Canada Life's 'click-and-buy' process for individual protection is bringing life applications closer to those for motor and home insurance. We talk to Jon Ford, the firm's director of individual protection, about bridging the protection gap.
Somerset's Jon Ford has worked for Canada Life for something like 30 years, initially developing the firm's group risk corporate business before more recently moving into the sales and distribution of individual protection.
An outdoors-type who as a teenager almost went on to play professional cricket for his home county (in the footsteps of Ian Botham), these days - rather than from the strip - he is hitting a six for his team by streamlining the technology underpinning Canada Life's personal protection offering.
After investigating the application process for life in November 2015 (after Canada Life announced its return to the individual protection with four life plans in August 2015), Ford noticed that while there was plenty of customer interest - often where big life events had "nudged" newlyweds and recent parents into buying insurance - there were clear signs that applicants were dropping off the process in worrying numbers.
"A lot of customers were coming through and searching for protection but that purchasing journey was very cumbersome," he tells COVER Magazine. "So the area we focused on most was making that purchasing journey much simpler for them."
Ford's feeling was that while there is no doubting a protection gap where individuals lacked an awareness for protection, the real cause for concern were those showing interest in getting cover but being put off purchasing it.
The solution was to incorporate UnderwriteMe technology into the Canada Life's individual protection application process, something we previously reported on HERE.
"Basically it meant that a customer and distributor could go onto their comparison site and essentially complete a very intuitive application upfront; get a guaranteed price and be able to buy there and then," Ford points out.
Not only did this help people engage with the application process, it also allowed Canada Life to speed up their efficiency internally, allowing it to quickly grow what is traditionally a slow-moving area as a new line of business.
"With effectively a blank sheet of paper, we didn't have any legacy issues," adds Ford.
The application process
In theory, each application presents a series of check-pointed pitfalls which have the potential to put a customer off completing a process.
Whether that is a disrupted online journey - for example, users being forced to switch sites - or price-points accumulating unexpectedly, the main factor putting off applicants would generally be uncertainty playing on customers' minds, believes Ford.
In practice, it was advice from LifeSearch and Cavendish that helped Jon clean up the process for both the end-user and intermediary.
Essentially it's about keeping the customer in one place and ensuring that the outcome is a positive, reasonable one for the customer, he says.
"There is no jumping onto any other websites, you just get your guaranteed price, click and buy," says Ford. "It's a click-and-buy process."
As a result, 80% of Canada Life customers can now expect an instant price quote, with the opportunity to make an immediate purchase at the end of a "straight-through process", that is "easy to do business with" and "touch free for us", he says.
Not only that - the money saved on operational costs can be put towards offering more competitive premiums or invested into other parts of the back office process.
One area within which a "buy now" option is often unavailable - about 10% - 15% of applications - is where there is some degree of medical underwriting required for the policy.
In order to quicken this up and keep the customer in control of the outcome, Ford decided to remove the requirement upon them to provide the most typical piece of medical evidence: the GP report.
"We thought about the customer and the fact that inherently the GP reports are poor quality and lack timeliness - and completely outside the control of the customer buying the product," Ford explains.
To side-step the often time-consuming and unpredictable GP reporting process, the customer is now given the option of undergoing a tele-interview (carried out in-house) or a physical health screening instead, once the application is completed.
Rather than GP consent holding up proceedings, this can allow applicants to determine their own destiny as to when they get an answer, while also allowing Canada Life gather the information it needs from an underwriting perspective.
Another discovery from using the UnderwriteMe technology for individual protection was the opportunities it offers from an auditing perspective.
Where answers are being revised or amended during the application process, combined with carefully worded questions and information gathered from telephone conversations, patterns of customer behaviour start to emerge.
"It's a good risk control for us," says Ford. "The beauty of technology is that you can pull all sorts of management information from the process.
"For example, if you can see that over the past 10 applications there was a trend for questions being revised a number of times over the space of a couple of hours, that might be a warning sign."
Such insight has allowed the insurer to gain a better understanding of "grey areas" when it comes to distribution, while also allowing it to inform the quality of the protection.
Canada Life's overall goal is to provide a buying process for life that's closer to that of motor or home insurance, albeit with a more detailed underwriting process to fit the needs of the individual.
A partnership with Money Supermarket, for example, has allowed greater penetration into the market, while intermediary adviser support from, say, LifeSearch can ensure the cover offered is best suited to the customer.
The goal is to help bridge the protection gap in this country while making individual protection much more profitable for the firm.
"This investment in technology has given us more confidence," concludes Ford. "If we can remedy that customer journey, distributors will re-engage, because the drop-off rate and time to set these policies up can be massive."
As a new player to the market without any legacy issues, it's an offering that Ford believes is uniquely competitive.
But are there plans to offer income protection or stand-alone critical illness cover?
"Until the relationship between individual income protection and universal credit is understood we have no plans to launch individual income protection," is the firm's official line.
"We are completely comfortable that both the critical illness and term assurance we've got are where we need to be today," adds Ford.
However with the UnderwriteMe technology scoring runs, COVER Magazine expects it won't be too long until Canada Life expands its individual protection offering further.
The Association of Medical Insurers and Intermediaries (AMII) readies annual general meeting for 14 March in Milton Keynes
New subgroup focused specifically on insurance technology and innovation in London
Slowdown linked to austerity and NHS neglect, academics argue
The Institute of Risk Management's (IRM) Internal Model Industry Forum (IMIF) has published its eighth guidance document for the insurance market