From the first day of the launch of a new insurance offer in mid-October, MLC expects to reduce application turnaround times by 70 per cent, and that at least 20 per cent of completed online applications will be approved on the spot.
Since launching a new online quotation system earlier this year, BT has experienced a 60 per cent increase in the use of the new technology by financial planners.
Efficiency gains driven by technology in risk insurance are by no means trivial, and explain why the leading companies are spending tens of millions of dollars between them to develop and maintain sophisticated application and underwriting systems.
Please CLICK HERE to download a PDF of this Special Report Tim Tez, head of product and marketing for AIA Australia, says that in general the reason life companies are investing so much in technology is to keep up with the way clients like to communicate.
“Traditionally, life companies have communicated with their customers in ways that are easiest for them to administer, not necessarily the way the client wants to be communicated to,” Tez says.
“The continual refinement of our systems and technology makes people who want to transact online or who want to use online as a way to manage their affairs, easier. So it all goes to the heart of making it easier for all the life companies to do business with their customer bases.”
In this context, Tez says, “customers” means advisers.
“But by extension, the changes we make also make it easier for customers as well. It improves speed to market, it makes the process more transparent, makes the process easier to follow.
“Another reason is the fact that traditionally it’s been very people-heavy, life insurance, so there’s been armies of underwriters that do a lot of individual assessments of customers, and things like that. The reality is that the vast chunk of middle Australia, who do not have any health issues, or who are quite healthy, can be automated through an underwriting system so they can get outcomes and answers within a matter of minutes rather than days.”
Consistency of process and consistency of experience not only makes the process quicker. Tez says, but “it also means we’re keeping more up to date with the way our customers want us to communicate with them”.
Tez says technology is best used to simplify the interface between life company and adviser, between adviser and client, and between client and underwriter.
“You can institutionalise the complexity,” he says.
“What that means is, it might be as complex as you like internally in the life company, but it’s got to be very, very easy for the adviser and the customer to transact with you.
“So while there may be more grunt at our end, what’s exposed to the adviser, or their user experience, should be simpler and a lot more transparent.”
MLC’s executive general manager of insurance, Duncan West, says the objective of large-scale investments in technology is to improve advisers’ productivity and simply to ensure the company is easy to do business with.
“I think it’s already having a significant impact,” West says.
“I think it will only get more significant. Demand from customers, and from advisers, to make their life easier will be unrelenting.”
West says that the new technology means that “at least 20 per cent of new business will go straight through, with no human hand touching it”.
“From an adviser’s point of view, they can put information in, get a decision there and then, and it’s done and dusted,” he says.
West says the key is using technology – software, or applications, as opposed to hardware – to develop much more sophisticated and robust techniques to process online applications.
It means the relatively straightforward applications are processed with as high a degree of automation as possible, “and leaves the underwriters free to focus on the really complicated cases”.
“Where decisions and judgment is needed, we get those to the right people quickly,” West says. For the adviser, that translates into “more sales and quicker cash flow”, he says. It also means lower expenses.
“It comes back to looking at the process from the customer’s point of view, and we have taken out steps where we did not need them,” West says.
“We have automated steps where they’re required and we’ve looked at processing radically differently from how we have in the past.”
For example, West says, personal statements can now be e-mailed to clients to be filled in and returned to the adviser.
“We’ve built technology that allows them to go through the process in the way that best suits them,” West says.
“There’s numerous ways they can go through this.”
West says building such flexible systems “takes a lot of thinking through”, and costs a lot of money. He says it’s taken two years “from beginning to end”, but declines to say how much it has cost, other than to say “it’s not cheap”.
“We take the view that we are trying to build something, from the application point of view, that has longevity and the ability for regular upgrades,” West says.
“We’ve built it in such a way that will enable us to continue to improve it. The key thing with technology services and products is that you can’t just do it once and then leave it. You’ve got to continue to upgrade.”
