Insurance companies should be investing in new technologies in order to improve the efficiency of the sales process for advisors, tap into new sales opportunities and keep up with changing consumer expectations, industry experts said on Thursday.
At Toronto-based Canadian Life Insurance Standards Association’s (CLIEDIS) annual seminar in Mississauga, Ont., Michael Williams, president of the Canadian Association of Independent Life Brokerage Agencies (CAILBA) and partner at BridgeForce Financial Group, called on industry members to embrace technology in their businesses.
“We all need to find more efficient and effective ways to run our business,” he said.
In particular, Williams is urging insurance companies to develop what he calls “smart electronic risk applications” – electronic life insurance applications to replace the antiquated paper-based applications that still prevail in the industry. This technology would allow advisors to submit insurance applications to both to managing general agencies (MGAs) and carriers using their tablets and smartphones directly from client meetings, making the process significantly faster and easier, according to Williams.
“We’ve got to eliminate that manual process,” he said. “It’s very, very inefficient.”
Some carriers have already developed this technology, and others are currently working to get it in place.
There is considerable demand for this among advisors, Williams said. In a survey of advisors at one MGA, 63% said that if an electronic application was available, they would use it all the time. Another 27% said they would use it at least sometimes, and only 10% of advisors said they would never use an electronic application.
“The message is very clear: the advisors are ready to embrace technology,” Williams said.
Clients are similarly eager to see more advanced technologies utilized by their insurance companies, according to Chuck Johnston, research director for insurance at international financial industry consulting firm Celent. As clients increasingly embrace mobile technology, for instance, he said they’re expecting insurers to do the same.
“That’s where your customers are,” he said. “That’s how they want to do business with you.”
Members of the millennial generation, in particular, are spending less time on computers and more time on mobile devices, Johnston said. Since they represent the next generation of clients for the insurance industry, he said it’s critical for the industry to develop tools designed for the mobile channel specifically.
The social media realm also holds vast potential for the insurance industry, according to Johnston. In particular, he said social networking sites contain extensive information about clients.
“A lot of the information you could glean from your customers is going to come from the social sphere,” he said. “It’s a great source of information.”
However, he noted that the industry is still largely reluctant to embrace social media. “We’re all interested in it,” he said, “but we’re also afraid of it.”
Johnston acknowledged that insurers face a variety of compliance and legal challenges in their use of social media.
“There are a lot of concerns around using social information for things like claims, and there are definitely concerns about using social information for underwriting,” he said. “You’re going to have constant challenges around how much information you can use, and how do you use it.”
Despite the challenges, Johnston said the opportunity is huge. He said the ability for insurance companies to access more information about their clients – through social media and other channels – could allow them to develop much more targeted products and offerings, and to have more effective interaction with clients.