Most Chief Underwriters tell us that their average cycle time to issue a life insurance policy can be six to eight weeks (or longer). Especially in this digital age where consumers expect fast responses, that’s a long time and cycle time length is a common industry pain point. Add to that the fact that consumers are not well versed in the life insurance underwriting process, the average American will buy more homes in their lifetime than life insurance policies, and there’s a mix for frustration and dissatisfaction.

One of the more painful bottlenecks driving the length in cycle time is the need to manually gather additional information about the proposed insured. Even if an application was diligently completed without error or omission (don’t laugh I’m told it happens), there is still frequently a need to gather additional information. This bottleneck created by manual requirements gathering processes is often assumed to be a necessary evil. In fact, many don’t even perceive that there is a problem to be solved, because they have come to believe “it is what it is.” But does it really need to be?

The Information Gathering Challenge

Let’s take a deeper look at the challenge around information gathering from the perspective of the folks often caught up in the bottleneck.

Underwriter at the carrier and producer level

Not only are they working hard to ensure accurate risk assessment, but they are also balancing many cases in various forms of completeness - likely on average 25 a day.

Whether additional forms must be completed, or just a few bits of information are needed, completion of the underwriting process is put on hold until the additional requirements are gathered, which can take weeks.

Case Manager at the agency/producer level

• Manages the requirements gathering process with the proposed insured.
• Juggles multiple cases, while also be fielding requests for additional information from one or multiple carriers. In a recent exchange with a producer, we were informed that their case managers are expected to interact with a rotating average of 65 cases each and every day!
• Follows a process with several manual steps to:
  Draft a cover letter or email requesting the missing information, locate the proper version of any missing form, highlight any sections of the form needing attention, add sticky notes to emphasize which pages in a multiple page request require action, and package it all up whether in an email, or worse yet, in an envelope for regular mail. Imagine doing this on 2/3 of a 65-case workload every day!

Case-in-point, when calling on a high-volume producer/customer, we could not help but notice a dozen or more U.S. Postal Service bins filled with manila envelopes. Each one represented a request for more information! Imagine the time that was spent putting all those packages together. And what are the odds that each of them would reach the proposed insured, be opened, attended to completely and accurately, and then reposted for the days long journey it would take to arrive back to the case manager. All told adding at least a week and a half to the cycle time of each one of those policies. And since we all know “time is money,” the inefficiencies in this process are costly.

The Consumer

While as an industry we may have come to accept how long this all takes, the proposed insured has not. So not only is this process costly due to inefficiencies, but it can also lead to lost sales. Some applications will fall away as a “not taken” due to frustrations with the system, and then all the prior cost and effort is lost with no revenue to show for it.

Digital technology can help

Getting back to the conversations we often have with Chief Underwriters; rarely do we see a client initiate a conversation about how digital technology can help solve for the information gathering pain point. This is one of those processes I referenced earlier where it is assumed that “it is what it is.” But this is in fact an area where digital technology can help.

A digital tool can be coupled to the carrier and/or producer’s management system to securely automate the requirements gathering process, reducing cycle times. PSG has seen on average requirement transactions completed in just 1.4 days using our tool vs the days or weeks of traditional manual methods.

An effective tool will allow Case Managers to highlight outstanding items on forms, allowing consumers to quickly identify and complete the missing information. Combine it with an imbedded e-signature at no additional cost, and you’ve now got an automated process that greatly improves the customer experience, while improving efficiencies for both the agency and carrier.

When we talk to prospective clients about how they collect requirements today, and explain how a digital tool can help, we often see a light bulb go off. Suddenly something they accepted as a “normal” cost of doing business is reframed as an expensive inefficiency that can be easily and cost effectively addressed. They now have a solution for a problem they didn’t understand could be solved for and was costing them time and money on the majority of cases they wrote.

Paperless Solutions Group eRequirement℠

eRequirement from Paperless Solutions Group an MIB Business, is a unique tool that supports the electronic collection of data in a simple, consolidated fashion, allowing agents and carriers the ability to request necessary requirements, including missing or incomplete forms, additional documents identified through the underwriting process, or even answers to applicant-specific questions through customizable questionnaires. It works regardless of how the original application was submitted (digitally or manually).

To learn more, visit www.paperlessolutions.net or reach out to us at PSGinfo@mib.com.