Approximately 55 percent of life insurance companies have adopted or are in the process of adopting e-applications for at least some of their products, according to a new report.
Celent, a research advisory unit of the management consulting firm Oliver Wyman, discloses this finding in a new report, "Have e-Signatures Arrived: An Update for Life Insurers." An update to an earlier Celent report published in 2007, the 2013 survey re-examines the issues that insurers face as they move toward straight-through processing, enabled by process automation and punctuated by use of e-signatures.
According to the 2013 Celent survey, the vagueness of the federal and state laws, which don't prescribe e-signature technology, at first encouraged early adopters toward the most robust technology solutions available, such as Public Key Infrastructure (PKI). But many insurers have since determined that less robust (and less expensive) solutions such as click-wrap (i.e., having users click “I Accept” on a webpage) or nonbiometric signature captures are sufficient.
The survey observes that 70 percent of respondents use click wrap versus 30 percent in 2007. Similarly, one-third used PKI in 2007, and none use it today.
Celent’s 2007 report saw little progress in the use of e-signatures by life insurers, but in 2013 they are showing large-scale adoption. In Celent’s 2007 survey, 53 percent of life/annuity/health insurance respondents said their companies were not using e-signatures in their dealings with customers or agents. However, in 2013, that number dropped to 25 percent.
By line of business, Celent found in 2007 that annuity carriers were not using e-signatures in their interactions with customers or agents. Among life/health insurers, 47 percent were not using any form of e-signature. In 2013, 40 percent of annuity carriers and 81 percent of life/health are using some form of e-signature.
"The current lack of e-signature use for annuities is surprising because annuities are a somewhat commoditized line of business," the report states.
In 2007, although life insurance respondents indicated that a good portion of their new business could be automated, they were not enthusiastic about their prospects for STP. In 2013, insurers are much more optimistic: 22 percent said that more than 80 percent of their new applications could be processed with virtually no human intervention, compared to 0 percent in 2007. In 2013, nearly 40 percent said that more than 60 percent of their new business applications could be processed without human intervention.