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Online tracking systems hailed a success by protection advisers

Clients’ protection applications can be followed in real time

July 2009 News

EMILY PERRYMAN

Intermediaries have described recent changes made to online point-of-sale protection systems as a big step forward in improving the underwriting process.

AEGON and Legal & General have both launched online systems that aim to make it easier for advisers to amend and track individual protection applications. With the length and ambiguity of the underwriting process seen as a key reason why many applications fail to go on risk, providers are hopeful that the changes will make it easier for advisers to secure business.

Legal & General has spent £30m on developing its new system, OLP Connect, which it said sets a new benchmark for technological capability in the industry. The system builds on its existing OLP platform and allows the adviser to view all their applications wherever they are in the process, and make changes as and when they are required.

Joe Wiggins, spokesman for L&G, said: “Advisers have as much ability to make changes to applications as our underwriting staff do. The system opens up our back office to advisers and applications no longer disappear into a black hole.”

INSTANT DECISIONS

Wiggins said more decisions will be given at the point of sale because a lot of underwriting has been built into the system. If an application is not straightforward it is automatically referred to L&G’s team of underwriters who can decide the case themselves or refer it to one of eight underwriters who specialise in different areas of medicine.

“A lot of providers are focusing on clean applications which are generally accepted straightaway by any system. What we’re tackling is the more complicated cases which need a degree of human involvement. We have a greater degree of underwriting expertise hardwired into the system,” said Wiggins.

Wiggins also claimed that the system could help advisers sell more protection because of the ability to quote and apply for up to 40 product variations on one application. The facility should reduce the amount of times the adviser has to go back to the client, which Wiggins said makes the process slicker and the adviser look more professional.

Phil Jeynes, key account manager at Direct Life & Pensions, one of the first firms to use the system, said: “A lot of providers already have online systems but they are not as advanced. Others give a snapshot of the notes the underwriter has made so they are less interactive. The new systems show what needs to happen and L&G’s allows us to change material things ourselves.”

EMAIL ALERTS

Jeynes said the only drawback to L&G’s system is that it is less proactive than some other providers’ systems, which automatically email the adviser when the insurer makes a change to a case. AEGON’s recently launched online tracking system sends email alerts when the status of a case changes, and it also has a countdown facility showing the amount of time a client has to respond to acceptance terms.

Stephen Crosbie, head of proposition for protection and investments at AEGON, said: “Advisers can proactively see if a case is coming to an end and chase the client personally if they still want the case to go ahead.”

Roy McLoughlin, senior partner at IFA firm Master Adviser, said the countdown facility is very useful for important cases.

“There is so much going on in an adviser’s office that they don’t always check up on cases. If the updates flash up on a message that is very good,” he said.

Intermediaries can also view all online applications and track any new business applications 24 hours a day, seven days a week. Crosbie said that while the system does not speed up underwriting itself, it can speed up and improve the rate of completions because the adviser is informed about what stage an application is at.

Matt Morris, head of protection strategy at specialist protection advisers LifeSearch, said: “Systems are very important in helping the adviser sell protection because it means you can track the application all the way through the process and keep a close eye on potential snags, so you can raise them with the client and sort them out with the life office much more quickly and efficiently. The more control, information and accessibility the adviser has the better.”

REAL-TIME UPDATES

Another useful feature of AEGON’s system is that it is a live system and so updates information in real-time.

“Some insurers put things on their system that are days old,” said McLoughlin. “Clients can get annoyed with advisers when they chase their doctors for medical reports and find out that the doctor has already sent it to the insurer two days ago. AEGON shows us straightaway and we don’t waste time going round in circles.”

Intermediaries are hopeful that other providers will introduce online tracking systems in the near future to free up their back office time and smooth the communication process between insurer, adviser and client. However, some have suggested that insurers spend more time in IFAs’ offices to find out what does and does not work.

UNDERWRITING AND FAILED APPLICATIONS

A recent survey by Health Insurance found that that the average non-completion rate is 20% for life insurance and critical illness cover and 24% for income protection cover. Insurers said one of the main reasons for failed protection applications is the length of the underwriting process. The longer the turnaround time, the more likely it is that consumers will change their minds about needing protection, particularly if they are not informed about how their application is progressing.