The launch of its e-Select service in 2003 led the way in demonstrating the savings and efficiencies that can be achieved by using a powerful online underwriting engine to set up new protection policies.
The service enables a drastic reduction in processing times, with the ability for advisers to get many cases on risk in minutes rather than weeks. E-Select is now used for the submission of 89 per cent of life and critical-illness business, with 47 per cent of such cases accepted instantly.
Until this month, however, the service has not been available for income protection plans. Given the company’s position as a market leader for this type of contract, this has been a surprising omission and the extension of the service to cover these contracts should make setting up plans much easier for advisers.
There are a number of useful additional features in the new service, including the way it automatically works out the maximum benefit based on the salary level entered into the system. This is used as a filter to stop users applying for more cover than the permitted maximum benefits.
However, I am rather surprised that it does not also compare the level of state benefits that would be paid. In my experience, such a comparison presents a compelling argument as to why consumers need income protection cover.
Many years ago, Zurich offered an excellent needs’ analysis tool called Quote Z, which I found to be an invaluable aid in selling income protection.
Friends Provident’s new system can handle applications for plans with a split deferred period as well as pension protection benefit. The firm tells me it is the only office to offer this as a stand-alone online product. It is now offering a version of its income protection which can be linked to the retail prices index although this is only offered electronically, not as a paper-based product.
Where it has not been possible to underwrite the application fully online if some medical information has not been supplied and the information has not been forthcoming within 48 hours, the case will be referred to a nursing professional to make an underwriting phone call to the client. This may avoid the need to delay the application by going for a GP’s report. I believe this represents a sensible balance between online and call-centre underwriting.
Call-centre-based processes can be useful as they remove the need for the adviser to capture the detailed medical information but they cannot match the speed of underwriting offered by a fully automated online process. Also, if call-centre underwriting is always used in preference to online services, it is a more expensive method of operating for the provider. It is good to see a firm come up with a pragmatic approach which offers the best of both worlds.
Income protection using e-Select is available now from Friends’ extranet and via Exchange. It will be extended to AssureWeb and Webline in the future.
A slick automated online application process is important but there are a lot more steps that can be taken to improve on the traditional methods that our industry has used to process new protection cases. In recent months, Friends has launched further services to enhance the process after cases have been submitted. Probably the most significant of these is a choice of application tracking systems.
The download service for tracking the progress of new business can be set up to operate daily, weekly or monthly at a specific date or time selected by the adviser.
Friends sends an email to the adviser notifying that the download is ready. This can be sent to a single mailbox or multiple addresses if requested. It includes a link to the Friends’ extranet which the adviser accesses using normal security processes.
Advisers have the option to receive a single file with the full industry standard bulk download data or one of three subsets of this information – commission, risk and investments.
This is done as a separate file as some firms have more segment files, so different information can be given to different parts of a business.
The information in these files includes only changes in status, not all cases, to minimise the size of data transmitted and to make it easier for the adviser to deal with. The files are available in a comma- separated value format, which most advisers will find easier to manipulate, or in XML for those with IT skills. Friends tells me the former is far more popular with advisers.
The downloads provide a range of information that can help an adviser process cases more efficiently, such as on-risk information and commission expectation, as well as proposal status.
This includes the proposal being live, awaiting underwriting, being underwritten, declined offer, non-standard or standard. I would like to see more detailed information about the exact underwriting status although this is probably ideally delivered as a real-time XML message to the adviser system as each action happens.
A further service being rolled out is called Event Manager and is designed to supply information to protect existing business. It includes an offs and overdue report to identify any cases that may be at risk so the adviser can take action and contact the client. This includes the financial implications of cases going off risk, such as the amount of clawback and lost renewal commission.
Where a case has lapsed, it includes contact details for lapses. Information is also provided on all letters that have been sent to the client. Such has been the success of this process that some advisers have asked for copies of paper documents about such cases to be turned off.
With the launch of these services, Friends Provident has improved its FTRC e-Excellence rating for income protection from ee+ to an eee and taken top spot in our league table of best income protection e-commerce providers.
I know there are several other providers with exciting new developments coming on line in the near future and will be fascinated to see how these measure up. Friends has set a standard that will be hard to beat.