Federated Insurance
January 2016-April 2016
Calgary, Alberta
Federated Insurance, like many insurance companies, operates primarily on paper-hard-copy, relying on traditional signatures when binding new business. This leads to an intensive administrative load, opening the risk of human error, negatively impacting both the company and the customer. An insurance company is unable to completely predict client losses in each fiscal year, despite risk management analysis and loss prevention education. The singular desire that remains common across all insurance companies is that for a combined ratio below 100%, ensuring they remain profitable. To compensate for potential losses, it became evident that costs could be eliminated in controlled areas like operational expenses. As a national direct writer of property and casualty insurance, Federated Insurance aims to be on the leading edge of policy offerings driven by their close relationships with policyholders.
By creating an e-commerce optimization strategy, we were able to lower the expense ratio and capture sales on a faster business cycle. Elimination of the administrative drag is of particular importance with Federated's focus on small business, which leads to a very large group of potential customers but also smaller premium sizes, making cost management essential.
Assessment
The first step required was a full assessment of resources available as well as the current processes in place that happen over the course of engaging a potential customer, to binding a policy to providing the coverage when an incident occurs. Working with the Small Business and National Accounts teams, any solution would have to offer a broad enough scope to suit the needs of both teams.
Process
I strongly believe in shadowing to understand what a user is experiencing and where frustrations arise. It became clear that the greatest challenges emerged out of the paperwork required in binding new business. Particularly due to Federated's emphasis on value over lowest price, a slow sales cycle can lead to clients second-guessing their commitment or delay in binding due to incomplete or lost paperwork.
E-Commerce Technology
The last five years has seen growth in e-signature adoption across the insurance industry for both brokerages and insurers. This move has come in the wake of other highly regulated industries choosing to go digital. The Centre for Study of Insurance Operations (CSIO) released an advisory report on e-signatures in 2013, finding conclusively that this technology is a necessary and vital step forward for the industry.
Process
Research regarding how other industries manage their documentation and sales cycle revealed an uptake in e-signature technology. By introducing a digital process of handling paperwork, it seemed apparent that the reward had the opportunity of far out-stripping the risk.This would lead to more complete paperwork and eliminate the need to keep paper files on site, mitigating the risks of theft or other damages to records.
Choosing a Platform
There are six key decision-making criteria when considering an e-signature platform. Utilizing software created by a security company is more viable than building in-house. When evaluating platforms, one must consider the following: flexibility (platform must be capable of growing alongside the organization's needs), white-label branding (allow company branding to eliminate consumer awareness of third-party applications), ease of use, audit trails (integrated into the document containing an indestructible record), integration (adapt the platform to Federated's unique needs to ease of integration) and automation (eliminate as many manual processes as possible).
Process
This process led to the evaluation of multiple providers based on the six criteria. I also felt it was a priority to ensure that the provider house their cloud storage within Canada to prevent sensitive client information from being stored off-shore. This was essential to ease both client and managerial concerns about moving to a digital system and away from a paper filing system. An assessment was conducted of six potential platforms and an informational relationship was established with sales management. Ultimately, I concluded e-SignLive by Silanis could offer the best fit for Federated's needs.
The Final Product
The E-Commerce Optimization Strategy recommended e-SignLife by Silanis, which can be implemented slowly with incremental purchases, making the risk of investment fairly low for the company. It offers the greatest potential for integration with other systems currently utilized by the company and has actively exceeded the ACORD E-Signature Security Guidelines. It offers a robust system with many options as to how data can be captured. It will lead to a 21 day sales cycle being shortened to minutes, as the majority of that time is spent on paperwork and administrative efforts. Ultimately, it will not only allow the company to bind more business more efficiently, it will also cut down on the many costs associated with a paper-driven company, like printers, ink, postage and more.