Market demand: Giving the people what they want

Consumers have made it clear that they are ready for insurance to catch up to the technology revolution that has taken hold of nearly every other industry, and offer a true "omni channel" experience. When consumers are offered the option to either e-sign or sign the traditional way with pen and paper, they overwhelmingly prefer to e-sign—in fact, some carriers have achieved up to 92% online adoption. E-signatures enable a paperless transaction and eliminate the hassle of asking customers to come into an office or go through the print/sign/fax/scan routine.

Despite these clear facts, making the case for e-signatures in insurance has involved a concerted effort on the part of associations, technology providers and more progressive carriers and agents. Some independent agents who attribute their book of business on their client relationships express concern that e-signatures and digital processes offer a less personal experience.

(Photo: Shutterstock)

But as many insurers, including 21^st Century, AAA Carolinas, Erie Insurance and agents alike have found out, e-signatures deliver the ultimate personalized and convenient experience. They recognize that the personal touch does not necessarily mean meeting face to face over a coffee and a handshake—it means giving your client the ability to do business with you when, where and how they want. Ultimately, your insurance customers will thank you for giving them what they want by giving you their business and loyalty.

In fact, one insurance carrier reports that they have experienced a 14% higher retention rate with customers who e-signed their new business policy as opposed to the traditional signing methods. It's clear that customers are looking for a better way to buy insurance and employing e-signatures is a win-win—customers receive efficient and proactive customer service, while insurers increase retention rates.

Boosting efficiency and productivity

Insurance, like other regulated industries, is mired in process and paperwork resulting in inefficiencies and a slow pace of innovation. When applications fall to paper for signatures, agents or back office staff collectively spend hours printing, mailing, faxing, scanning, rekeying, shredding, indexing and managing records. Their time would be much better spent serving clients and growing their book of business.

Not only does efficiency benefit the insurance company and agent, it delights clients as well. One major automobile insurance company reported that the application process for new business once took 52 days on average—now with e-signatures, it is cut down to no more than 15 minutes. Customers can apply, sign and complete their applications in one session, rather than waiting for regulated options forms in the mail. A delay introduces the risk of drop-off between the back-and-forth of manual signatures. Consumers want businesses to be fast and competent at each point of the customer engagement cycle, and if the beginning of the relationship is marred by endless back and forth, everyone risks losing out.

(Photo: Shuttestock)

Significantly reducing errors and risk

Because the insurance industry is heavily regulated, it can be tricky to deliver a faster, more efficient experience without compromising compliance. Important customer records need to be reliably retained, and that important responsibility often falls on agents. When audits occur or if disputes arise, the discovery process involves sifting through paper files, often in multiple locations. The result is risk for both the insurance company and the agent.

[Related: 8 ways that digital innovation is reinventing insurance customer service]

By going digital, insurance companies can benefit in two ways—the first is in achieving faster processing without cutting compliance corners. E-signatures offer the ability to enforce business rules through controlled workflow—errors and omissions are avoided from the start because packages cannot be submitted if a signature is missing. Secondly, this technology strengthens a carrier's and/or agent's compliance and legal position with tamper-evident records and detailed e-sign audit trails, showing the entire e-sign process. For example, the electronic evidence of e-signatures has saved carriers millions in litigation costs and helped avoid costly penalties and settlements.

Return on investment

While customer experience may be the top driver for insurance companies and agents to adopt e-signatures, an added bonus is that eliminating paper from your processes provides an almost immediate ROI. For example, one carrier revealed that they saved $10 for each transaction just from the use of e-signatures, while a private passenger auto insurer saved more than $800,000 within the first year of implementation due to reduced mailing costs and associated back-office processing. The ROI is tangible and insurers can pass those savings on to customers, adding significant value to the relationship and increasing retention.

The insurance industry is evolving fast, driven by changing consumer expectations and competitive pressures in the distribution channel. It may surprise you that e-signatures offer a relatively quick and low-cost way to make business processes more efficient, more compliant and in step with current consumer expectations. It's a no brainer for an industry that must innovate to stay alive and compete in a "brave new world" of insurance.

Andrea Masterton oversees e-SignLive's marketing strategy, market awareness and demand generation within key industry segments, specifically insurance and financial services. Her 15+ years' experience in the electronic signature market includes producing hundreds of educational webcasts and seminars, authoring dozens of white papers as well as active participation in industry electronic signature and process improvement workgroups. Andrea is frequently called upon to present at industry events including recent presentations at ACORD, IASA, LOMA, LIMRA, NAILBA, LIDMA, and others.