Understanding the Benefits of Electronic Applications and Policy Issue

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20 November 2012

Life and Annuities, North America


As insurers fight for market share in a down economy, the insurer that provides convenient, fast and low cost customer service for life insurance applicants will have an edge. Investment in the new business process can positively impact both producers and end customers. Implementing eApplications and ePolicy Delivery can help drive the desired results.

In the report, Understanding the Benefits of Electronic Applications and Policy Issue, Celent provides life insurers with high-level benchmarking data related to the use of electronic applications (“eApplications”) and electronic issuance (“ePolicy Delivery”) of life insurance policies. It explores key metrics that insurers should have at their disposal and identifies important trends that will shape insurer decisions regarding the adoption of eApplications and eDelivery.

The findings in this report are based on the data provided by 20 insurers.

“In the current sales climate, insurers are looking for ways to improve unit costs. Insurers are achieving results by changing their cost structures through process simplification and automation. By implementing eApplications an insurer is able to reduce new business costs like mailing, imaging, and data entry,” says Karen Monks, Analyst with Celent’s Insurance Group and coauthor of the report. ” The end result is a lower per application cost and a lower per policy issued cost as we found in our report.”

“This study highlights the business impact technology investment in the distribution process can have on an insurer’s bottom line” adds Chuck Johnston, Research Director with Celent’s Insurance Group and coauthor of the report. “eApplication/eDelivery have been long been an option for insurers and today’s web-centric culture has made adoption easier as agents and consumers expect e-service from carriers.”

Based on a survey of insurers that adopted eApplication technology, Celent analyzes the essential metrics related to the new business process. Celent also presents the challenges that insurers face when implementing eApplications and which strategies worked or didn’t work when eApplications were rolled out to the insurers’ distribution forces. This report addresses these challenges by providing life insurance carriers with high-level benchmarking data in both quantitative and qualitative results. It explores key metrics and identifies important trends that will shape insurers’ eApplication and eDelivery projects moving forward.

This will be the first of several reports related to straight-through processing in life insurance. This 22-page report contains 13 figures and 3 tables.