Special Feature

2013 Insurance Advisors’ Report Card

What do advisors have to say about their firms? All the insight, the ratings and the candid comments from the August 2013 issue of Investment Executive newspaper. Click here to download and view the main chart.

The way of the future has arrived. Advisors are demanding greater capability to process applications electronically

By Brent Jolly | August 2013

The insurance sector is making considerable progress in its quest to modernize the way it processes and shares data between carriers and distributors, which is much more in line with the demands of financial advisors surveyed for this year's Insurance Advisors' Report Card.

Overall, advisors gave their firms' and managing general agencies' (MGAs) "back office and administrative support for new business: support for application processing" one of the highest importance ratings, at 9.4, up notably from 8.9 in 2012 as the demand for more advanced methods of processing have taken hold across the sector. In fact, this 9.4 importance rating is the highest ever for the category since Investment Executive split up the "back office and administrative support" question into three distinct categories in 2009.

"The time has come," says Julie Parrott, executive director of the Toronto-based Canadian Life Insurance Standards Association (CLIEDIS). "We are at that point in time at which [everyone] is realizing that data and technology gives you an advantage."

Since May 2012, CLIEDIS has been working in collaboration with several distributors, carriers and agency-management vendors, including BlueSun Inc. and Winfund Software Corp., on projects that will help to standardize the way that data is exchanged electronically between firms.

CLIEDIS, after consultation with firms, published a series of recommendations in October 2012 to help firms reconcile their ongoing issues with pending feeds on new insurance policies. These recommendations focused solely on the communication of data between firms, says Parrott, and did not infringe on any firm's proprietary "black box" processes.

These recommendations should be welcome news for advisors because, if they're adopted, they will help to provide advisors with more accurate and up-to-date client information.

"Put simply, it's difficult to advise [clients] without having the data, especially if you sell across multiple manufacturers," says Tim Fitzpatrick, president of Calgary-based VirtGroup Inc., which produces VirtGate, a distribution-management system that helps to automate the processes of insurance agencies.

For example, says Fitzpatrick, it's a practical impossibility to present clients with up-to-date details of their portfolio without having data-sharing between carriers and distributors: "Advisors would have to go through tons of paper, which is time-consuming, or go to various websites, which might not be up to date."

It's against this backdrop that advisors are becoming increasingly aware of the critical role that the electronic sharing of data plays in building a profitable business. In turn, they are demanding more from their firms.

"[We need] more accuracy in web-based information," says an advisor based in British Columbia with Woodbridge, Ont.-based MGA Hub Financial Inc. "We're dealing with hundreds of thousands of dollars, and we want it to be right."

That's a concern that was echoed by many advisors across the country. In fact, although electronic processing still is in its early days, it appears that many firms surveyed this year are awakening to the considerable gains that electronic processing and sharing of data can provide. This realization is what probably has pushed many firms to improve their internal structures for handling new business.

"We have access for our advisors to view the status [of their client applications] online," says Patricia Ziegler, chief operating officer with Kitchener, Ont.-based Financial Horizons Inc., an MGA that tied for the top performance rating in the category with a 9.0.

"[Advisors] can go online at 2 a.m. and check the status themselves or they can rely on us," says Ziegler. "We'll provide them with updates when a change is made in the pending process."

Financial Horizons is just one of the firms and MGAs in this year's Report Card that have worked with CLIEDIS to obtain a detailed one-on-one review regarding how the recommendations for standardized sharing of data can be implemented by their firm.

Other MGAs that have participated in this process include Toronto-based PPI Advisory and Mississauga, Ont.-based IDC Worldsource Insurance Network Inc., both of which also received a rating of 9.0 in the category, as well as Hub (8.2). Firms with dedicated sales agencies that also have participated in a review include Mississauga-based RBC Life Insurance Co. and Waterloo, Ont.-based Sun Life Financial (Canada) Inc., the latter of which saw its rating in the category rise to 8.1 from 7.6 in 2012.

"One of our key strategies is to create a completely paperless office for our advisors," says Vicken Kazazian, senior vice president of Sun Life's career sales force. "Today, our advisors process all their insurance applications electronically."

Furthermore, Kazazian says, Sun Life advisors now can get the status of a policy online via their Advisor Business Centre platform.

"Everything is computerized," says a Sun Life advisor in Alberta. "We have electronic applications, which makes processing quick."

Although it appears that many firms are getting aboard the electronic data-distribution bus, advisors said some firms are more on top of their game than others are.

"They're pretty slow on the life insurance side," says an advisor on the Prairies with Winnipeg-based Great-West Life Assurance Co. (GWL). "The processes need to be streamlined. They are killer on forms. Clients have given up asking questions because there is so much paperwork."

Hugh Moncreiff, senior vice president of GWL's Gold Key distribution network, says the firm is taking action in response to these kinds of criticisms: over the past year, GWL has beefed up the number of applications that now can be completed online.

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