Phoning It In: Teleunderwriting Comes of Age

by Craig Weber, December 9, 2004

Abstract

Boston, MA, USA December 9, 2004

The lowly telephone may turn out to be a transformational tool as insurers rethink how they gather and analyze application data.

Carriers have experimented with collection of life insurance application data over the phone for years. But why hasn稚 teleunderwriting really taken off? Changing attitudes and improved technology are poised to eliminate any remaining barriers.

"The case for teleunderwriting is compelling,"

says senior analyst Craig Weber, author of . "Both carriers and producers can realize dramatic benefits by handing off application data collection to a call center. But to make it happen, carriers need to pry themselves away from traditional underwriting methods."

Are Agents Warming Up To Teleunderwriting?

Weber notes that one of the traditional concerns about teleunderwriting has been alienation of key channel partners, who take a dim view of someone else痴 talking to "their" clients. But producers appear to be increasingly willing to try teleunderwriting, with 24 percent actually preferring to have someone else take care of application details (according to results of Celent痴 2004 producer survey).

The report explores five key areas of opportunity that result from teleunderwriting, including 1) focusing agents on selling; 2) reducing costs; 3) reducing new business cycle time; 4) bringing new sales channels online more quickly; and 5) progressing toward a future vision for new business.

"That fifth area is really the clincher," Weber says. "If the other areas don稚 generate enough enthusiasm to jump-start teleunderwriting, carriers should take a look at their overall new business technology and service strategies. For most carriers, the things they need to do to implement teleunderwriting will overlap with other priority initiatives, such as automating new business workflow, creating a common front end for all new business, and implementing more flexible sourcing strategies."

The report outlines the experiences of two carriers that have used teleunderwriting effectively: The Hartford, and Baltimore Life. It also provides a benefit model that carriers can use to explore potential savings from improved new business process efficiency.

This 28-page report contains 11 figures and four tables. A

table of contents is available online.

of Celent Communications' Life/Health Insurance research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

 

Boston, MA, USA December 9,  2004

Return to report Abstract

 

EXECUTIVE SUMMARY 1
INTRODUCTION 5
OVERVIEW 6
  Teleunderwriting Defined 6
  Getting the Value 7
  The Slow Transition 8
  Providers 9
DISTRIBUTION VIEWS 9
  Impact of Face Amount 11
  E-Signatures 12
THE CASE FOR ACTION 13
  Focusing Agents on Selling 14
  Reducing Costs, Driving Revenue 15
  Reducing New Business Cycle Time 18
  Improving Speed-To- Market 18
  Creating a Vision for the Future 20
REAL-WORLD EXAMPLES 21
  Baltimore Life 21
  The Hartford 22
  Summary of Examples 24
FINAL THOUGHTS 25
OBJECTIVITY & METHODOLOGY 27

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