The life insurance industry has made considerable progress in its efforts to standardize electronic communication, and the benefits of this initiative are becoming increasingly clear, but there is still plenty of work to do in this area, industry players said on Thursday.
At Toronto-based Canadian Life Insurance Standards Association’s (CLIEDIS) annual seminar in Mississauga, Ont., Tana Sabatino, eData project manager at CLIEDIS, gave an update on the organization’s project to standardize electronic communication in the life insurance industry.
“We’re definitely seeing a lot of progress happening in the industry,” Sabatino said.
A major area of focus within the eData initiative has been pending business in the insurance industry, and specifically, ensuring efficient communication between insurers, managing general agencies (MGAs) and advisors, on activity and status updates concerning pending insurance policies.
In October 2012, the organization released a set of recommendations that companies can use to improve their data feeds with respect to pending data, and Sabatino said CLIEDIS has recently seen major carriers such as Manulife Financial Corp. and Industrial Alliance Insurance and Financial Services Inc. begin the process of implementing the recommendations.
In Manulife’s case, she said the results have already been tangible, including faster processing times and more comprehensive data. The new and improved data feeds provide valuable information that makes business more efficient for both carriers and distributors, said Alan Bett, assistant vice president of strategic solutions delivery at Manulife’s Canadian division. He’s hopeful that more MGAs will recognize the benefits of getting this type of data.
“It really is important to communicate the value of implementing [this],” he said.
It appears there is already plenty of demand for access to electronic data among MGAs. A CLIEDIS survey of insurance distributors showed that nearly two-thirds of those who don’t currently have access to pending data feeds feel they could benefit from that data, Sabatino said.
Distributors could also benefit from better access to in-force data, CLIEDIS’ research shows. Many distribution firms don’t have comprehensive records of the insurance policies that they currently have in force, Sabatino said.
“There’s a huge, huge gap in this industry,” she said.
Without this information, MGAs and advisors are missing out on hefty opportunities to generate sales from within their existing books of business, said Andy Cunningham, vice president of information technology at PPI. He said a key priority for PPI is to get regular, in-force feeds from all of the insurance carriers with which it does business.
“I think it provides a springboard for a number of efficiency gains,” Cunningham said. “I think it starts to open up some doors…in identifying additional revenue streams, so that PPI can sell more, so that the insurance company can sell more, and the agent can sell more.”
CLIEDIS launched the in-force phase of its eData initiative earlier this year, and is currently exploring the issues and potential opportunities involved in electronically transmitting in-force information in a timely manner. Sabatino said many insurers are actively pursuing the development of in-force feeds, as they recognize the importance of having this data.
“There’s a lot of appetite,” she said.
As CLIEDIS continues to move forward with the eData project, Sabatino urges industry members to get involved and provide feedback to ensure its efforts are appropriately reflecting the day-to-day challenges and realities encountered within the industry.
“We need everyone to participate in the process,” she said.
Charlene Faiella, managing partner at Faiella Financial Group and a member of CLIEDIS’ eData operations committee, agreed that it’s important for the industry to work together on this initiative.
“As an industry, we are really behind the eight ball on electronic communication, and that needs to be fixed,” she said. “We have to change the way we’re doing business to remain competitive.”