From eApp to noApp - SE2 | Life and Annuities, Digital ...€¦ · Digital disruption has become a way of life for today’s insurance organizations. As our world becomes increasingly

From eApp to noApp

© 2016 SE2, LLC. Proprietary and Confidential Information 2

Digitizing the Life Insurance Process Digital disruption has become a way of life for today’s insurance organizations. As our world becomes increasingly digital, life insurers have had to move from a product-centric model and transform into customer-centric organizations in order to provide reliable and consistent communications across all channels and via an increasing array of devices. Organizations have harnessed the ever-increasing amount of data and have found ways to successfully leverage analytics to drive informed decisions and actions. However, while these measures have increased digital enablement, they are not the only disruptors insurers are facing.

It has become imperative for all insurers to facilitate and improve every experience customers have with their current and prospective life insurers, across all touchpoints. Those that do not offer customers a pleasant, personalized and easy experience with their organization will become less competitive, lose sales and miss growth opportunities.

Making a great first impression is always important, but it’s essential in the life insurance process – and one of the best first steps an insurer can take is to facilitate the onboarding process. Life insurance applications are traditionally long and unwieldy, with dozens of pages of detailed questions about a potential insured’s lifestyle, health, medical history, credit standing and more, all designed to provide information to help the carrier better understand the risk involved – and to enable the insurer to accurately price a policy. The exercise of filling out the application can be daunting to potential insureds, especially in the digital world where services are delivered through a few clicks. Too often, customers put off completing the application because it is too time consuming or they don’t have all the requested information at hand.

The application process is so complicated and frustrating that many potential insureds abandon the task at completely different stages in the application journey, resulting in lost sales for the carrier. And even if the consumer completes the arduous, multi-step insurance application, the insurer can reject the applicant at any stage, or offer a prohibitively high premium that puts the policy out of reach.

Waiting time is also problematic. When prospective insureds finish filling out the myriad forms and they submit the application to the insurer, either through an agent or online, it could take the insurer weeks to process the forms, work with the information, assess risk, price the policy and get a final quote to the applicant. In that time, the applicant might have given up and applied for insurance elsewhere – or he or she might have decided against applying for life insurance completely.

Middle Market: Reservations and Opportunities

These issues have been particularly important for the middle market segment. According to Life Insurance Market Research Association’s (LIMRA) research, fewer than half (46%) of middle-market households held individual life insurance policies as recently as 2014 – and those numbers haven’t improved. Even more alarming, about one in four middle-market consumers have no life insurance at all. While about 60 percent recognize the need for coverage and report that they’re willing to buy a policy, they don’t follow through.1

Middle-market consumers might hesitate to approach a carrier for financial solutions or look to an agent for life insurance for many reasons. According to a 2015 Deloitte report, Life Insurance Purchase Behavior, non-buyers cite a variety of reasons for not buying life insurance, including benefits that aren’t clear and a lengthy application process. Others aren’t familiar with the products available to suit their circumstances. Others perceive life insurance as too expensive. And still others shy away from buying because they feel like the products are too complex and difficult to understand.2

From eApp to noApp

1 LIMRA. Less than Half of Middle-Market Consumers Own Individual Life Insurance Creating a Gap in Protection. Retrieved from: http://www.limra.com/Posts/PR/News_Releases/Less_than_Half_of_Middle-Market_Consumers_Own_Individual_Life_Insurance_Creating_a_Gap_in_Protection.aspx2Deloitte. Life insurance consumer purchase behavior. Retrieved from: http://www2.deloitte.com/us/en/pages/consulting/articles/life-insurance-mid-market-consumer-survey.html

© 2016 SE2, LLC. Proprietary and Confidential Information 3

However, the middle market represents an impressive opportunity for life insurers. Life insurance organizations that can successfully meet the needs of the high-opportunity middle market, with a combination of appropriate product offerings and a fast and efficient application process, can capture significant market share. LIMRA estimates this segment encompasses about 56 million households that have an annual household income of between $35,000 and $100,000.3 There are significant financial benefits to life insurers that can meet the needs of this underserved and underinsured market and capture part of what Deloitte research has estimated to be a $15 trillion pie. And, Deloitte says, accessing the middle market is important to long-term effectiveness.4

In LIMRA’s 2015 Insurance Barometer Study, Todd A. Silverhart, Corporate Vice President and Director, LIMRA Insurance Research, reveals that four in 10 consumers don’t know how much they need or want to buy, and they’re intimidated by the life insurance buying process.5 So organizations can go a long way in closing the life insurance gap between the life insurance haves and have nots by providing education on life insurance benefits in general, with appropriate products, and by providing a pleasant and efficient customer experience throughout the buying process.

Evolving Expectations

Expectations are constantly evolving, with consumers looking to have the same great, reliable and seamless experience whether they’re interacting with a company online, buying an item in person or making an inquiry from a mobile phone. Retailers like Amazon have raised the bar for businesses of all type, and now consumers expect the same experience regardless of business or contact channel. And today, consumers anticipate that they’ll be able to apply for insurance quickly and efficiently. However, traditionally, because insurers need a variety of information to evaluate risk, price a policy and present a premium, applying for life insurance has been a difficult and time-consuming process.

But today, life insurance organizations are falling short of meeting consumers’ expectations, especially when it comes to the application process. Nowadays, streamlining the life insurance application process has become essential, especially in approaching the middle-market. Reaching this market is as simple as turning a “sell” model to a “buy” model, enabling a prospect to choose a suitable product to fit his or her current circumstances that could potentially grow and morph throughout a lifetime. Today, life insurance is a sell model. Agents perform a needs analysis and then select the most suitable product from the range of available offerings. But even if the agent is successful with the initial sale, the applicant is not automatically guaranteed a policy. Even if the applicant has gone through medical assessments, filled out mountains of forms and waited several weeks for a response from the insurer, he or she may still be turned down for the desired coverage.

Historically, life insurers have not been able to offer applicants an easy way to facilitate questionnaire completion. Efficiency improvements within the insurance organization have only been able to improve the application process incrementally. Life insurers haven’t been able to optimize the application process – until now.

A Framework for Success

SE2 Life noApp Digital is a framework that enables carriers to offer suitable products to potential policyholders through a no-touch process. The framework offers insurers an easy, efficient way to onboard applicants and allows consumers to nearly effortlessly apply for life insurance. Life insurance organizations that leverage the SE2 Life noApp Digital framework will better assign risk and more accurately price policies while effectively and efficiently delivering acceptably-priced life insurance to applicants, boosting sales and garnering market share.

From eApp to noApp

3LIMRA. Less than Half of Middle-Market Consumers Own Individual Life Insurance Creating a Gap in Protection. Retrieved from: http://www.limra.com/Posts/PR/News_Releases/Less_than_Half_of_Middle-Market_Consumers_Own_Individual_Life_Insurance_Creating_a_Gap_in_Protection.aspx4Deloitte. Life insurance consumer purchase behavior. Retrieved from: http://www2.deloitte.com/us/en/pages/consulting/articles/life-insurance-mid-market-consumer-survey.html5LIMRA. 2015 Insurance Barometer Study Finds Americans Continue to Overestimate Cost of Life Insurance. Retrieved from: http://www.limra.com/Posts/PR/News_Releases/2015_Insur-ance_Barometer_Study_Finds_Americans_Continue_to_Overestimate__Cost_of_Life_Insurance.aspx

© 2016 SE2, LLC. Proprietary and Confidential Information 4

Similar to the way individuals can be pre-approved for credit cards, prospects could be potentially approved for Term policies based on a risk analysis from data available from information in the industry and public domain. Then, the individual would progress through an automated underwriting process based on information based on the risk analysis.

Policy application is an automated process. In order to authenticate his or her identity, an individual would merely provide several key identifiers – name, address, driver’s license number, social security number and date of birth – and then an esignature to authorize the insurer to access personal data. With this data, that includes an individual’s medical history, driving record, credit history and family relationships, the system goes through an automated underwriting process to assess risk, and then it offers the insured tailored coverage and premium amount.

Life noApp Digital is a game changer. Not only does the framework streamline the application process, it speeds decisions to a small fraction of the time needed with traditional policies. Within minutes – less time than it would take a consumer to complete one page of an application – the system delivers a detailed risk assessment and underwriting decision. Insurance organizations can take the end-to-end application process from up to a few weeks to mere minutes. If an initial product offered is not appropriate for the applicant, the system will innovate to create a tailor-made product match. Agents who take advantage of this process will be able to discuss the core needs of applicants and ensure that each client has the right combination of products instead of simply completing a long application. But Life noApp Digital is not only an enabler for agents. It also facilitates the direct-to-consumer model as well, easing and speeding the application process for those like Millennials who prefer to apply for life insurance online.

Life noApp Digital incorporates advanced digital technologies, mainstream services and components including Robotics Process Automation (RPA), Cognitive Computing, Insight Driven Analytics and mobility. The framework uses a proprietary blend of data sources and an automated end-to-end process. SE2 works with an extensive partner ecosystem including service providers that offer incentives to individuals who take measures to become healthier and associate the information with their life premium, for example.

noApp

noApp Automated UW

Enter key client infoSSN / Drv Lic / Name

Fetch data from vendors services

Fetch data from internal systems

Application ready for review / eSignature

Application & electronic data

Auto start eUWRisk assessment & underwriting

From eApp to noApp

© 2016 SE2, LLC. Proprietary and Confidential Information 5

Partnering with SE2 to streamline the application process can cut the time needed to fill forms from days to minutes. Life insurers can optimize underwriting while delivering right-priced policies. Individuals can go from initial application to purchase and full coverage in under 10 minutes, ensuring that individuals have a fast and pleasant customer experience while insurers benefit from increased sales.

SE2

carr

ier c

lient

s

Customers

Producers

OCR / ICR Bots

eApp

Quick quote / illustration / eApp: SE2 / aggregators— iPipeline / Ebix, Etc.

Case managementIGOs / NOGo

supplemental info

Evidence vendors: MIB, MVR, Rx, etc.

Medical Vendors: Lab, APS, etc.

ComplianceSuitability compliance

Continuous status updates

UnderwritingRisk assessment,

requirements, ordering, evidence review, decisions /

rating

Admin systemInforce processing claims, commissions, billing, etc.

Multi payment channel

SE2 new business & underwriting platform Risk assessmentUW workflow/workbenchAgent licensing checkData warehouse

Risk evaluation enginePredictive analyticsMulti - channel supporteUnderwriting

Digital Life Framework

From eApp to noApp

© 2016 SE2, LLC. Proprietary and Confidential Information 5

SE2 can take life insurers light years beyond the competition.

For more information on how your organization can optimize your policy application process, contact SE2 at 1.800.747.3940 or [email protected].