Customer journey mapping for a CIO

Customer journey mapping for a CIO

If you’re like most CIOs, your firm has embarked on the latest craze – customer journey mapping.  I’ve blogged about this before.  It’s a terrific exercise – intended to identify how customers engage with your firm through every type of interaction – personal, machine, or paper.  Most are focused on optimizing the interactions between the policyholder and the insurer; some include optimization of the agent experience, and some are starting to look at expanding the experience to look at how to embed the insurance experience in non-insurance aspects of an insureds life.  (See FIGO for a great example).

Some firms have hired third party consultants to help with this exercise; some have even put a new position in place – a Customer Experience Officer – someone who looks across the traditional siloes of underwriting, claims and finance to craft a holistic experience. 

As carriers go through this exercise, demands are being placed on the IT team. Here’s a few ways you may be asked to participate:

  • Data and reporting– Part of understanding the customer journey is tracking it.  Understanding where the biggest interaction points are, and where the biggest pain points are is the first step in improving the experience. You may be asked to install tracking software on the website (if it’s not already there).  Third party data and AI may play into new segmentation schemes as teams are looking at new ways of doing dynamic segmentation (See my report on this topic)  You may be asked to add new reporting or analytics tools as the team looks at using predictive modeling to identify next best action. And you’ll be asked to measure the progress of the new journeys through new reports and new metrics such as a customer friction factor.
  • Workflow and Task Automation – Much of customer journey mapping is figuring out how to operationalize the new journey.  Once the customer experience has been defined, the hard part is to deliver on it.  If you are reliant on people to deliver a consistent experience, you leave yourself open to error.  Your team may need to spend much more time defining business rules and implementing workflows to deliver the experience. If you are one of the insurers that has not yet automated this, you may need to consider adding some additional technology.  (This has actually been one of the major drivers of core system replacement).
  • Customer Communication – Insurers are looking at eliminating the jargon and simplifying the message. This may mean redoing forms or creating new forms.  That’s not a huge deal.  But where we see more effort is finding new ways of communicating with customers.  Text, mobile applications and video are all growing ways of communication.   Here’s a great example of automated video communication to deliver a personal touch with no people involved.  Push communications, text or phone messages letting the claimant know their check has been issued, for example, can reduce calls to the call center while improving customer satisfaction
  • Omni-channel access – Smartphones are on track to bypass desktop computers as the number one way to access websites.   You’ll need to make the website mobile-friendly.  But you also may need to put in a call center – especially for those insurers who are looking at adding a direct or semi-direct channel. 
  • Cool stuff – As insurers start going down this path and get more comfortable being creative, they often look to add more ‘cool stuff’.  Gamification is one of the newer areas – using game techniques to drive engagement and to drive behaviors.  Drones are reducing the need for scheduling inspections.  Video chat for first notice of loss can reduce fraud and improve satisfaction.  There are many tools – and many InsureTech startups playing in this space. One last area that can be kind of cool – the user interface.  If you don’t have formal skills in this area, definitely use an outside consulting firm to help with this. UI design is fairly complex and makes a huge difference in the customer experience.  All of this cool stuff requires integration. One note, while the partners out there likely all have open APIs,  your team may end up spending more time than anticipated making sure your own systems can integrate and send data and service calls back and forth.
  • An agile organization –  As insurers become more skilled at understanding how to tweak and enhance the customer journey, speed becomes even more important.  Creating an innovative, agile organization  is a critical aspect of delivering quickly.  If you haven’t chatted with Mike Fitzgerald on innovation, or Colleen Risk on shifting to an agile development process, now might be the time.

In a highly fragmented industry with excess capital and declining rates, insurers are looking to building a solid customer experience to drive growth and retention.  Journey mapping is one of the tools being used.  Time to step into the fray and get involved. 

Closing the deal with e-signature

Closing the deal with e-signature

E-signature has become such a part of my life that I am surprised when I am asked to provide a wet signature. I sign for credit card purchases, deliveries and legal documents, even my tax returns (!), using a click or a digital signature pad. But, if I want to change my beneficiary for my life insurance, I have to download a .pdf, sign the document with a pen, and mail it to the insurer. Insurance has been a slow adopter of e-signature. However, as the process of buying life insurance and receiving post-issue service is becoming increasingly more digitized, insurers are working to remove paper from everyday processes.

The adoption of e-applications, web portals, and mobile technology is helping to drive the change, but it is my belief that it is primarily driven by customer expectations set by other industries offering easy-to-use digital processes. Consumers expect companies to be easy to do business with and will choose the company they purchase goods or services from based on the ease of use. E-signatures provide a way to offer a digital experience that is easy to use, fast, and secure.

In our new report, Putting a Lock on Straight Through Processing, my colleague Karen Monks and I profile 11 providers of e-signature technology for insurance. This is the final report in a series that began last year.  During the year, we looked extensively at new business acquisition and the technologies that power it. We wrote reports on solution providers for illustrations, e-application, and new business and underwriting in addition to e-signature. Along with the vendor reports, the series included two benchmarking reports and a report in which insurers compared their level of automation to Celent's automation capability matrix to determine if they are minimally, moderately, or highly automated.  

With the increased emphasis on cycle time and cost, e-signature is being increasingly being adopted as a way to check the box on making processes fast, flexible, and efficient. E-signature software frequently integrates with other solutions to support new business acquisition as well as post-sale service.

The ability to collect an electronic signature for a new application at the time of sale providing the legal authorization to obtain underwriting requirements and evidence from third party providers has enabled straight-through processing and the ability to provide a decision to the applicant within minutes, instead of weeks.

Common e-signature use cases for life insurance:

  • New policy application
  • Disclosure delivery
  • Agent licensing and appointment
  • E-delivery of policies
  • Beneficiary change and other policy servicing
  • Premium payments

Life insurers that investigate e-signatures will be pleasantly surprised by how quickly and relatively inexpensively e-signature can be implemented as well as how easily and securely a paper signature process can be automated. I am a big fan, as I’m sure you are, of less paper and more automation!

 

A Day to Celebrate: Celent 2017 Model Insurer Winners

A Day to Celebrate:  Celent 2017 Model Insurer Winners

Last April 4, Boston, a city surrounded by history of patriotism and independence, was witness of Celent Innovation and Insight Day (I&I day), an event in which 16 insurers were recognized as Model Insurers for their technological initiatives that, I’m sure, inspired more 280 professionals of the Financial Service industry by the efforts and ideas on how other insurers could implement them within their organizations.

Andrew Rear, chief executive of Munich Re Digital Partners was the Model Insurer keynote speaker. He discussed the role of Insuretech for large insurers and spoke of how these insurers could acquire agility, the pathway that they needed to choose, and more importantly, the risks they had to bear. He also discussed how Financial Services were redefining the way financial products are sold, delivered, and serviced.

No sensible website asks you for your email address anymore. They should know who you are by other means

~Andrew Rear

 

In the afternoon, our analysts participated in a series of debates focusing on the Internet of Things (IoT); Artificial Intelligence (AI); and Blockchain which was lively discussion. In between, Celent presented its Model Insurers for five categories and the Model Insurer of the Year.

Digital and Omnichannel

  • CUNA Mutual Group

The rapid development and launch of a simplified-issue term life insurance product that enables members to apply entirely online, answering only two health questions supported by a completely automated underwriting platform that delivers an instant decision in minutes.

  • Lincoln Financial Group

Lincoln Financial created a digital process to meet customer expectations of doing business, automate underwriting, reduce cycle time, and minimize human touch.

  • New York Life

The New York Life Portal initiative utilized digital connectivity and a ratings engine cloud-based platform to achieve a faster process and empower various actors across the organization.

To learn more of these Model Insurers, please read our report here.

Legacy and Ecosystem Transformation

  • Republic Indemnity

Republic Indemnity’s previous home-grown, legacy policy administration system was implemented in 1994 as a single state, Workers Compensation policy administration system. As the previous system could not issue multi-state policies and with the concern of technology obsolesce, Republic Indemnity looked for a new solution to replace its home-grown, legacy system.

  • ERS

Under new management, the business had to transform itself rapidly and replace 20-year-old technology. It had a major license renewal date in two years and would have been locked in by the vendor to a prohibitively expensive contract. It set about transforming claims first, and then policy with full data migration and scheme rationalization, all while growing the underlying gross written premium

  • Insurance Corporation of British Columbia

At the beginning of 2013, the Insurance Corporation of British Columbia (ICBC) launched the Insurance Sales and Administration System (ISAS) policy transformation program. This was the last project in ICBC’s overall $400 million Transformation Program, which had already successfully replaced legacy claims systems and implemented a new Enterprise Data Warehouse and an enterprise service-oriented architecture.

To learn more of these Model Insurers, please read our report here.

Innovation and Emerging Technologies

  • Suramericana de Seguros S.A.- Wesura

Wesura (Sura) created a peer-to-peer Insurance platform around social networks. It develops private insurance communities so final users can share risk and underwrite people who wants to belong to the private community, the bigger the community the more benefits one can receive.

  • Church Mutual Insurance Company

Church Mutual Insurance Company has partnered with The Hartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re, to provide temperature and water sensors connected to a 24/7 monitoring system. This innovative Internet of Things (IoT) technology solution is designed to alert customers to take action before damages and disruptions to their ministries can occur.

  • Markerstudy Insurance

Markerstudy launched VisionTrack in February 2016 to tackle the challenge insurers are facing with rising fraudulent motor claims and to help improve driver behavior.

To learn more of these Model Insurers, please read our report here.

Operational Excellence

  • Aflac

Aflac was in need of some modernizing and is still likely to undergo more change as the industry continues to capitalize on social, mobile, and wearables. In response, the Aflac IT Division implemented an Agile Transformation to its projects and processes to meet the changing needs of the customers.

  • Saxon

Saxon serves the Cayman island community. With a limited pool to hire from or sell product to, Saxon realized that to remain viable in the insurance market, it needed to employ technology to better serve the needs of its customers and grow the business.

  • MassMutual

MassMutual offers a Data Science Development Program (DSDP) in Amherst, MA that trains promising, recent graduates to become well-rounded data scientists over a period of three years. The program combines rigorous academic coursework and practical data science projects for MassMutual — a unique and valuable combination.

To learn more of these Model Insurers, please read our report here.

Data Analytics

  • The Savings Bank Life Insurance Company of Massachusetts

SBLI implemented an advanced risk assessment solution using predictive modeling and data analytics to help reduce cycle times, decrease dropout rates, and eliminate the need to pull fluids and conduct exams, while pricing policies more competitively, placing applicants into appropriate risk classes, and improving customer experience.

  • StarStone Specialty Insurance Company

The initiative is based on the implementation of analytics tools to measure and reduce risk. The solution uses data from internal and external sources. The data may be structured or unstructured. This tool helps underwriters make better decisions.

  • Meteo Protect

Although a broker, Meteo Protect gives clients a means to evaluate how climate variability contributes to their companies’ results by analyzing the relationship between each business activity and the weather. It couples this with a platform to price and underwrite fully customized index-based weather insurance, for any business anywhere in the world.

To learn more of these Model Insurers, please read our report here.

CSE, Model Insurer of the Year

In 2017, CSE has been awarded Model Insurer of the Year for its aspiration to achieve “the best product in the industry.” This meant they had to overcome legacy thinking and practices to re-think all the features including coverage, pricing, rules, process, and communications To do so, they sought inputs from customers and analyzed the market using two common analyses: 5 Cs and SWOT. From this point on, CSE assembled and adapted its core system.

To learn more of the Model Insurers of the Year, please read our report here.

The quality of the submissions this year is a clear indication the industry is turning a corner and embracing transformation, digital initiatives, innovation and valuing data analytics.  It is inspiring to see the positive results the insurers have achieved and a pleasure to recognize them as Model Insurers for their best practices in insurance technology.

How about your company? As you read this, are you thinking of an initiative in your company that should be recognized? We are always looking for good examples of the use of technology in insurance. Stay tuned for more information regarding 2018 Model Insurer nominations.

Distribution Management – New Tools for Strategic Growth

Distribution Management – New  Tools for Strategic Growth

Growth and retention continue to be the top business goals affecting IT investments. Many insurers are focusing on improving their distribution practices as a key technique for driving growth.  Designing, developing, maintaining and managing productive channel relationships can create a sustainable competitive advantage.

Almost every insurer we talk to is focusing on how to grow their book of business.  Some are using underwriting strategies, some are focusing on improving customer service, and others are looking at acquisition.  Virtually every insurer we talk to is also focusing on distribution management.  They’re looking at expanding channels, adding distributors, moving into new territories and working to expand their existing channel in order to improve customer acquisition and retention. 

These multiple channels are effective at targeting different aspects of the market, but add complexity when it comes to channel management. Additionally, the explosion of InsureTech startups carries with it the potential for channel disruption. However, a wide variety of issues creates difficulties for insurers when it comes to effectively managing the distribution channel.

As an insurer begins to focus on managing their distributors more strategically, many put resources towards managing their distributors more effectively in order to extract more revenue from them. Some insurers are focused on managing the compliance aspects of distribution management – assuring the distributors have the right licenses and that state appointments are made in a timely manner.  Others are focusing on using compensation tools and techniques to more effectively stimulate production. Still others are placing their priority on servicing high priority distribution channels and improving service to distributors.  They are utilizing increasingly complex segmentation schemes and tailored programs for preferred producers as a way to retain and grow business.

But in doing so, they often run into a common set of issues.   Standard processes and automation were designed for an environment that has long since passed, one that was much more stable and predictable. In a typical insurance environment today, multiple departments perform separate tasks in the cycle making coordination of activities and integration of information difficult. This is especially problematic since producer management involves large numbers of distributors, different types of distributors, a substantial volume of transactions and data from multiple sources. As insurers expand the number and types of distributors they work with, hierarchies become more complex to manage. This is compounded by multiple jurisdictions, multiple policy admin systems, and limited reporting and analytic tools.

These conditions result in multiple issues including poor service, a lack of insight into producer performance, unreliable data, and high support costs. The inability to link information means that distributors are managed on transactions instead of strategically. Compliance issues continue to plague insurers who find it difficult to monitor licenses and process appointments in a timely manner.

Distribution management systems provide tools and technologies to help insurers with the administrative aspects of distribution management. They are most typically used by insurers with a mixed distribution channel, multiple policy admin systems, multiple jurisdictions, complex compensation programs, or some combination of these factors.  These systems encompass a wide variety of administrative functions that are focused on operational issues such as registering and licensing producers, configuring compensation plans, administering payment and reconciliation, and tracking performance.  They provide tools and technologies to help insurers with the administrative aspects of distribution management.  They are most typically used by insurers with a mixed distribution channel, multiple policy admin systems, multiple jurisdictions, complex compensation programs, or some combination of these factors.

I’ve just published a new report Distribution Management System Vendors: North American Insurance 2017.   It describes what these solutions do and profiles 16 distribution management solutions that are relevant for property casualty and/or life and annuities.  There’s another report that covers all the global vendors as well.  Check it out – or send me a note if you’d like to talk about the report.  And keep your eyes on this space for an upcoming report – Reinventing Distribution – which will give tons of examples of cool stuff that insurers are doing to manage, enable, and shift their distribution channels. 

Digitizing Life Insurance New Business with Technology and Tools

Digitizing Life Insurance New Business with Technology and Tools

In February Celent published its second report using data from a 2016 New Business Benchmarking Survey. The first report compared data based on the average face value of products sold by the participating insurers. The second report presented the same benchmarking data but considered technology as the main focus. It compared the overall averages for a set of key metrics with the averages for high and low technology users throughout the new business process. The findings from the report were not surprising; except for the fact that we had to acknowledge that technology in the new business is still slow to take hold.

We found that electronic application use is on the rise. Just less than one half of all applications by the participating insurers were submitted electronically. The insurers that sold moderate face value policies were more apt to use electronic applications than insurers that sell high face value policies. That makes complete sense since most insurers begin their eApplication journey with less complex products like term or whole life. Celent believes that all insurers can achieve benefits from eApplications. Less than half the insurers in the study Insurer reported having an eApplication, and those with captive insurers submitted a larger percent of their new business via eApps. Direct to consumer as a channel was reported by four of the insurers and they received 20% of their applications from e-apps targeted to consumers.

Data quality is a critical issue that strongly impacts unit costs. As a group, the insurers that participated in this study estimated that 69% of all paper applications received were not in good order (NIGO). For those that implemented eApps and have a technology heavy new business process the NIGO rate fell to 5%.

We also found that imaging systems were ubiquitous. Ninety-eight percent of paper applications were imaged. Imaging was also used for the underwriting requirements that are received in paper. Workflow systems were also very common. But as the process moved closer the underwriting evaluation the level of automation began to drop off. Seventy percent of the participating insurers could automatically order and receive underwriting requirements; however, this happened for less than a quarter of the applications. Since most third party providers of underwriting evidence can provide data in digital formats, this Celent recommends this as an area for future investment by insurers. Further down the line shows that technology is not king in the underwriting departments yet. Automated application evaluation, underwriting/case management workbenches, and electronic signatures were used by over half of the insurers in the study; however, less than 40% of all applications were managed on a workbench. Even fewer were processed by an underwriting system, and only 12% included electronic signatures. Electronic policy delivery, new in the 2016 survey, occurred for 4% of all applications.

When an insurer is fully automated in the NBUW process, benefits can be seen in cost and time metrics. For insurers that implemented technology throughout their new business process the unit cost per application dropped from US$312 to US$237, and unit cost per policy issued fell from US$440 to US$329. The average cycle time fell from 38 days to 17 days for the insurers that implemented a full suite of new business and underwriting technology into their process.

The highest-level conclusion that can be drawn from this new business benchmarking data is that even among top-tier insurers, there are significant differences in new business performance, particularly when technology is considered. Creating performance measures such as unit cost, percentage of new submissions “in good order,” and cycle time is essential. Monitoring those measures against a peer group will be an eye-opening experience for insurers that do not do it today. While direct comparisons between insurers are difficult due to product and channel differences, this study and our previous one suggest there is a strong relationship between face amount and unit cost. It also suggests that technology can have an impact on costs and cycle times when it is implemented across the process or even in just parts. Insurers are urged to analyze their own performance, starting with metrics such as unit cost per application received, unit cost per policy issued, and percentage of cases received not in good order.

The notion that life insurance underwriting is more art than science (and thus exempt from automation) is misleading at best. It is true that the subtleties in underwriting present unique challenges for technology. But underwriting is a process like many others in that it requires certain data as input, and there are rules that govern both the process flow and the decisions that result from it. Following basic principles of getting clean data and automating wherever possible will help insurers do their jobs more cheaply and more effectively.

Process improvement strategies should focus on implementing electronic applications, automating the receipt of third party underwriting evidence, and automating underwriting decisions. The order depends on the distribution strategy and change management processes in place to maximize the benefit. Few insurers have maximized the potential value of new business automation, but the findings in this report show the time savings and cost reduction potential of implementing technology across the new business process flow.

How Insurity’s Acquisition of Valen Could Create a Virtuous Analytics Circle

How Insurity’s Acquisition of Valen Could Create a Virtuous Analytics Circle
It’s open season on insurance technology acquisitions in general, and for Insurity in particular. Today’s announcement of Insurity’s acquisition of Valen Analytics is now Insurity’s fourth acquisition in a multi-year string: Oceanwide, Tropics, and in rapid succession Systema and Valen.   The potential for crossing selling among the five customer bases is obvious.   Less obvious, but of potentially even greater value, is Insurity’s ability to invite all of its insurer and other customers to use its Enterprise Data Solutions IEV solution as the gateway to Valen’s contributory database and Valen’s InsureRight analytic platform.   Insurity now has the scale and the means to create a virtuous analytics circle: individual customers contributing a lot of data through IEV to Valens and receiving back analytic insights to feed into their pricing, underwriting, and claims operations.   Good move.

CES 2017: JUST HOW SMART IS AI GOING TO MAKE CONNECTED CARS AND CONNECTED HOMES?

CES 2017: JUST HOW SMART IS AI GOING TO MAKE CONNECTED CARS AND CONNECTED HOMES?
Walking the exhibit halls and attending sessions at the mammoth Consumer Electronics Show, it was easy to identify the dominant theme: AI-enabled Intelligent Personal Assistants (IPAs).
  • Manufacturers and suppliers of connected cars and homes are betting big on IPAs: overwhelmingly favoring Amazon Alexa.
  • Impressionistically, Google Assistant, Siri, Cortana and others trailed some distance behind.
Natural language commands, queries and responses provide a vastly more intuitive UX. And these capabilities in turn make owning and using a connected home or car much more attractive. But there is a deeper potential benefit for the connected car and connected home sellers: developing context-rich data and information about the connected home occupants and the connected car drivers and passengers. This data and information include:
  • Who is in the house, what rooms they occupy—or who is in the car, going to which destinations
  • And what they want to do or see or learn or buy or communicate at what times and locations
Mining this data will enable vendors to anticipate (and sometimes create) more demand for their goods and services. (In a sense, this is the third or fourth generation version of Google’s ad placement algorithms based on a person’s search queries.) Here’s what this means for home and auto insurers:
  • As the value propositions of connected cars and homes increase, so does the imperative for insurers to enter those ecosystems through alliances and standalone offers
  • The IPA-generated data may provide predictive value for pricing and underwriting
  • IPAs are a potential distribution channel (responding to queries and even anticipating the needs of very safety- and budget- conscious consumers)
A note on terminology: the concept of “Intelligent Personal Assistants” is fairly new and evolving quickly. Other related terms are conversational commerce, chatbots, voice control, among others.

Guidewire makes blockbuster acquisition of ISCS

Guidewire makes blockbuster acquisition of ISCS
Long sought after by Private Equity firms, other insurers, and the occasional investment banker looking for a transaction, privately held ISCS has chosen to join Guidewire (NYSE:GWRE).   ISCS adds its SurePower Innovation end-to-end suite to Guidewire’s existing InsuranceSuite end-to-end suite. This is a decided change of acquisition strategy for Guidewire. Up to now, all its acquisitions have fit into—or added a single new element—to InsuranceSuite.   Why?   Well, if you are a publicly held company growth is good. ISCS immediately brings more revenue and more importantly brings good market momentum with a solid sales pipeline.   ISCS’ focus on small and midsize insurers brings a few other intriguing possibilities. One is that Guidewire and its SI alliance partners will now aim at the large and very large insurer market, leaving the small and midsize market to ISCS. A second is that ISCS will become a vehicle for small insurer growth outside of the US. The third is that ISCS’ more extensive cloud experience, especially with AWS, will step up Guidewire’s movement to the cloud.   For now Guidewire shareholders have a heckuva gift under their Christmas trees.  

Have Electronic Applications Come of Age?

Have Electronic Applications Come of Age?

My first experience with an electronic application was in 2002.  I was working with a major credit card company who included a flyer along with the billing statement that provided information about how to apply on-line for their term life insurance product. We didn't know how many applications to expect; but based on the wide distribution, we planned on a high number.  Many months of effort went into developing the eApplication on the website and creating an interface for the collected data into the new business and underwriting system. This was cutting edge technology at the time. The electronic application collected the Part 1 – demographic information – of the application. The Part 2 – medical information – was collected by a third party. A whopping 523 applications were received from the first mailing. The campaign continued on an intermittent basis for a year with a few over 2,000 applications received. At the end of the year, we threw in the towel and quietly closed down the campaign.  

Why did the campaign fail? There was nothing wrong with the process and the technology, while primitive compared to today, worked well.  The problem was that the idea was ahead of its time.  People were not ready to buy insurance on the internet. In fact, most of the applications received were declined or heavily rated.  The people who applied were driven to do so by a less than stellar health history and had few other options available to them.   

Flash forward to today; digitization of life insurance new business is a hot topic. Consumers are buying everything from mutual funds to groceries on the internet.  However, based on Celent’s recent new business and underwriting benchmarking report, Resetting the Bar: Key Metrics in Life Insurance New Business and Underwriting, nearly 52% of all insurance applications received are still in paper form.

There are a number of problems associated with paper applications, from missing forms to illegible writing, which creates a tremendous impact on an insurer’s ability to process an application quickly and/or accurately. Industry benchmarks have placed NIGO (not in good order) rates at greater than 50%. Electronic applications essentially eliminate NIGO.

Our research shows a significant reduction in new business cycle time for insurers between 2007 and 2016. For high face amount writers, the average cycle time decreased from 52 days to 44 days and from 42 days to 33 days for moderate face amount writers. When asked how the better results were obtained, the majority of insurers had seen a reduction in cycle time due to the use of technology. Some responses included “increase in eApp adoption and increased use of an automated UW engine,” “eApp, more skilled staff, cross-training with 60% automated underwriting, so huge reduction,” and “increase in auto-issue rate.” Obviously, the new business process is ripe for automation.

In Karen Monks’ and my new report, The Doorway to Straight-Through Processing: Life Insurance Electronic Applications 2016, we profile nine software vendors and their 10 electronic applications marketed to life insurance. The report focuses only on stand-alone solutions in North America. For each vendor the solution is described using the customer base, data sources supported, functionality, and technology, as well as implementation and costs.

In 2002, the buying public wasn’t ready to shop for insurance on-line.  That attitude is changing.  An electronic application, along with an underwriting rules engines and electronic contract delivery, to enable straight-through processing will soon be the norm. The time for eApplications has arrived.  An electronic application opens the door to transform the insurance buying experience, increase agent and customer satisfaction, and potentially sell more insurance.

  

 

Predicting the Future – Illustration Systems to the Rescue

Predicting the Future – Illustration Systems to the Rescue

Life insurers continue to strive to increase growth and point of sale tools used by producers continue to evolve. Illustrations are becoming a key factor in keeping producers happy by improving the probability of the life insurance sale. Modern illustration systems provide the ability for agents to illustrate a variety of “what if” life events such as college education, retirement or purchasing a home to show how life insurance can be used to plan for the future events. Quality illustrations can move a “nice-to- have” to a “must-have” for a prospective client.

Functionality changes such as more emphasis on the illustration output, the use of mobile devices, user-level configuration, and full integration with other point of sale tools are just a few of the changes Celent has seen in vendor based illustrations solutions.

In Celent’s new report, Predicting the Future, 2016 North American Illustration Solution Spectrum, 11 vendors providing illustration systems to North American insurers are profiled.  The following trends in North American illustration systems were observed:

• Regulatory changes including NAIC model regulation and Department of Labor fiduciary rule driving increased transparency.
• Disconnected mode of operating with automatic synchronization upon reconnection.
• Increased security with role-based authentication and single sign-on capability.
• Ability to limit the products displayed to those that the agent is licensed to sell and the potential insured is eligible to purchase.
• Configuration has replaced coding for calculation engines but still requires IT involvement.
• Standardization of transactions for third party interfaces.
• Improved user experience with prefilled data, fewer forms, and conversational English-like labels for data entry. Output provides graphs and charts in addition to tabular data.
• Omnidevice support for phone, tablet, laptop, and desktop. An agent can start the quote or illustration on one device and complete it on another.

Today, an insurer can manage what used to be myriad of POS tools that included needs analysis, advanced sales support, suitability, illustrations, and e-applications, which were provided by a combination of vendors and in-house systems, through one interoperable, integrated vendor system.

Insurers also have the choice in the level of system development and maintenance in which they want to partake. Today’s vendor systems offer a spectrum from full vendor maintenance to user-level tools for the insurer to maintain its own systems.

Although homegrown illustration systems are still being developed and used, Celent believes that most carriers looking to invest in a new illustration system should consider vendor systems for core functionality and tools that can help them produce illustration systems more quickly and at a lower cost.

A companion report of 14 illustration vendors selling in EMEA, APAC and LATAM is coming soon!