Celent: e-Signatures Now a Competitive Necessity

The proportion of life insurers now offering e-signatures in their dealings with customers or agents has increased to 74 percent from 47 percent over the past five years, according to “Have E-Signatures Finally Arrived? An Update for Life Insurers,” from Celent, a research and advisory firm.

“Insurers understand the need to reduce cycle time, improve process efficiency, and meet the demanding attitudes of their agents and customers,” said Karen Monks, Celent insurance group analyst and author of the report. “Few insurers refute that these are service imperatives that must be addressed by a combination of technology, process improvement and organizational discipline.”

The report reviews e-signature tools, regulations and trends and compares recent survey results with those from “An E-Signature Update for US Insurers,” a previously published report also from Celent, to determine how much progress insurers have made in the use of e-signatures. It also examines issues insurers confront as they move toward straight-through processing, enabled by process automation and e-signatures.

Potential benefits of e-signatures, according to the report, include:

Eliminating errors

Improving compliance

More time to sell for producers

Shortened app-to-issue time

Support for multiple channels

Potential for customer retention increases


The report attempts to debunk several myths surrounding the technology, including:

The law isn’t clear on e-signatures - Federal E-Sign Act says e-signatures are valid. Virtually every state has passed a version of the Uniform Electronic Transactions Act (UETA).

The benefits don’t justify the costs - E-signatures enable straight-through-processing and automation, both priorities for improve costs, quality and competitive advantage.

E-signatures require a lot of complex technology - Simple technology and process controls can be used to address e-signature functions.

Customers and agents are nervous and will not use them - Consumers routinely use e-signatures with banks, retailers and other financial services institutions. Agents will work with insurers with whom it is easy to do business.


Life insurers are beginning to see the reality that e-signatures present opportunities, not threats, according to the report.

“Today, insurers are much more optimistic in their assessment of the value that e-signatures might bring to insurance processes, and one-third of survey respondents state that e-signatures are now a competitive necessity,” Monks said.

Additional highlights from the report:

A significant percentage of life new business could be addressed through automation

Insurers are more optimistic about the value of e-signatures than they were in 2007.

One-third of life insurers said e-signatures are a competitive necessity, nearly double the number in 2007.

Nearly 60 percent of life insurers use e-signatures on agent-based applications for insurance, and another 19 percent rank it as a highly likely project for the next year, which is nearly double the number from the 2007 survey.

Nearly 70 percent of life insurers expect to use e-signatures on agent-based applications and another 15 percent said it is highly likely. This means that 85 percent of life insurers could be using e-signatures on at least some life applications by 2015.

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