Straight Through Processing

The Independent Challenge

Scott SinclairExecutive VP & Chief Operating OfficerTransamerica Life Canada

Advisor and Client

DistributorCLIENT SIGNS PAPER APPLICATIONMost advisors spend 70% of their time completing paperwork

Carrier

Paramedical

ADVISOR DELIVERS APPLICATION TO DISTRIBUTORAverage 2 to 5 days to deliver Application to Distributor

Current Life New Business

DISTRIBUTOR’S MAILROOM RECEIVES/SORTS

DISTRIBUTOR KEYS DATA INTO SYSTEM

DISTRIBUTOR SCANS OR PHOTOCOPIES

Current Life New Business

Carrier

Advisor and Client

Distributor

Paramedical

DISTRIBUTOR SENDS BACK TO ADVISOR IF NOTIN GOOD ORDER / MISSING DATA – 50-70% of time

ADVISOR SENDS BACK TO DISTRIBUTORDOCUMENTS IN GOOD ORDER

DISTRIBUTOR ORDERS PARAMEDICALS IF REQUIRED

DISTRIBUTOR COURIERS APPLICATION TO CARRIER - Usually 5 to 7 days from time of sale

Current Life New Business

Carrier

Advisor and Client

Distributor

Paramedical

CARRIER RECEIVES APPLICATIONOn average 20-30% not in good order

CARRIER OPENS AND SORTS MAIL CARRIER RECEIVES PARAMEDICAL RESULTS10 days on average from sale to appointment to complete

CARRIER KEYS DATA INTO UNDERWRITINGAND ADMINISTRATION SYSTEMSCARRIER SCANS APPLICATIONCARRIER UNDERWRITES RISKCARRIER ISSUES CONTRACTCARRIER COURIERS CONTRACT

TO DISTRIBUTOR

DISTRIBUTOR MAILS CONTRACT TO ADVISOR FOR DELIVERY TO CLIENT

CARRIER PAYS ADVISOR AND DISTRIBUTOR COMPENSATION

Current Life New Business

Carrier

Advisor and Client

Distributor

Paramedical

INDUSTRY AVERAGE TURNAROUND = 36 DAYS

Current Life New Business

Carrier

Advisor and Client

Distributor

Paramedical

Imagine A World...

Advisor and Client

Distributor

Paramedical

ADVISOR COMPLETES ELECTRONIC APPLICATION WITH CLIENT

ADVISOR SUBMITS APPLICATION ELECTRONICALLYTO DISTRIBUTOR AND CARRIER – 100% in good order

ADVISOR SUBMITS PARAMEDICAL REQUIREMENTS ELECTRONICALLY

PARAMEDICAL PROVIDES RESULTS TO CARRIER

Carrier

CARRIER UNDERWRITES RISKCARRIER ISSUES CONTRACTCITS FEEDS BETWEEN CARRIER AND DISTRIBUTOR

CITS FEEDS BETWEEN DISTRIBUTOR AND ADVISOR

CARRIER PAYS ADVISOR AND DISTRIBUTOR COMPENSATION

INDUSTRY ESTIMATED AVERAGE TURNAROUND 24 HOURS – Subject to Paramedical and APS

Building the faster future... Drop Costs... Drive Sales

Imagine A World...

Advisor and Client

Distributor

Paramedical

Carrier

What’s Unique for the Independent Channel

1. Advisor Focus / Engagement

http://www.cliedis.ca/summit/CLIEDISSummitAdvisorSurveyResults.pdf

2. Common Capture and Delivery Platform

3. Standards – Shared -CITS

What’s Unique for the Independent Channel

• Does Not Include Points of Competition

– Product

– STP – Straight Through Processing

– Automated Underwriting

– Electronic Statements etc.

Straight Through ProcessingA Career Sales Force Perspective

Norm LeblondDirector – Technical UnderwritingSun Life Assurance Company of Canada

Current State

• 128,000 Life Insurance Applications– 20-25% Preferred

• 28,000 Critical Illness Insurance Applications• E-App Penetration Rate 99%• 40% of Non-medical Cases Accepted Electronically

– 15-20% of All New Business Applications

• 70-80 Underwriters• 40% of Accepted Cases are Auto Mailed

Looking Back 15 Years

• Strictly Life Insurance Sales– No Critical Illness, No Preferred

• 120,000 Applications Submitted Annually• E-App Penetration Rate 96%• 50% of Non-medical Cases Accepted Electronically

– 35-40% of All New Business Applications

• 25-30 Underwriters• Policies Produced, Checked and Mailed Manually

Back to the Future!

• Enjoy the Benefits of Straight Through Processing – Less Touches – Decreased Turnaround Time– Increased Speed of Issue– Increased Placement Rate– Quality and Consistency of Underwriting

Opportunities

Increase Straight Through Processing with:• Changes to Underwriting Requirements• Underwriting System Enhancements

– Include Preferred Criteria

• Integrated Tele-underwriting• The Ability to Improve Use of Current Resources

– Vendors – Off-Site Underwriters

Non-medical Requirements

• 30% of Applications are Available for Straight Through Processing

Add Vitals and Labs

• Potential to have 84% of Applications Available for Straight Through Processing

Add Integrated Tele-underwriting

• Potential to have 99% of Applications Available for Straight Through Processing

It’s Not Easy!

• Important Things to Consider:– Time to Market– Cost/Benefit Analysis – Expertise Required– Large Scale Impact of Errors/Omissions

In Conclusion

While it may not be easy, everyone can benefit with straight through processing.

For Sun Life’s Career Sales Force….it’s the way of the Past, the Present and the

Future!