Author: Bill Atlee

When Was the Last Time You Gave an Inforce Illustration to Your Policyholders? It’s Time.

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Carriers Are Feeling the Impact of Negative Interest Rates

Without a doubt, carriers are under enormous pressure to maintain profitability in a low interest rate environment. Historically low interest rates over the last 10 years have pushed many carriers into a negative interest rate environment, meaning the money carriers invested in the open market cannot earn what they promised policyholders in contracts sold many years ago when yields were at 10%. Millions of universal life contracts, as well as interest-sensitive whole life policies, offered guaranteed interest rates of 4-5% and guaranteed cash value. Most of these older contracts are now paying the minimum interest rate guarantee (maybe 3%) and in some cases, carriers have raised their mortality rates to offset these losses. The impact on policyholders: their contracts are under-performing, which results in involuntary lapse or policyholders that outlive their contracts.

Policyholders Deserve to Know

The fact is, the only way to give a policyholder a present snapshot of the “health of their policy” is to run an inforce illustration. These new projections can give a client a good indication on how the policy values will perform at current assumptions. Doesn’t every policyowner deserve to know from their carrier today how future projections impact their financial expectation? There’s a problem though- most of the old illustration software that calculates these projections is sitting on old architecture and can’t scale. Why wasn’t this illustration software modernized on new infrastructure? The answer: because the majority of these products have been discontinued and are no longer sold through agents. Consequently, agents don’t need to access it. This software is usually used by the home office staff to satisfy an inforce illustration request from an agent or policyholder… and less than 1% of policyholders receive an inforce illustration each year.

Can the Course Be Corrected?

If most carriers’ inforce illustration software resides on Windows 95/98 machines, mainframes, or is hand calculated by actuaries, it’s virtually impossible to provide every policyholder with current projections each year. The solution simply doesn’t scale to educate existing policyholders on their policy performance.

Here’s what I mean by not scaling- Let’s say you have 500,000 policyholders on your inforce block and you want to give each policyholder an inforce illustration. That would be 500,000 inforce illustrations that the home office would have to manually run each year. Sound like it’s not humanly possible? Let’s look beyond this assumption.

Imagine the complete irresponsibility of simply telling policyholders that their policies are under-performing, and not providing them with ways to course correct. That alone would generate tens of thousands of calls from panicked policyholders into a carrier’s call center. So providing policyholders with options is a must. For example, can they reduce their face amount or add premium to extend the policy years farther into the future? We factored that it would take an additional 8 inforce illustrations for each policyholder to provide these critical options. You did that math correctly: this would mean running 4,000,000 inforce illustrations (500,000 policyholders x 8 illustration options each) to accomplish this task- daunting at best! 

Why It Needs to Be Done…Now

Our industry has had over 6.6 billion dollars in class action suits over the last several years for improperly informing their policyholders of this ticking time bomb. It’s time we solve this problem. It’s our fiduciary responsibility as an industry to meet policyholder expectations.

We at iPipeline have a solution for this industry-wide dilemma- it’s innovative, avoids the financial burden of rewriting all of a carriers’ legacy inforce illustration software, and makes the task far more approachable.

I’m very passionate about this topic, and I’m looking for your thoughts as well. 

On Demand Webcast

How Our Robots Ran 30 Million Illustrations in 24 Hours

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Last year, our industry ran 400 million illustrations for permanent life insurance, 95% of which ended up in the trash can. Agents and their back-office staff wasted thousands of man-hours a week generating 10-20-page PDFs that are seen by a client. Why the insanity? It’s not because the insurance commissioner tells us that we have to do it this way. It’s because of the way insurance agents sell.

When agents meet a prospect for the first time, they typically don’t know the details of the prospect’s insurance needs, medical background, or price tolerance. Consequently, they pre-run multiple illustration scenarios to provide prospects with various options.

They do this in advance to avoid the clumsy nature of running carrier illustration software in front of a prospect. This madness will seemingly never go away as long as clients want options, illustrations software remains complex, and agents desire a smoother selling experience.

What if an agent could go out in the field with no paper illustrations, avoid dozens of confusing PDFs, and clunky illustration software, yet still react quickly to client curve balls…

How? iSolve.

iSolve teaches robots how to pre-run millions of illustration scenarios each month and stores these calculations in a massive online database. iSolve then wraps an intuitive user-friendly interface around these pre-run calculations, allowing an agent to use their smartphone, tablet, or laptop to instantly display various product options.

When the agent has met the client’s product and pricing expectations, the agent simply clicks a button and an NAIC-compliant illustration is rendered for all parties to e-Sign. iSolve also integrates directly into iGO e-App, making it simple for the agent to digitally apply for coverage.

As a life insurance agent that founded iPipeline over 20 years ago, I know what it’s like to be in the field with clients, and how much of an obstacle illustrations scenarios are to rapidly moving sales. Alongside my colleagues, we have developed this new illustrations innovation, iSolve, to provide digital access to infinite illustrations for a possible sales scenario. No more “wouldn’t it be nice if…” Just 30 million pre-run illustrations right at your fingertips.

Did I pique your interest? Explore the power of iSolve in my OnDemand webinar.

The Secret to Increasing Agent Adoption of e-Apps

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There’s no sense in sugar-coating it, paper applications are a huge impediment to digitizing the insurance industry. To reach the level of modernization taking place in other verticals, it’s critical to shift the agent from paper to a digital experience. Nowhere is this need more prevalent than in the realm of final expense, where there is a large volume of applications, mostly on paper, for small premium and commission.

What’s holding us back? Why does the industry continue to use paper when e-Apps exist? Simply put, the issue lies in agent adoption. An insurance company can spend thousands of dollars modernizing their legacy systems, but it’s all for naught if agents continue to submit applications on paper.

Why aren’t they adopting e-Apps that seemingly provide them with an enhanced selling experience? We usually hear the excuse that these agents are older – and so are their customers – insinuating that neither party is technologically-savvy enough to submit an application electronically. We’re not buying it.

In 2018, agents have technology in the palm of their hand that allows them to complete any daily task within minutes, and they’re taking full advantage of that ability. They’re depositing checks, paying bills, ordering tickets to sporting events, and using google maps, all from their phone. They’re tech-savvy enough in their personal life, so there must be another reason they won’t leverage technology in their workday.

What we’ve found is that paper better serves them when they’re out in the field, especially when selling Final Expense policies. Paper doesn’t rely on a Wi-Fi connection. You don’t need a power cord to fill out a paper application. And paper surely doesn’t require you to sit around waiting for the applicant’s wife’s social security number, all for a low commission sale.

How do we get these agents to change their behavior and adopt a more efficient, cost-effective model, when paper gets them out the door swiftly? We need to give them a WiIfM – a “What’s in It for Me?” – and significantly enhance their experience enough to abandon the perks of paper. If we can offer agents the WiIfM, insurance companies can reap the benefits of modernization.

We recently worked with a Final Expense carrier that knew this problem well. Their agents were submitting 100,000 applications a year, all on paper, and spending an additional $50 for third-party call centers to gain voice signatures. That’s $5 million dollars a year in call center fees, and countless hours of rework for the agent.

But these Final Expense sales are valuable money that agents don’t want to leave on the table. They want that sale, so how do we create a digital experience that appeals to the agents more than paper, reduces overhead, and promotes modernization for insurance companies?

The first thing we did was removed the need for a Wi-Fi connection, by building a mobile-friendly e-App that operates on cellular data. This allows the agent to utilize their data-capable phone or tablet to complete knockout questions and finalize the policy application. No need to bring a laptop. No need for a Wi-Fi connection.

Second, we eliminated the costly, process-slowing call center. Built-in e-Signature capabilities let the applicants sign on the agent’s phone and authorize the release of FCRA records with the swipe of their finger. Our mobile solution will call out to third-party data providers to retrieve the client’s motor vehicle records, prescription history, etc., while the agent continues to fill out the insurance application on that same device.

But as we know, it doesn’t excite an agent to put things In Good Order. Speeding up the application process and reducing overhead is great, but we had to give the agents more, something that makes it worth their time to complete the application correctly. Where is their WiIfM?

It’s in instant decisioning. Our philosophy is “know before you go”. We want the agent to know the medical decision before they walk out of the prospect’s door, saving them another possible on-site visit and hours of back-and-forth to get an application completed sufficiently enough to go to underwriting.

To make this possible, we integrated our instant underwriting solution into our mobile e-App platform, allowing agents to receive a decision before they leave the first sales meeting. They can complete a Final Expense application, have it underwritten, and collect payment all in one meeting. That’s not doable when working with paper.

Fortunately, we’re no longer reliant on paper, or even a WiFi connection, to complete a Final Expense life insurance sale. Even more importantly, agents have their incentive to adopt the technology that helps you move your business into the 21st century. No more NiGO applications. No more WiFi passwords. No more call centers. No more second visits. No more outdated processes. No more struggle to get your agents to adopt technology. Know before you go.