Three years ago, The Baltimore Life Insurance Co. implemented an automated sales and underwriting system in conjunction with striking a marketing deal with a large membership organization. The Owings Mills, Md.-based carrier believed the affinity deal could drive unprecedented new premium growth for its death benefit products through a concerted campaign of television ads and mailers."It was a significant opportunity," says Garry Voith, Baltimore Life's assistant vice president and director of distribution technology and marketing.
Although the marketing deal failed to reach its full potential in terms of premium growth, Baltimore Life had the technology to build premium volume, process policy applications faster and help burnish the company's reputation as a small player-with assets around $800 million-and build a reputation for easy processing and fast-pay commissions among agents.
The experience also led Voith and others at Baltimore Life to examine its approach in the highly competitive life insurance market. "There's a niche opportunity in this market, and it involves offering more simplified final-issue products," says Voith.
Speed also is crucial, and to that end, the company has been using an automated sales and underwriting system it developed in conjunction with Navisys, Inc., an Edison, N.J.-based firm that assists life insurance carriers with reworking and improving business processes through technology.
Baltimore Life dubbed the system its INSpeed Project, using it to sell its final expense product, Silver Guard, through direct-response and agent-assisted sales channels.
To date, the system has enabled the company to "jet" issue policies-a figure Voith expects will grow an additional 10% this year. Baltimore Life also expects the system will help it expand sales efforts by making the INSpeed system a centerpiece of its pitch to independent marketing organizations, membership organizations interested in affinity marketing deals, and its own career agents.
Agents are very pleased with the system, Voith says, because it cuts the time to complete applications to about 15 minutes and provides "instant" approval, enabling insureds to make their first premium payment right away. In turn, that means agents receive commissions more quickly, and they have less follow-up work to do with underwriters.
Balitmore Life has been working on refining INSpeed to make it more functional and dynamic. Voith says the company has revised the scripted application process it uses for direct-response sales and crafted a marketing plan to offer additional products through a wider array of marketing organizations and its own career agent network.
Currently, women with an average age of 60 years who have household incomes up to $80,000 are the typical buyers of the Silver Guard policy. The face value of the policies is less than $10,000 and buyers typically do not have other insurance for their final expense needs. "We're serving an under-served market," Voith says.
The company is exploring other simplified issue products it can sell through the INSpeed system. Those may include term life and single premium products, as well as universal life and single premium annuities.
Baltimore Life was not unlike most life insurance carriers when it decided to transform its application and underwriting processes.
For the most part, "it's a very paper-based and fragmented process," says Michael Roe, president of NaviSys.
Baltimore Life teamed with NaviSys to devise a new business process that would require one-time data entry and support data exchanges between application, underwriting and customer relationship systems. NaviSys' Front Office product, a Java-based system that uses Internet interfaces and J2EE standards to enable streamlined data exchanges, serves as the foundation for Baltimore Life's new business process.
"It's basically getting rid of legacy systems and having fewer systems doing more work," Roe explains.
Baltimore Life recognized it had to address four key challenges to achieve instant-issue policies:
- A thorough, easy-to-use application form and sales process. Given that Baltimore Life planned to use a third-party call center to handle inquiries and sell policies to prospective customers, Voith and NaviSys developed a Web-based scripted application and sales process that licensed call center agents could easily use while on the phone with prospects.
For example, licensed call center agents will ask a prospective customer, "Do you have uncontrolled high blood pressure?" The agents then ask follow-up questions about physicians and medications to weed-out applicants who have high blood pressure and don't receive treatment. "With simple-issue policies, you're either in or you're out," Voith says.
Call center agents also will follow-up calls with consumers who have already received a policy quote from agents. Call center agents receive policy and the buyer's demographic information from agents and then call prospects to verify the information and complete the application questions.
The call center approach and scripted application form helps minimize missing and inaccurate information that often plagues paper applications filled out by agents in the field. "Five more minutes up front may save five hours on the back-end," Roe says.
- Binding electronic signatures. When prospective customers call agents, they're told the call is being recorded and that their verbal agreement to the policy purchase will serve as their electronic signature. The NaviSys platform enables Baltimore Life to store the voice files and stamp paper copies of policies with the time and date of the voice recording.
In addition to meeting legal requirements for buyer signatures, the voice file eliminates discrepancies and "he said/she said" scenarios, Voith says. In addition, prospects are less likely to lie about their medical information. "When they know they're being recorded, you're going to get the truth out of people," he says.
The voice files also give Voith a handy tool to monitor the interactions between agents and buyers and identify any areas that require additional training or improvements.
- Automatic medical checks. NaviSys and Baltimore Life developed a Web-based interface that automatically queries Westwood, Mass.-based MIB Group Inc. for information about the prospective customer. This occurs while the call center agent completing the application and sales process.
The information then flows into Baltimore Life's underwriting rulebook to look for any issues that would require rewriting the policy or adjusting the premium.
When the underwriting system detects a problem, it alerts the agent who informs the customer they're not eligible for a policy. Or, in some cases, the customer may qualify for coverage under a different product, which the agent can then sell.
"It's moving underwriting from having to look at every piece of paper to looking for exceptions," Roe says of the automated underwriting system at Baltimore Life. "It can really help streamline the new-business process."
The link to MIB's databases is an important step toward achieving the 70% rate of "instant issue" policies Baltimore Life set as its goal.
Typically, medical bureau queries and other underwriting information requirements contribute to an average three- to four-week processing lag between the customer's initial decision to purchase and carrier approval of the policy. In turn, the lag can increase the chance of buyers' remorse.
With approvals coming to buyers while they're on the phone, "the buyer doesn't have a week to think about it and not take the policy," Voith says.
- Automatic payments. Once a call center agent gets approval and the insured accepts coverage, the NaviSys platform triggers a payment tool agents use to obtain an electronic funds transfer (EFT) payment authorization for initial premium payments. Initially, the system received credit card authorization via The SurePay Gateway, but Voith says the company learned that bank drafts were the primary form of payment among buyers, so the carrier discontinued the credit card payment option.
As the carrier rolls out additional marketing plans and products through INSpeed, Voith says Baltimore Life may resume offering the credit card option to offer flexible payment choices for buyers.
After INSpeed obtains the payment information, the system feeds policy and payment information directly into Baltimore Life's administration system.
The automated payment process enables Baltimore Life to issue faster commission payments to agents. Voith says the INSpeed system has garnered notice among independent marketing organizations and agents.
"It helps us from an agent recruiting standpoint," Voith says. "We've seen it expand the number of people who are looking at us to do business."
Baltimore Life is mapping future business plans for its INSpeed project. The company is looking at expanding its portfolio of affinity marketing arrangements to help drive premium growth.
"We want to do more with direct marketing," says Voith, noting that any plans will be mindful of sales channel conflicts with existing agents.
In addition, Baltimore Life is considering rolling out INSpeed to field agents. Agents could use laptops or hand-held devices to interface directly with the application and underwriting systems that are being used by CSRs to process policy applications.
Voith is hopeful that agents will adopt the technology once they see how it benefits them and their customers. "Once an agent tries it, they will quickly adapt to using it," he says.
"It's a change management issue, but more carriers are looking for data integration and efficiency because the marketplace requires it," says Navisys's Roe.
Lance Helgeson is a Chicago-based business writer.
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