Electronic Policy Delivery: Let’s Have Our Cake and Eat it Too

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Recently, I attended the annual event of a large broker dealer. It was a spectacle that rivaled any industry event I’ve been to in years. There were easily more than five thousand people in attendance and the venue was filled with outstanding entertainment, speakers and training.

While I was there, I had the rare opportunity to have dinner with some senior level executives at the broker dealer and their carrier partners, along with a half dozen or so of their top advisors. Amidst some jovial conversation and the occasional joke, one of the advisors blurted out, “I’ve got a real problem with you guys.” The table went silent for what seemed to be five minutes until a polite young lady from one of the carriers replied, “Well, let’s see if we can fix that right now.” The advisor went on to say that the carrier and broker dealer have shifted the costs of delivering annuity contracts to his office. Almost immediately another advisor chimed in and asked whether the advisor wanted to be kept in the loop to ensure his client received the contract and the process was completed?

The debate surrounding this topic continued for about a half an hour, where issues like cost, time, compliance and lack of follow-up were all discussed. The waiter must have thought the table needed a little “time out,” as he twice made the rounds filling up wine glasses. The young lady with the carrier sat quietly through the discussion, just listening. As the dessert arrived, she asked the group “what if you could have your cake and eat it, too?” She went on to talk about sending annuity contracts electronically to all the parties in the distribution channel and ultimately the client. “Other industries have adopted eSignature and eDelivery and some have equally as many regulatory issues as ours,” she said. “The cost savings can be immense and the time savings dramatic, all while keeping everyone in the loop…in real time.” This thought seemed to resonate with everyone at the table, as the group pondered how this type of process would help their unique situations.

I can assure you, many similar conversations are taking place daily around the water coolers, dinner meetings and conference rooms today. Electronic policy delivery is a hot topic as more companies are looking to streamline processes, reduce expenses and improve the overall customer experience. So, let’s take a minute to review some of the benefits and metrics around the next evolutionary step in the annuity delivery process.

Stay in The Loop.
Everyone, no matter where you sit within the distribution channel, wants to know where the annuity contract stands once it has been issued for delivery. Has it been sent out, has it been received, has the client completed any necessary outstanding paperwork and has it been sent back to the carrier? Why? Because no one gets paid in the distribution channel until it’s complete. Electronic delivery satisfies this need, because it provides notifications to all necessary people at key points in the cycle. With electronic delivery, everyone is always kept in the loop.

Cost Savings.
There have been a number of studies conducted over the years on how much it costs to deliver insurance policies and annuity contracts. Estimates vary, but the average is around $65 for the carrier, $40 for the broker dealer (if it goes to the broker dealer first or if it has internal compliance forms required) and anywhere from $30 for the advisor if the contract is mailed and up to $200+ if its hand-delivered. This adds up to a lot of coin for the industry, turning into tens of millions annually! Electronic delivery dramatically reduces expenses, in most cases by nearly 85%. How much could that save your company?

Branding and Relationships.
If you’re an advisor who currently has the carrier directly mail the contract to your clients, you’re truly missing out on a golden opportunity to continue your marketing efforts and brand. Once again, it’s a great time to thank your client for doing business with you and promote your services. Most electronic delivery platforms (worth their salt) allow you to add your flavor of thank you letters, marketing materials and possibly even add your own logos to the process. This ensures that you stay out in front of your client during the entire process.

Time.
We’re all pressed for it these days; with so many things that need to be done, there never seems to be enough of it to go around. Time is precious, and when it comes to the delivery process, it’s critical. Each day that goes by brings additional risk. In the paper world, it can take weeks for this process to be completed. Electronic delivery is showing a completed cycle time of less than 48 hours on average.

Compliance.
In some circles “compliance” can be a dirty word, but let’s face it, they play a very important part in ensuring we stay out of trouble. Additional paperwork means there is more likelihood of missing a step. Because an electronic delivery system can be rules driven, it can force specific forms and require signatures throughout the process. This type of platform guarantees compliance requirements are met and provides a detailed history of what took place.

Green Thumb.
Today, consumers are expecting their companies to provide options other than paper. They not only see the benefit of eliminating big binders to hold important documents but see it as a way to reduce the damage associated with printing these documents on our environment. It’s estimated that there are more than 50 million pieces of paper used to print annuity contracts and life insurance policies each year. Electronic delivery can dramatically reduce this number.

It’s time for our industry to finally “have its cake and eat it, too.” Electronic delivery can solve a number of issues within the industry, especially when using paper processes. Each party can reap the benefits of time and cost savings, while providing a positive customer experience. It’s up to us to get organized and implement platforms to make it a reality. For more information on how you can be more involved in steering the direction of electronic delivery, join one of the many working committees in the industry, such as the ones offered by ACORD, LIDMA or the LBTC.


Roy Goodart is the Senior Vice President of Marketing with Aplifi, a leader in developing technology solutions for the insurance and financial industry. Roy has spent the last fifteen years designing systems that drive efficiencies for insurance carriers and distributors, so they can build better selling practices for their producers.

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