Raising the Bar: Tools and Tactics to Drive Life New Business Efficiency

by Craig Weber, May 1, 2007

Abstract

Boston, MA, USA May 1, 2007

Data quality issues help explain why most carriers struggle with new business unit costs.

The struggle to reduce costs and to improve new business efficiency continues to vex carriers. One reason is the industry's continued reliance on paper applications.

"The tools exist today to address this issue," says senior analyst Craig Weber, author of the latest Celent report, . "But tradition still trumps innovation in life insurance new business. So many carriers are mired in inefficient processes that have remained unchanged for decades." Weber notes that carriers with e-applications can leverage higher data quality throughout the new business process, which makes the process more efficient for carriers, agents, and customers.

The 33-page report is based on a Celent benchmarking exercise that examines data provided by 11 prominent life insurance carriers. The report reveals the tactics and strategies used by carriers within their new business departments. A companion report, Setting the Bar: Key Metrics in Life New Business, January 2007, discusses metrics such as budget per insurance application received and per policy issued, staff productivity, average staff costs by position, average new business cycle time, and more.

A table of contents is available online.

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

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].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Boston, MA, USA May 1, 2007

Executive Summary 3
Introduction 6
  Methodology 6
  Suggestions on Data Usage 6
About the Respondents 8
  Key Findings 8
  Background 8
  Face Amounts and Insured Amounts 9
Tactics and Strategies 12
  Key Findings 12
  Carrier by Carrier Summary 14
  New Business Automation 15
  Missed Automation Opportunities 16
  Agent Self-Service 17
  Requirements Management 19
  Differentiating Producer Service 21
  Paperless Underwriting? 22
Performance Measures 24
  Key Findings 24
  Making Sense of the Numbers 25
  Not in Good Order 25
  Application Submission Methods 26
  Post-Issue Rework 28
Conclusions 30
Objectivity and Methodology 32

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