With apologies to Charles Dickens, David Leifer, senior counsel for the American Council of Life Insurers (ACLI at www.acli.com), suggests e-commerce in the life insurance industry is a tale of two worlds. Life insurers are examining consumer-focused applications they can bring to the Internet and other electronic capabilities that will further business, says Leifer. But on the other hand, he adds, its also evident there are some [existing] things they need to work on.
The ACLI represents life insurers and fraternal benefit societies before federal and state policymakers, insurance departments, and the courts. Member companies account for 75 percent of life insurance premium in the U.S. As part of its annual conference in October, 44 member companies were surveyed on various e-commerce issues.
One area troubling insurers is electronic signatures. Despite passage of the E-Sign Act by Congress, insurers have lingering concerns about what is the right technology to use, reports Leifer. There are still some concerns about the legal ramifications of doing things electronically, he says. There is definitely work for us to do as an association to identify barriers to e-commerce and eliminate them.
Cost is a major part of the electronic signature debate, Leifer points out. Using public key infrastructure [PKI] is very expensive, and I dont think too many companies are using it, he says. He believes technology needs to provide the answers to this dilemma. Electronic signatures are a problem when you are selling to a new customersomeone you dont have a relationship with, he says. How do you know who that person is? Our companies are hoping there will be a third-party solution to this issue. When offered four options for providers of e-signature validation, the life insurers chose a private entity as the most preferred choice followed in order of preference by the federal government, banks, and the U.S. Postal Service. Insurers want to have the confidence the people they are dealing with are the people they claim to be, so there is no fraud and there wont be any challenges to the transaction down the road, he says.
What almost all life insurers are doing on their Web sites is offering a self-service function for customers. Once you know who your customers are, the customers can have access to their accounts through a PIN and a password.
The survey found that commodity-like products, such as term life and fixed annuities, are the products most likely to be found on a life insurers Web site. They are more prevalent than the more complex products offered by insurers, he says.
The need for improvement is one of the themes of the survey, says Leifer. Most of those we surveyed are not completely satisfied with the implementation of their e-commerce strategy. There is definitely room for improvement. Robert Regis Hyle
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