The life insurance industry – from insurers to MGAs and vendors – need to work together to find more efficient electronic ways to do business, or lose out to the industry’s major competitors, said the president of the Canadian Association of Independent Life Brokerage Agencies (CAILBA).
“The competition is not in this room,” Michael Williams told the recent annual meeting of the Canadian Life Insurance Standards Association (CLIEDIS) in Mississauga, Ont. “The competition is the banks. I really believe the banks are doing a bang up job of getting into our space and if we don’t pull our act together, we’re going to have trouble.”

Williams said CAILBA members want a “smart, electronic risk application” that will make it easier for everyone in the industry to meet increased operational efficiencies despite a demanding and regulatory environment.

The ideal would be an app that would, for example, allow an advisor to capture all the information needed on an electronic device such as a smart phone or tablet and transmit it to the insurer or back office, cutting out the longer, manual process of having the MGA input the information and then courier it back to the advisor, he said.

Williams said CAILBA is ready and willing to work with insurers interested in investing in this application, adding that advisors, for the most part, are keen on embracing the technology.

He cited one MGA member who conducted a survey among its advisors, asking how frequently they would take advantage of an application that was easy to use with a laptop, a smart phone or tablet, and did not require any follow-up or signature. Some 63 per cent said they would use it all the time and another 27 per cent said they would use it at least some of the time – figures that Williams said accurately mirrors the rest of CAILBA members’ advisors.

Tana Sabatino, edata project manager at CLIEDIS, told the group that a number of projects are on track as the organization moves forward with its five-year plan, called its eData roadmap. The roadmap focuses on common issues in the industry aimed at cutting back manual inputs and improving efficiencies in terms of time and usability.

Big data

Other speakers at the meeting discussed trends in technology and how the industry should go about using big data – the term referring to a collection of data so large and complex that it’s difficult to process using traditional applications.

Emerging technologies have evolved at such an exponential pace that it has made a number of people, especially customers, uncomfortable, said Chuck Johnston, research director at management consultant Oliver Wyman in Connecticut.

“The question is: what technologies are adaptive and useful? Cool is nice, but it may not fit your business model,” Johnston said. However, he noted that staying up on technology is the way to keep up with what your customers want.

Information from social media sites has its pluses and minuses, said Johnston. For example, there are many concerns about using social information for things like claims and especially for underwriting. But at the same time, advisors working in life insurance with few direct contacts can glean a lot of valuable information on potential customers via social media.

Inevitably, there will be legal tests on what information can be used appropriately from social media, a similar position facing the growing realm of big data. “You are going to have constant challenges about how much information you can use and how you use it – but it’s a great source of information.”

New technologies are also driving expectations as insurers compete not only with other insurers having the same business model, but with online competitors who can offer products faster and more efficiently for many customers, said Johnston.

There is an expectation now from customers that they should be able to get a product at any time of the day or night – not just during 9-5 hours. And given the amount of information clients give to an advisor, clients now expect the advisor to tell them how much life insurance they need given their age and financial status, rather than asking clients how much they think they need, he said.

Faster data is increasing the amount of information out there – even though the time it takes to analyse it all has decreased proportionately, said Eric Weisburg, a business value consultant with IBM Software Group in New York.

Weisburg said each piece of data is like a puzzle: if looked at individually, the view is quite narrow, but take a look at the whole puzzle and more information comes out that wasn’t known previously. He gave the example of a single claim transaction. While on the surface nothing appeared out of the ordinary – there was one claim, one claimant, one doctor and two witnesses – but when the names of the doctors and witnesses were put in to a larger database, there was evidence of a fraud ring.

He said big data is a strategic tool that will help businesses gain the full understanding of all their customers, what makes them tick and why they’re buying.

“Forward-thinking organizations recognize they need to equip customer-facing professionals with the right information to engage customers, develop trusted relationships and achieve positive outcomes, such as solving customer problems and up-selling and cross-selling buyers. To do this, they need to be able to navigate large amounts of information quickly to zero in on what’s needed for a particular customer.”