Ken Leibow

The ability to submit annuity applications electronically, or eApp for annuities, is finally gaining momentum in the annuity space. For years life, and property and casualty, insurance carriers have saturated the market with multiple options to submit business online. The annuity space, however, seemed to be in a holding pattern from 2007-2015, in which eApp was mostly available solely to financial advisors selling variable products for big wirehouses. During that time, over 90 percent of annuity applications were submitted via paper filled out manually by an agent or financial advisor—an increasingly antiquated and time-consuming process for all involved.

Today, fixed SPDA and index annuity products are being added to eApp platforms, and eApp for annuities is being offered through other distribution channels such as independent brokerage agencies, banks and independent broker dealers. With the advent of integrated sales platforms, DOL and other connected services, the benefits of eApp for annuities to agents and financial advisors has grown significantly.

What is AOE and what does an eApp platform for Annuities do?
Application Order Entry (AOE) is a method of completing an annuity application online using an eApp platform. The agent or financial advisor logs into an agent online portal or accesses the eApp directly from a vendor or brokerage website. Logging into an agent portal allows agents a single entry for access to all sales tools available to them, including eApp.

There are multi-carrier and single-carrier eApp platforms available. In most cases an agent chooses the carrier’s product and state, and a licensing check automatically verifies the agent’s status to sell the product. The agent can then quickly walk through questions on the screen that are from the annuity application and supplemental forms such as replacements and 1035 forms. Other required fields and validation checks ensure the application is completed in good order. All forms are either eSigned or printed and wet-signed. By using eApp through an agent portal, completing an application is a quick and easy process.

The benefit of completing an eApp versus a fillable form is that all the product rules are programmed into the eApp, such as minimum and maximum issue ages, min and max premium amounts, and product state approvals—just to name a few. Also, integrated processes are tied into an eApp for annuities, such as compliance routing for review and approval, quoting, premium automatic transfers, netting commissions and DOL workflow. The data is submitted automatically to the carrier’s policy administration system to quickly issue the annuity policy and pay commissions.

Benefits of Annuity eApp

• Annuity application submitted in good order.
• Commissions paid faster.
• Faster and better experience for the client. 
• eSign annuity applications (don’t have to chase down signatures).
• DOL, compliance and suitability integrated workflow.
• Integration with CRMs, illustrations and annuity market research sales tools.
• Automate 1035 exchanges.
• Automate brokerage account premium transfers.
• Straight-through processing with ePolicy delivery.
• Sub-pays on flexible annuity products.
• Automate brokerage-specific forms.

What eApp platforms are available?
Here are three notable annuity eApp platforms on the market today (listed alphabetically):

• AFFIRM for Annuities from iPipeline has 30-plus carriers and 30-plus distributors. However, with its recent acquisition of Laser App, iPipeline is expanding its annuity distributor client base significantly with $25 billion of annuity premium annually and 200,000 annual transactions. AFFIRM for Annuities supports over 3,400 unique variable, fixed and index annuity products. In 2017, AFFIRM for Annuities reported 100,000 unique financial advisors using the platform.
• AnnuityNet by Ebix is a multi- and single-carrier eApp platform that supports over 1,800 fixed, index and variable products for 50-plus carriers, over 250-plus distributors and 200,000-plus users. AnnuityNet processed over $40 billion dollars of annuity premium in 2017. AnnuityNet does integrate with SmartOffice CRM and VitalSales Suite.
• FireLight® by Insurance Technologies is a multi-carrier platform  with 40-plus carriers and over 60 distributor clients representing over 150,000 producers. FireLight supports multiple lines of business including annuity, life, LTCI, DI and mutual funds, and supports all product types on a single platform. FireLight® provides carriers and distribution self-managing tools, and includes the key features producers and firms need to manage a compliant fully-digital eApp process.  

AFFIRM for Annuities and AnnuityNet were introduced to the market in the 2005-2006 time frame. Their initial customers were wirehouses selling variable products. They have since expanded the annuity products offered on their platform and expanded distribution. AFFIRM for Annuities and AnnuityNet have features like routing for compliance review and approval, supporting specific brokerage forms, tied-in DTCC services for paying premium from brokerage accounts automatically, netting commissions, and includes subsequent premium payments for flexible premium deferred annuity products. These are just a few of the key features offered. FireLight® was introduced to the market in 2010 and offers similar features. FireLight® is maximized to work on a mobile device, has offline capabilities and has built-in eSignature at no additional cost. Ninety-eight percent of all annuity applications submitted on FireLight® are eSigned.  

What is new for eApp for Annuities?
Carriers are also developing homegrown eApp platforms for annuities similar to life insurance platforms in the past. In January 2018, Colorado Bankers Life Insurance Company® (CBLife) launched its GB QuickApp, which includes its new MYGA 3-5-7 annuity product and is being used by IMO and BGA agents through the secure CBLife Agent Portal. An agent can run an illustration and it is integrated into GB QuickApp. The CBLife annuity application is eSigned and submitted electronically directly to the carrier. Added functionality such as a professional agent training video and tablet optimization makes GB QuickApp very fast and easy to use for agents. 

One of CBLife’s IMO partners recently said, “eApps in the annuity space are a win for all…business is cleaner with less NIGOs, faster for policy issue and delivery to the policyholder, and faster commission pay for the advisor/agent.”

Later this year, CBLife will also offer ePolicy delivery for annuities. Coupled with GB QuickApp, ePolicy delivery will give agents a true straight-through process for Annuities.

Additionally, tools including Client Relationship Management systems (CRM), illustrations, annuity market research and others seamlessly integrate with eApp platforms for annuities. AnnuityRateWatch (ARW) for example offers product feeds for FIA/MYGA/Fixed/SPIA and income rider, quotes for the majority of the independent, bank and broker dealer distribution channels. ARW feeds will soon be launching directly into Ebix’s AnnuityNet system.

Beacon Research is a recognized leader in quality annuity data that provides product and sales information on fixed rate, indexed and variable annuity products. Beacon Research’s AnnuityNexusTM tool provides back office research and annuity comparisons to support advisors, and can be directly or indirectly accessed from an agent dashboard with eApp. 

The importance of Annuity Process and Industry Standards organizations
Behind the scenes of the eApp for annuities are standard organizations such as ACORD and the Insured Retirement Institute (IRI) that play an important role for compliance, workflow and ease of doing business for an agent and financial advisor when selling annuities. ACORD is known for data standards and creating standard insurance transactions, and has developed a Product Profile for Annuities (PPFA) standard, which allows a carrier to easily set up product rules and load them into multiple eApp platforms. Agents benefit from speed-to-market when annuity product changes are implemented or a carrier launches a new annuity product. IRI is known for its annuity education and government affairs for regulatory purposes; however, the organization has also developed industry Annuity Straight Through Process workflow. IRI working groups’ members include carriers, vendors and distributors who are expert in creating an automated process for annuities that eApp is plugged into.

Agent Adoption of eApp for Annuity will take a Significant Leap Forward in the Next 18 Months
The benefits of eApp are increased offerings to more distribution channels and the addition of more annuity products (fixed and index) to generate usage. Expanded availability combined with a mobile strategy that allows agents to quickly submit applications using eSign and paying agents’ commissions faster will drive the growth of eApp for annuities. And in case those factors don’t speed up adoption, carriers and distributors are offering agents incentives such as cash bonuses to use eApp.

The life insurance industry is usually lagging and playing catch-up with technology. There are many reasons for the lag such as costs, compliance and adoption. The Life Brokerage Technology Committee (LBTC) has made it a priority to research and educate BGAs on emerging technologies. In the last two years, there have been some growing tech trends like accelerated underwriting, ePolicy Delivery, mobile apps for life insurance sales and marketing just to name a few. Today we will introduce you to two significant new technologies that are game changers!

You will first learn about Chatbots, which offer agents the ability to quote, field underwrite, get marketing information, and apply for insurance using plain conversation on a messaging app or voice assistant. We will then update you on Blockchain. In the last few years, you probably have come across a news story about Blockchain as it relates to Bitcoin, however Blockchain will affect the life insurance industry resulting in a monumental shift in the way sales, licensing, new business, underwriting, agent commissions and claims are processed. Blockchain is an industry disrupter; however, it will positively impact BGAs and agents.

What Is A Chatbot?
A chatbot is an automated, artificial intelligence system/program that responds to speech or text input. It can be used to help you find answers, help you with tasks or organization, and it can even be used for entertainment. A simple example of this interaction is when you ask your phone’s AI about the weather. Rather than looking for the information online or through an app yourself, it will find the details and provide them to you immediately through speech and text. Chatbots are used on messaging apps and voice assistants. Text messaging, Facebook messenger, and Skype are some of the more popular messaging apps. Google Assistant and Microsoft Cortana are examples of voice assistants. Other popular ways people use chatbots are for news, creating a grocery list, personal finances, scheduling, and even friendship. Chatbots are used widely for customer support or by businesses on their websites to interact with their customers; this website might shed some light on how such a bot is made – https://botpress.io/learn/how-to. Amazon Echo (Alexa) for example, is a voice assistant with a chatbot that does tasks you request and answers questions. The artificial intelligence in the chatbot learns how you ask for information and gets smarter the more you use it. Chatbots have personalities, designed so that the conversation experience drives more engagement. The learning curve is easy because there are over 1 billion users of Facebook messenger alone for example covering all age groups. Millennials are only interested in using chat to communicate and for getting their information. This means that more than likely agents are already engaging in chat with a messenger app for personal and business purposes.

How Will Agents Use A Chatbot To Sell Life Insurance?
When an agent runs a term insurance quote for example, they may use a mobile app or run it from a BGA’s website. If the agent needed to look up underwriting guidelines like height and weight, blood pressure, cholesterol, and tobacco use, or a malady like diabetes, then the agent would look for the information in the carrier’s underwriting guidelines in a PDF or use a field underwriting software program. The same thing applies for looking up information on a life product such as issue ages or conversion options. A chatbot is an agent’s one stop resource to have all the information he/she needs right at their fingertips.

Scenario: Agent opens-up a chatbot using a voice assistant on his/her smartphone. The agent says, “I need a quote for a 45 year old male nonsmoker for $500,000 preferred.” Instantly the annual and monthly premiums for 10, 15 and 20 year term pops up on the screen. The client tells the agent he has high blood pressure. The agent then says to the chatbot, “blood pressure is 120/90.” The voice assistant shows on the screen and verbally says, “For blood pressure 120/90 the risk class is standard plus.” The agent then says to the chatbot, “Change the risk class to standard plus.” A revised quote appears instantly on the screen. The agent can then apply for the insurance submitting the business through a term ticket like ApplicInt’s ExpressComplete right from the same chatbot.

Impact Technologies Group, Inc., has a series of chatbots for insurance called InsureBots^TM . They are used for life insurance quoting, field underwriting, annuities, long term care, marketing and agent recruiting. There are reinsurers creating underwriting chatbots. Carriers are starting to develop internally their own chatbots for marketing. The P&C insurance world is exploding with chatbots using them as a claims advisor for example. Agents who sell insurance utilizing their website will see affordable solutions for a Web-bot that will quickly and easily educate the client answering common questions, providing media like YouTube videos, and then moving the client to a quote and a pathway to apply for insurance. The consumer experience will be much smoother and engaging using a chatbot, helping the agent generate more business.

What Is Blockchain?
Blockchain is an algorithm and distributed data structure for managing electronic cash without a central administrator among users. Originally designed for the crypto-currency Bitcoin, the blockchain architecture was driven by a radical idea of a currency exchange system without any middleman, bank, country, or any other macro-environmental factors. This process of exchanging online money has become more and more popular recently with people looking towards trading apps like this – https://bitcoinrevolution.cloud/nl/. There are now a number of uses for Bitcoins, including purchasing some products from Amazon or topping up Microsoft accounts. However, some people prefer to keep their online money in a cryptocurrency wallet to invest it later. People planning on saving their online money want might to consider reading some digital asset custody solutions to keep their cryptocurrency secure.

In order to better understand blockchain technology, it makes sense to first consider the “Internet.” It enabled a free, fast, and global exchange of information and ideas. The blockchain adds another dimension by making it possible to transfer and exchange value (and assets) without the involvement of intermediaries. Blockchain technology can also be used to store personal and other information in an accessible, but secure, environment.

How Does Blockchain Work?
Blockchain, also known as a Distributed Ledger Technology (DLT), was invented to support the Bitcoin cryptocurrency (Internet money). Bitcoin was motivated by an extreme rejection of government-guaranteed money and bank-controlled payments. The developer of Bitcoin, Satoshi Nakamoto, envisioned people spending money without friction, intermediaries, regulation or the need to know or trust other parties. The success of Bitcoin led to the emergence of many other cryptocurrencies such as Ethereum – those looking to manage their digital assets can Buy Ethereum Zipmex using their specially designed exchange platform.

How Can Blockchain Impact The Life Insurance Industry?
Imagine a world in the insurance industry where life insurance agents don’t have segregated sales and marketing, product, underwriting, new business submissions, policy servicing, claims management, and commissions systems and departments to deal with on a consistent basis. They can access, track, and transact every facet of a life of a policy (case) from inception to service within block(s) of a chain securely.

The basic principle that blockchain provides is decentralized storage of the data. Currently, at an insurer, this data is stored on a centralized network. In many cases, there are multiple databases/departments that are managing these transactions between the agent/brokers, BGAs, and the carriers. At times, the information is either disjointed or incomplete regarding customers and their transactions. Blockchain solves this problem for the life insurance industry by aggregating all the transactional, static and changed information, as well as all the data. It is processed and stored decentralized, un-editable, unidentifiable and securely.

One of the more disruptive applications of blockchain is the development of “Smart Contracts” models. Smart contracts contain self-executing protocols that work with a blockchain to enforce the performance of a contract across all counterparties. This can help with automating the verification of coverage and streamline claim settlements to improve operational efficiency and hence minimize cost.

Here are some other great benefits of blockchain that will impact agents directly:

• Fraud Reduction: With blockchain technology, tampered documents or false billings are almost impossible to process since the data is immutable and decentralized. This will also reduce the amount of erroneous claim payments.
• Policy Purchase and Underwriting Process: Policy issue process can be designed via a blockchain to create a combination of data providers, health exchanges, and insurers. Underwriting process can be expedited by obtaining the required information from health exchanges and data providers to expedite the underwriting and new business process with minimal customer effort.
• Management of Agent Contracts: Blockchain can be used to instantly verify agent licensing, contracts and setup a notification system to alert agents and issue commission checks when the policy is signed.

The impending future of the life insurance industry could strengthen through an intelligent adoption of blockchain. Large insurers have the predicted possibility to greatly benefit from the many applications in digital currencies, fraud solutions and smart contracts. But the process of implementing blockchain will come with necessary tweaks to the underwriting processes and structures of policies, as well as risk underwriting. Essentially, Blockchain reduces premiums collected by large insurance companies by allowing for cheaper and more consumer oriented products to be developed. Ideally, cooperation between blockchain startups, carriers, brokers, reinsurers and other segments of the insurance industry would lead to optimal efficiency, but those segments will be subject to disruption and may not follow suit. LIMRA’s recent announcement that is has established an advisory council to explore opportunities in the life insurance and retirement sectors to use blockchain distributed ledger technology is a good sign. It is indicative of our industry seeking the practical and collaborative solutions to use the blockchain technology in the right manner.

References for Blockchain:

1. Financial Times article; Technology: Banks seek the key to blockchain: https://www.ft.com/content/eb1f8256-7b4b-11e5-a1fe-567b37f80b64 – retrieved on August 24th, 2017.
2. Cognizant; White Paper; Blockchain: A Potential Game-Changer for Life Insurance: https://www.cognizant.com/whitepapers/blockchain-a-potential-game-changer-for-life-insurance-codex2484.pdf – retrieved on August 26th, 2017.
3. Team Brella; White Paper: https://teambrella.com/WhitePaper.pdf – retrieved on Aug 20th, 2017.
4. Online article: https://medium.com/startup-grind/3-reasons-why-the-blockchain-revolution-is-finally-becoming-a-reality-63bdd90c89e2 – retrieved on August 27th, 2017.

The life insurance and annuity sales and new business process has gone through technical changes this year. What’s trending? More carriers are rolling out accelerated underwriting, which significantly simplifies and speeds up the life new business submission and issue process. Moving your agency’s technology to the “Cloud” is a best practice not just for data security, but it will also save you money and help place more business. You may also want to make use of Servere VPN services since your business is undergoing its digital transformation, keeping everything encrypted and secure. The new DOL fiduciary ruling is impacting how products using qualified money are being sold resulting in agents and agencies needing specific financial planning sales tools to satisfy the best of interest contract requirements (BIC).

Accelerated Underwriting
Several carriers this year have launched accelerated underwriting programs allowing the insurance company to underwrite and approve a life insurance application without an exam or lab work. Principal Financial Group first launched accelerated underwriting to BGAs more than a year ago. Now several carriers like Banner Life/Legal & General America and SBLI have accelerated underwriting programs as well as others. In the next 12-18 months, the trend is that at least 75 percent of brokerage life insurance companies will have some type of accelerated underwriting automation. “We have to be smarter in the way we process business. As an agency with a high touch’ value proposition, we found that we needed to identify ways to cut down processing time and costs. Every time a case manager in our agency touches a case, we discovered it costs us $35 per touch. You can easily do the math, and realize that a $1000 premium would be a loss for us if we don’t process it more efficiently,” explained Lynne Rosenberg, president of Innovative Solutions Insurance Services, LLC, El Segundo, CA.

Technology is the foundation of the accelerated underwriting process. Carriers use their proprietary eApp/drop ticket platforms, or to gain more adoption plug into multi-carrier platforms like iPipeline’s IGO and Applicint’s ExpressComplete. The accelerated underwriting process automatically pulls the client’s MVR, MIB and RX reports by first getting an electronic authorization from the client. eDelivery makes it a complete straight through process using a carrier’s ePolicy system or multi-carrier eDelivery system like iPipeline’s DocFast. Voice and eSignature play a significant role in specific steps in the process. Vendors like DocuSign not only authenticate the signer but also utilize their workflow platform in the process. “Lincoln’s new TermAccel program is the next step with straight through processing. The ticket is dropped through an electronic platform on Lincoln’s website, iPipeline’s iGo platform, or a link on the BGA’s own website. Upon approval the policy is issued electronically and delivered electronically, thus providing us the opportunity to place cases faster,” noted Rosenberg.

“We offer a multi-carrier platform allowing our brokers to run term quotes and submit an electronic drop ticket with the top carriers in the term market. We increased the number of drop ticket submissions from 20 percent to 50 percent by requiring term applications with a premium under $500 be submitted electronically. Drop ticket is an easier process for brokers to submit an application as it creates an in good order’ application, provides a more detailed medical history, and allows our brokers to work on selling rather than administrative work,” explained Carolyn Sampson, senior vice president, National Benefit Corp., Des Moines, IA. This new evolution in the eApp/drop ticket process dramatically speeds up cycle time using accelerated underwriting, which translates to placing much more business. Sampson exclaimed, “The introduction of accelerated/lab-free underwriting this year is taking the drop ticket one step further. Carriers are using a personal history phone interview, running a prescription database check, pulling the MVR and checking MIB codes to underwrite the application. We have had great success with clients ages 20-40, in good health, applying for under $1,000,000 death benefit. I am most excited about our ability to reduce the time it takes to issue a life insurance policy from 30 days to less than seven days!”

Cloud
Saving money and securing your data is what an agency should be focused on when moving to the Cloud. Let’s start with reducing your agency’s expenses. Most of your vendors are offering access to software online as Software as a Service (SAAS). You should be asking, “What’s your footprint?” It is important to know if the software vendor is using Platform as a Service (PAAS) and Infrastructure as a Service (IAAS). The benefit for the vendor of using PAAS and IAAS is that they have incremental costs regarding hardware and hosting software compared to a high fixed cost doing it in-house. The savings of the incremental cost can be significant, which is passed down to the customer.

New Cloud services are being launched and used by life insurance companies and BGAs. Many businesses use cloud-based applications like EZLease when it comes to lease accounting and helping to improve their workload in financial matters. SuranceBay is developing an agency management system (SureAMS) hosted on a privately held Cloud. What’s new about SuranceBay’s AMS is that it will be fully integrated into their licensing system (SureLC), which is widely used by BGAs today. The new AMS by SuranceBay will also be integrated into their eApp system (SureNB). A good example of another “new” service that was born in the Cloud is PaperClip’s Mojo. The benefit of a cloud service like Mojo is that if an agent sent in a paper life insurance application instead of using eApp or drop ticket, then the BGA can scan the life app into Mojo. This would essentially turn the handwritten app into data to be used as an app upload to the carrier as well as automatically creating a case in the BGA’s agency management system. The service itself is affordable because it is Cloud-based and provides savings because it reduces a case manager’s data input time by more than two hours per day. Companies also have the option of availing various consulting services (like GCP consulting services) from IT companies, which might help them get a clearer idea of how Cloud data services can elevate their productivity by personalizing their service for that particular organization. Moreover, an increased number of businesses will get placed because of faster cycle time on par with an eApp providing the quicker processing time compared to manually typing in the life insurance application. Faster cycle time using data versus paper increases placement ratio on average of up to eight percent to the bottom line according to studies by the Life Brokerage Technology Committee (LBTC).

BGAs should be using a Cloud data service to store their data. Cloud data services have physical security that keeps their machines in a secured location with security cameras at facilities located away from cities and other risky places. The machine’s operating system and software security are kept up to date. Your data is securely accessed remotely from any location. BGAs should have platforms in the Cloud so that they can continue their business with minimal interruption in the case of a natural disaster for example. “Four Seasons has taken the approach that even if disaster hits locally, our customers in other parts of the country expect us continue operations! By taking a cloud-based approach, we keep our core functions active even from remote locations, thus assuring our customers they can depend on us to be there when they need us,” explained Joann Mattson, FLMI, AALU, vice president, administrative solutions, Four Seasons Financial Group, Marlton, NJ. Agencies also need to have a data security policy, which includes Cloud data storage. “Obviously, security policies have been updated to take new technology into account. These days, we’re more concerned with email encryption and firewall protection versus locked file cabinets. But agencies must be mindful that their security policies are not static documents. These policies must be reviewed at least annually to assure they comply with current regulation as well as technology enhancements/changes,” stressed Mattson.

DOL
If your agent:

Recommends funding an annuity using qualified funds;

Recommends using qualified funds for life insurance premiums; or

Recommends a rollover from a qualified retirement account.

Then you must be able to show that the product/strategy recommended is in the client’s best interest and will improve their situation. It may also be necessary to complete the Best Interest Contract in cases where the Best Interest Contract Exemption does not apply (i.e. If you receive variable compensation for a product sale). In addition to any enforcement action taken by regulators or internal compliance, many experts believe the DOL fiduciary rule will make it easier for individual investors to prove wrongdoing in court/arbitration. For this reason, it will also be very important to document the information used as the basis for your recommendations. If an agent is using an annuity research and comparison tool like Ebix’s Vital Annuity, then the BGA should encourage the agent to save and store their reports. Vendors like Ebix are making the storage of quotes easy by integrating it into the agent’s CRM like Ebix’s SmartOffice. Whether the report or quote was generated in a BGA’s back office or by the agent at point of sale, the best practice for DOL is to save the PDF and store it where it can be accessed easily to verify what was presented to the client.

Life insurance agents and financial advisors need to take a comprehensive look at the client’s overall financial situation (retirement accounts, savings, expenses, taxes) to determine the best course of action. Compare the client’s “current” and “proposed” situation to illustrate the basis for the agent’s recommendations. Best practices would include tools that have business rules that can be customized to fit a specific planning methodology to ensure consistency in the product recommendations. Saving cases locally, CRM integration and/or automatically uploading a client’s cases to a BGA, broker/dealer or carrier database for record keeping purposes are critical best practices for DOL. Impact Technologies Group’s (Impact ) PlanFacts financial planning sales tools for example are being used to satisfy the best of interest contract requirements with features like comparing a client or couple’s current financial situation to a scenario proposing life insurance and annuities. Impact’s PlanFacts can also be implemented for DOL to offer product recommendations based on best interest rules. Below are key features that planning tools need to have in order to satisfy DOL best of interest requirements (BIC).

Financial Planning Needs Analysis Planning Tools – Key Features for DOL
Compare current financial situation to a scenario with proposed life insurance and annuities.

Compare scenarios using different hypothetical rate of investment returns.

Compare using qualified money versus after-tax money to fund life insurance.

Illustrate using life insurance to pay for Roth conversion following death of first spouse.

Compare current financial situation to a scenario with proposed life insurance, annuities.

Save locally and/or upload of client cases to company database for record keeping purposes.

Business rules customized to fit your methodology.

Monte Carlo simulation.

Automatically generate BICE contract, disclosures, etc.

CRM integration.

There are three agency best practice takeaways:

1. Place more business by directing your agents to sell products and submit business on eApp platforms that are plugged into an accelerated underwriting process.

2. Save money by moving your agency to the Cloud and making sure your vendor’s platforms are based in the Cloud.

3. Provide financial planning sales tools that offer the necessary functionality to help those agents and advisors who are fiduciaries under the new DOL ruling with their best of interest requirements.

The responsibility of insurance professionals is clear-advise clients to make decisions based on their own circumstances and means. Agents have a responsibility to share their knowledge of a complex and evolving industry with their clients, and the tools they use are critical to making their clients feel comfortable with the sales process.

Agents have access to a vast array of technology tools: some of these tools work well-others not so well. The critical path is to understand the pain points and leverage new technologies to help agents be successful.

Life Insurance and Annuity Form Tools are a Big Success!
The life insurance and annuity industries have mastered forms repository tools for packaging forms for new business, licensing/contracting and in-force services. This is true both for single carrier producer portals and multi-carrier form tools hosted on a brokerage general agency’s website. These form tools are easy to navigate, packaging forms by state, product and business need.

Some platforms have intelligent forms with rules and even eSignature functionality. The forms in the package are fillable and easily emailed or printed. Vendors such as iPipeline, LaserApp Software and Paperless Solutions Group offer multi-carrier form tools. Most carriers offer forms on their producer portals. Online accessibility to forms has grown significantly since being introduced over 15 years ago-online forms are literally everywhere.

Struggles with eApp
For life insurance, annuities and long term care insurance (LTCI), adoption of submitting new business electronically using eApp has lagged.

For annuities, the annuity order entry (AOE) platforms became available to large wire houses and broker/dealers in 2006. Today, fixed annuities and index annuities are the production leaders for the independent broker/dealer and brokerage general agency (BGA) distribution channels, but AOE tools generally have been too complex and expensive for these distribution channels to use. In the last 18 months, longstanding AOE vendors have been trying to penetrate these markets with simplified and more cost effective versions of their AOE tools. New vendors have entered the space. Carrier portal or multi-carrier AOE solutions have not moved the needle yet, and agents are using paper to submit most of their annuity applications.

In the life insurance space, drop tickets for term life insurance have been successful because of the simplicity, market awareness and carrier mandates. On the other hand, eApp for life insurance has struggled, primarily because it is inconsistently available across life insurance carriers and products, as well as the fact that most eApp solutions do not offer an automated way for an agent to order a paramed exam. In addition, vendors do not push the life insurance application data to the BGA’s agency management system. Consequently, when an agent is confronted in a multi-carrier experience with options from forms to drop tickets to eApp depending on the carrier and product, confusion results. Until there is consistency in the agent experience and more critical features are added to help promote life eApp, it may continue to lag behind paper applications and drop tickets.

LTCI differs from life insurance and annuities in that there are far fewer carriers offering the product. There is no multi-carrier platform available. Many LTCI carriers have proprietary eApp platforms, resulting in the need for more standardization in the agent’s experience as suggested by feedback from the Intercompany Long Term Care Insurance (ILTCI) conference in March, 2015. LTCI eApp adoption remains relatively low.

Mobile Apps
According to LIMRA, the average age of an insurance agent is 551. In 2013, the Pew Research Center released figures on internet usage. Internet usage was increasing-98 percent of adults under 35 years were going online, with the largest increases in usage coming from three age groups: 25-34 (98 percent, up from 92 percent in 2012), 45-54 (91 percent, up from 84 percent), and, most notably, 65+ (60 percent going online). You can also find more up to date and different internet usage facts using this source here or similar online material regarding internet stats.

The smartphone and tablet usage numbers in 2014 are staggering. In 2015, 57 percent of users across all age groups do online banking with their smartphones per the Pew Research Center. This trend tells us that over the next five years more agents may be carrying smartphones and tablets than laptops and writing pads.

Several carriers today offer the agent mobile apps for quoting and product information. The agent can browse marketing resources for the latest sales ideas, flyers, brochures, product guides, presentations and videos. Some BGAs offer agents mobile apps focused on life insurance, including multi-carrier term life insurance quoting and drop ticket, universal life (UL) insurance quote request, pending case status, exam ordering and product news from multiple carriers.

On the annuity side, the BGAs often include a multi-carrier rate information tool for fixed and indexed annuities in their mobile apps. In addition, website tools are being optimized to work on tablets such as an iPad.

The need for mobile apps is growing as more people move to mobile devices and away from websites. Moreover, as you can tell from some of the apps that are available on the Fileproto website, this trend is showing no signs of slowing down and it will therefore be intriguing to see what else the future holds for this revolutionary use of software. Rita Northen, director of Global Insurance Solutions Group, explains why agents might prefer the simplicity and ease offered by mobile apps: “One of the biggest technology challenges we face as a BGA is the proliferation of carrier-specific platforms that do not serve the ultimate goal of technology: to make our jobs easier,” said Northen. “Agents deal with numerous carriers on a daily basis and are resistant to spending the time and effort required to learn multiple processes that basically perform the same function for different carriers.” Northen added, “On a more positive note, I am excited to learn more about a new customizable mobile app called MobileBGA, which is designed to provide agents with the essential marketing tools to close the deal when out on client appointments. I believe that carriers, BGA’s and vendors should focus our efforts at innovation that will simplify, rather than complicate, our important mission of selling insurance.”

Other Agent Tools like Sales Illustrations and Email Security
Tony Kravitz, president of New Generations Insurance Marketing, Inc., has found some technology tools that are working for his agents, and some that are just starting to get traction.

“The obvious things working for agents in technology are online forms and illustrations,” says Kravitz. “They have been around for a while and have been ingrained as part of the business model.” Kravitz adds: “Email security is beginning to catch on with agents. We are beginning to see more agents concerned about sending and receiving securely. Many have started using encryption software and quite a few are starting to upload documents directly to us through links on our website and in our emails.

“We have started seeing client relationship management (CRM) systems becoming more popular with agents. We have even started offering to supply one for them as a value-add from our agency.

“I wish I could say that on-line applications were a hit, but it has been a struggle to get many agents to submit applications that way. However, we are starting to see an uptick in online use of drop ticket applications. This has been especially true where the agent can submit a ticket for multiple carriers through a single interface. I expect to see a lot of growth in these platforms in the next couple of years. It makes it easier for the agents that are less experienced in life insurance, such as property and casualty producers and health insurance agents.

“While we have not yet seen many agents using mobile apps as a primary focal point for their business, I believe that will change as we tie more functionality into those applications. If an agent can get information, run a quote for multiple carriers and start a drop ticket–all from a mobile application-I feel adoption will increase dramatically.”

Summary
Insurance technology tools for agents are plentiful and developmentally varied-some have peaked, others have become obsolete, while still others are just getting started. Now is the perfect time to investigate which insurance technology tools are working and which ones are not. It is important to implement best practices for agent insurance technology solutions.

As we look into the future, what opportunities and trends should grab our attention? Mobile apps are certainly a key trend and a place where agencies, carriers, and vendors should focus their investments.

Footnote:

1. 2015 LIMRA Life Insurance Conference

In the last decade and a half, agents have grown to depend on brokerage general agency (BGA) and carrier websites for tools to help with sales, marketing, licensing, underwriting, commissions and status of their pending business. With the surge of mobile devices such as smart phones and tablets, BGAs and carriers have also started to create mobile apps for agents to use on the road. Today, insurance technology tools require flexibility, scalability, speed, simplicity, easy access and mobility in order to be considered best practices.

Mobile Best Practices

From an insurance technology standpoint, mobile apps are the fastest growing agent solution. BGAs are creating their own IOS and Android apps, putting the BGA’s store in the agent’s mall (smart phone and tablet). Typically, tools most commonly seen in a BGA’s mobile app are focused on life insurance. They include multicarrier term life insurance quoting and drop ticket, universal life insurance (UL) quote requests, pending case status, exam ordering and product news from multiple carriers. On the annuity side, the BGAs often include a multicarrier rate insurance tool for fixed and indexed annuities in their mobile apps. In addition, website tools are being optimized to work on tablets such as an iPad.

Several carriers today offer the agent mobile apps for quoting and product information. A best practice for agents is to provide client marketing material, needs analysis tools, and point-of-sale tools such as simulators for linked benefit products. Sales concepts are extremely popular with agents. The agent can browse marketing resources for the latest sales ideas, flyers, brochures, product guides, presentations and videos—Transamerica’s LifeSales iPad app and Genworth’s The Index Institute for mobile are good examples.

Big Data for Agents and

Pending Case Status Best Practices

Agents are always looking for high quality leads. The advancement in data mining using business intelligence tools has created an opportunity to provide an agent new sales from term life insurance conversions, as well as from cross selling other products to existing clients. Predictive modeling and underwriting can also match new prospects with insurance products, which is how Amazon and Google generate business.

The success of new business eSubmission tools depends on the quality of the communication of the status of the case. A best practice is to provide the agent with real time status to help get a case through underwriting and issued as quickly as possible. Faster cycle time drives the placement of more business, putting more commissions in the agent’s pocket. With all the models available for submitting life and long term care insurance business, real time, easy-to-read pending case status, coupled with multiple status delivery methods offered by both the carrier and BGA to the agent, is critical.

NFP, for example, has been innovative in both big data and pending case status feeds for their agents. Adnan Raja, MSPM, PMP, vice president of field technology solutions, said:

“At NFP, we are currently focused on big data and pending case feeds. Many vendors and companies have tried to consolidate pending case feeds from the carriers, but it is challenging to unify the data from different carrier feeds, analyze the information and define actionable steps. Case managers have a hard time deciphering what’s actionable and what’s not from these disparate data sets, which in turn makes the feeds virtually unusable.

“NFP approaches the problem by normalizing the carrier feeds—while keeping the original messaging from the carrier intact—to deduce actionable steps. We can then consolidate the data in a way that is easy to use and understand and provide an intuitive portal for our membership.

“This ties into big data, another key initiative for most industries these days, including insurance. NFP uses visual analytics tools to help our brokers mine their existing book of business to generate additional leads and opportunities. Tapping into big data in a meaningful way is high on our list of best practices, because doing so helps brokers to better support their existing clientele and build stronger long term relationships.”

Life Insurance: Quoting,

eSubmission and eDelivery

Most BGAs today have a multicarrier quoting tool for agents to use on their website for term life insurance. A best practice is for the agent to have a quick transition from a quote to a drop ticket. The drop ticket is sent to a fulfillment center where the application is completed via a tele-interview and the exam is scheduled. During this fulfillment process, a best practice is to offer the client multiple signing capabilities, such as voice signature and e-signature, as long as the interview does not exceed 30 minutes. One size does not fit all. In fact, many BGAs also have posted on their websites, alongside the multicarrier quoting tool, carrier-specific tools, because many agents prefer a specific carrier’s products and services, such as Genworth’s Life Quick Request or Legal and General’s AppAssist. You will see buttons that link to these quoting/drop ticket solutions on the main page of the BGA’s website. Some agents also access these tools from a secure carrier website for producers.

While drop tickets are popular with agents for term life insurance, permanent life products such as index universal life illustrations are run by the BGA more than 80 percent of the time. Several BGAs do have a fillable online form for the agent to complete for a UL quote request; however, these illustration requests are predominantly handled via telephone. The trend is growing for the BGA to email the agent a link to access the illustration and then be able to seamlessly pass into a drop ticket process or an eApp process. This technology allows BGAs to help their agents submit more “in good order” business, which is typically processed faster, resulting in higher placement rates. This process is also being leveraged for linked benefit products. The adoption growth will depend on the agent’s experience, ease of use and market awareness.

Tying together the end-to-end process for life insurance is ePolicy delivery. eDelivery gets the policy in the client’s hands quickly, allows the client to e-sign the delivery requirements, and automates the payment of premium due all in one simple online experience. Cycle time is up to 70 percent faster and up to 5 percent more business is placed, which positively impacts the agent’s bottom line.

Annuity and Long Term Care

Best Practices

Agents are looking for quick access to annuity product information. Most BGAs have a multicarrier spreadsheet that details product information, including state approvals, qualified and nonqualified deposit amounts, interest rate, surrender charges and bonus rates. There are some search engine tools available, but most popular is the spreadsheet format. Agents are also looking for a multicarrier forms repository so that they can get easy access to annuity application packages with a search function for state-specific forms.

What’s new is the access to an annuity order entry (AOE) platform that has all of the product rules built in, an e-signature option, as well as data input with auto-populating the annuity application forms. Financial advisors predominantly use these AOE tools provided by their broker/dealer. They typically focus on variable annuity products. The cost for a BGA to deploy an AOE tool had been too expensive. Vendors are now scaling back the functionality to fit the independent agent for fixed and indexed annuity products, and making it more affordable to deploy. Agents will now have AOE available to simplify and accelerate the annuity submission process.

The long term care insurance (LTCI) market is evolving with alternative products and changes in product features. Field underwriting has been a thorny topic with agents—how to accurately assess a client’s eligibility for LTCI and then providing an accurate premium quote so that eligible clients are approved as applied for. There are a couple of solutions available. One is a medical pre-screening form that an agent completes on a client and then sends to the BGA’s in-house underwriter. The other solution is a medical pre-screening tool such as Genworth’s LTC eValuate, which helps determine eligibility for LTCI and quickly does reflexive questioning on medical conditions with real time results. LTCI eApp and drop ticket tools, such as those for life insurance, are available. Agents who have easy access and good experience take advantage of eApp and drop ticket, but unfortunately the adoption is much less than it is in life insurance. Agents are looking for training on how to use eApp and drop ticket for LTCI.

Regardless of the medium used to deliver the tools, agents ultimately want an experience that will help them be more productive in the sales process. It’s important to understand the major differences and drivers for agent adoption of insurance technology solutions. Best practices begin with content for educating with fast and easy-to-use tools that can seamlessly integrate from the sales process to eSubmission. Agent best practices are the blueprint for better service to clients and placing more business.