An organization that promotes technology standards for the life insurance industry is calling on senior executives from Canada's life and health insurers to attend a summit meeting aimed at developing an industry-wide electronic transaction technology solution.
CLIEDIS (the Canadian Life Insurance EDI standards) has scheduled a working meeting for industry executives on Jan. 26 in Toronto. The goal of this meeting is to develop a cost/benefit statement for the industry for straight-through electronic processing of new business and eventually other kinds of transactions.
Such a solution could save a great deal of money and time now spent processing insurance business, says Byren Innes, an executive member of CLIEDIS and Senior Vice-President and Director of NewLink Group. He told The Insurance and Investment Journal that one insurer representative who is a CLIEDIS member, estimated that his company alone could save in excess of $10 million annually on processing if it could receive applications electronically versus on paper. This member extrapolated this figure out and estimated savings at $200 million if new business e-transactions were implemented across the industry.
Mr. Innes added that not only would costs be lower, but there would be huge benefits to the industry from electronic processing in terms of data accuracy and customer service. He said that the cycle time is now 36 days on average for a life insurance policy, but much of this time is spent in data entry, going back to get answers to unanswered application questions, etc. "If we can get rid of all that back and forth in communications...
then that 36 days can collapse down to a much, much smaller number and advisors could get policies issued faster. So, a really huge opportunity here from a customer satisfaction point of view and a great economic benefit for the entire industry."
The life insurance industry has been widely criticized for lagging behind other industries in the area of technology (See Nov-Dec. 2009, p. 26).
However, Julie Parrott, Executive Director of CLIEDIS, told The Insurance and Investment Journal she believes the industry is now ready to make the leap to electronic information exchange. "We are all really excited. I am looking forward to 2010.."