Online applications speed up payments

The technology bubble and all the enthusiasm about how the online world is going to change business processes has passed and is almost forgotten now. Gone too are the buzzwords like B2C (business-to-consumer) and B2B (business-to-business). Instead the buzzwords and enthusiasm are being replaced by practical solutions which work.

This is all part of the realisation that the Internet isn't the goose which is going to lay a whole lot of golden eggs for entrepreneurs, rather the internet and the development of e-commerce are tools which enable people to better run their businesses. The internet, and all its various bits and pieces, whether they be email or websites, allow people to do their jobs more efficiently and at a lower cost than in the print world.

The financial services industry has already been a major benefactor of electronic solutions, partly because it is an information hungry industry.

Some processes, particularly on the investment side of the business have benefited significantly to date. Research houses no longer have to cut down forests each year to send updates on funds to their subscribers. Likewise, much of the data, whether it is performance or client specific data is available electronically.

On the insurance side of the industry the books which had all the rate details for policies have been abandoned for electronic packages which are supplied to advisers on CDs.

The next development in the insurance industry is the advent of online application forms. Cigna, one of the small players, was the first in New Zealand to go down this route several years ago. It is now being joined by AIA.

AIA, which is a bigger player in the local life market than Cigna, is currently rolling out its online application service.

The system is relatively simple in concept and is designed to streamline the application process. Instead of filling in lengthy application forms, which are then posted to the company and the data re-entered into its system and then passed onto the underwriters for consideration, advisers fill in an electronic form which is emailed to the company.

Under this system, the process is faster, applications are more accurate (as the company does not have to re-enter the data off the form, and there are cost savings in printing, posting and paper.

Christchurch-based adviser Cam Bailey, who has trialled the AIA system, says the main benefit is that it makes the application process much faster, and the company pays him more quickly than it does under the paper-based system.

Bailey believes that more companies will start using electronic tools in their businesses to improve processes. Because there are gains for the company, such as faster turn around, less staff intervention, and lower costs they will push advisers to use them. Possible incentives include faster and bigger commission payments.

He likes the system and says that at this stage there aren't huge productivity benefits for him, as he still collects the data on paper, then gets a person in his office to enter it on the electronic form.

Generally, he doesn't do the data entry on the application form on the computer in front of the client. The main exception to this situation is with young clients that are likely to be 'clean skin' applications - that is ones where there are no pre-existing conditions.

While the AIA system is one of the first in the market place, online application forms are likely to become the standard practice in the future. Whether advisers like the idea or not, it is likely to become the norm over the next few years.

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