Needham, Mass. – New research from Needham, Mass.-based TowerGroup Inc. finds that in today’s global business model, electronic commerce is no longer a “nice-to-have” capability, but a necessity, yet the insurance industry continues to hold onto the traditional paper-based, wet-signature contract execution model.
The report, titled “Electronic Signature and Secure Forms in the Insurance Industry: Taking the P&C Pen to the Web,” authored by Karen Pauli, senior analyst in TowerGroup’s Insurance practice, explores the numerous opportunities for insurance carriers to improve operations by implementing electronic signature and secure documents technology.
The elimination of legal barriers by the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) opened the doors for financial services organizations to adopt electronic-commerce initiatives, such as electronic signatures and secure documents. As a result, other segments of financial services have experienced decreases in processing time by as much as 50%, and transactional costs have declined up to 75%.
According to TowerGroup, many of today’s consumers have become less tolerant of these paper-based transactions, and expect all their financial dealings to be supported in an electronic environment. The report asserts that insurance carriers need to respond to consumers’ experiences with other financial transactions, or risk losing business to financial services organizations that have adopted leading-edge technology for contract execution.
“Insurance carriers must transition away from traditional paper-based, wet-signature processes and adopt secure document and electronic signature technology, Pauli reported. “The technical complexity may appear daunting, but technology solutions providers and experts in the marketplace can partner with carriers to overcome this hurdle.”
Though IT budgets for responding to demands for new functionality are stretched thin, several forces beyond consumer preferences require that insurers implement the capabilities needed to move documents electronically. These forces, according to the report, include the globalization of the insurance industry, the push for companies to become more environmentally sensitive, the ongoing battle to prevent fraud and regulatory compliance.
TowerGroup believes e-signatures and secure documents are an essential requirement for carriers because they facilitate the acquisition of business in the quickest, most cost-effective, legal manner. However, it is equally imperative that carriers make the development decision on an enterprisewide basis.
“The ever-increasing demand to establish competitive advantage and deal with pervasive problems related to fraud and compliance requires new and creative solutions, Pauli said. “Electronic signature technology has enterprise applicability to address all these issues.”
Source: TowerGroup Inc.
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