What e-fits you

After years of promises and false hopes, the life insurance industry is finally hauling itself into the 21st century. There are now e-commerce solutions for IFAs who want to write term assurance and critical illness (CI) electronically.

But are IFAs ready for e-commerce? Results of a survey conducted among 200 IFAs in November and December 2001 are compelling.

According to the research, 79% of IFAs believe it is important or very important to their company's image that they appear progressive and involved with e-commerce and 92% have access to the internet.

A total of 80% believe that speed is important when online applications are processed and 83% would use online processing for clients with a clean medical history. Almost 60% of IFAs prefer an offline disconnected solution, although 65% would use an online process if this resulted in a quicker decision. Meanwhile, 81% believe it is important to track the progress of a term assurance application.

Since launching online life cover in February 2002, we found that around 500 cases were received in the first week. This clearly demonstrates that IFAs are ready for e-commerce and have the technical capability to transact electronic business.

Can product providers help?

But are product providers ready and able to offer your business an e-commerce solution? To give an answer we need to take a step back and look at the wide variety of ways that IFA businesses provide advice and products to their customers.

When visiting clients in their homes, IFAs may collect information about them through the paper fact-find, using technology to assess customer and product needs in the back-office, and often by making recommendations by means of a second appointment.

Meetings with customers may also take place in the office where access to technology is readily available and software is used to fact-find, assess and recommend the right mortgage and associated life insurance and critical illness product.

Alternatively, the IFA business may operate using the telephone, providing advice or executing product sales on the back of a marketing campaign.

Finally, some IFAs may wish to link their website to product providers who can provide customers with the ability to quote and apply for term and critical illness cover.

What is clear is that no single e-commerce solution fits all. To be at the starting blocks, product providers need to offer a choice of different solutions to meet IFAs' needs. It is therefore the provider's job to ensure that advisers can choose the functionality that most closely fits their individual requirements.

The offline approach allows for completion of the electronic proposal form while remaining disconnected to the internet. This means you can complete the form from any location at any time and at your own speed, inputting data once into the fact-find and pre-populating the e-commerce proposal form and only connecting to the internet when you are ready to send the form to the product provider.

The online approach means you complete the form while you are connected to the internet. Some providers offering this approach provide immediate cover for clean cases, meaning you can take a customer from comparison through to quote, application completion and get the policy put on risk in one seamless process.

A customer-facing version of the connected or online life and CI proposals is also available. This has been designed to sit on IFA websites, so clients can come directly into their website ' attracted by conventional or web-based advertising ' and quote and apply for online cover as an IFA customer. The proposal would then be sent electronically to the product provider with immediate cover being approved for clean cases.

Use the table (left) to find the e-commerce route that will best suit your business.

Why e-commerce?

So why should advisers use e-commerce to apply for term and critical illness? The arguments are compelling. Benefits can include:

• Instant validation eliminates errors in proposal forms.

• Instant cover for clean cases.

• Instant acknowledgement and in some cases instant details of the plan number.

• Instant proposal tracking via the insurer's extranet.

• Inputting data once and pre-populating into the proposal form.

Some providers also offer commission enhancements for quoting ' using external quote platforms ' to produce term and mortgage life or CI quotes. Other providers offer specific enhancements for submitting business using e-commerce.

We are operating in a rapidly changing market, where customer demands and expectations are ever-increasing and where the industry is trying its best to meet Government and consumer challenges on charges, access and terms.

To meet these demands we have to take costs out of the business and become slicker in the way we operate.

More importantly, we have to recognise that in the future, e-commerce is likely to become the only way to compete and trade profitably for providers and IFAs alike.

The challenge for product providers is to provide the IFA market with e-commerce solutions that meet IFAs' differing needs. A range of solutions are already available in the market and we fully expect companies to continue to develop e-commerce capability and solutions over the next few years.

For advisers, the challenge is to look at business processes and work in partnership with providers to see how the many benefits of e-commerce can help them improve their business.

Keith Simm is a product manager at Norwich Union