellence ratings for protection providers. This is the first time we have applied the expanded format, which includes not only overall ratings for providers’ propositions in each of the key areas of life, critical illness, income protection and menu plans but also our new star rating assessment that benchmarks each provider on 48 different elements of their individual propositions.
The format is designed to drill down into the detail of each proposition so advisers can identify which providers are strongest in the areas they see as most important. The results of the study makes me think it is worth summarising the major progress that has been made in the protection market in the last decade.
In terms of online new business submission, there is no doubt protection has led the way. Most providers can report the majority of their protection applications are submitted electronically. Indeed, Aviva now has 100 per cent online submission for its simplified life product. Equally, Legal & General, which shares joint first place with Ageas in our 2011 protection e-Excellence ratings, is achieving 97 per cent online submission.
Even some of the insurers that score less highly in our ratings are seeing real savings. Zurich, for example, receives more than 80 per cent of IFA business through its extranet, with about 70 per cent of those applications realising the full benefits of e-submission through online interactive underwriting.
Zurich underwriting and claims director Phil Brown says: “When launched, about 18 per cent of applications could be immediately accepted online without the need for the IFA to send in any paper applications or other information to Zurich.
“Our immediate acceptance rate has now increased to 52 per cent as the interactive questions allow much more information to be obtained without the need for separate questionnaires or letters.”
It is also important to recognise the speed with which complex medical conditions can now be approved. Bupa Health Assurance, the service that will form the basis of the new Friends Life protection platform, takes pride in the speed in which cases can be underwritten. Head of sales and marketing Steve Casey says: “The quickest case I recall was when an IFA put a customer on risk for a critical-illness policy in 20 minutes.”
For cases where under-writing would have been necessary 10 years ago, how long would this have taken?
The next big thing for protection and for a number of other products is appli- cation tracking. This is an area where Ageon and Ageas have led the way with their own services, although I would really like to see them and all other insurers adopt tracking message delivery to adviser client management systems as being implemented by Avelo for its Adviser Office customers. It is important for other client management systems to also embrace this functionality.
Another important service delivered by many insurers is electronic commission payments. Aegon has successfully rolled this service out to more than 1,300 IFAs, counting networks as one firm rather than the number of individual members.
IFAs are not forced to turn paper off but can choose to once they are comfortable with the service. This has been achieved with several big distributor firms which previously received paper statements on a daily basis and are now saving thousands of pages of paper as well as countless hours of adviser time each month. Such facilities are available for their investment products as well as protection.
Recent analysis by Avelo suggests this can mean at least a 40 per cent reduction in the adviser time taken to process commission statements and there is evidence the saving can be considerably higher in some cases.
There has been a significant move to help advisers improve business retention through the use of electronic messages. Again, Ageas and PruProtect deserve credit here but the publication of a best practice guide from the F&TRC protection forum means adviser requirements are now clearly documented for other providers to follow.
The range and diversity of individual e-service delivered may actually conceal the full extent of the progress that has been made since the launch of the first online application services 10 years ago.
Having said that, different providers have evolved roughly the same processes but with very different timeframes, presenting training issues for IFAs.
The F&TRC protection forum has been working with most of the main life offices and reinsurers and many of the biggest protection IFAs – including Sesame Bankhall, Lifesearch, Direct Life and Pensions, London and Country, Positive Solutions and True Potential – to map the exact processes used by each insurer and explore how greater consistency might be achieved to reduce adviser costs and training overheads.
LinkedIn users can find the executive summary of the last meeting on SlideShare under my LinkedIn profile. Other firms with an interest in prot-ection are welcome to join this initiative and should contact me if they wish to do so.
The ruling on gender from the European Court of Justice presents a big test for protection but it is important to recognise how far we have come in such a short time. The successes outlined above show that technology is the key to working smarter rather than harder and make the case for further investment to take the sector to the next level – progress that will be essential to address the challenges of unisex underwriting.
Ian McKenna is director of the Finance & Technology Research Centre