Novice insurance agents mistakenly believe that once they “sell” an insurance policy to a client, their work is complete.  Most insurance sales people equate “selling” an insurance policy with obtaining a completed application.  In the novice’s mind, all they have to do is send in the application and the insurance company will send them their commission check.

However, more experienced insurance agents, or any salesperson for that matter, realize a sale is consummated only when commission checks are deposited into the salesperson’s bank account.  With insurance sales, particularly life, health, and annuities, completing a signed application means that the insurance agent is still less than 50% of the way towards earning a commission check.  It is at this point in time the real problems begin.

Let’s take a look at life insurance for a minute.  When a client applies for a policy of say, $500,000, the client is asking the insurance company to bear the financial risk for supporting his/her loved ones should the applicant die prematurely.  Insurance company’s primary purpose is to bear the risk for most cases.  However, the insurance company wants to make sure it is an acceptable risk, right?  After all, as a consumer, you NEED and WANT your insurance company to be profitable, so you know they are there for you when you need them to be.

Therefore, insurance companies require additional information from applicants other than their insurance application.  Often, insurance companies require the applicant to complete a phone interview, paramedical examination (blood, urine, ecg, etc.), provide medical records, just to name a few of the most common underwriting requirements.  Most often, the insurance agent or the GA is required to facilitate the retrieval process.

Another prime determinant on the insurance agent getting paid their commissions is the amount of time it takes for the insurance company to approve and deliver the client’s insurance policy.  Industry statistics show that the longer it takes for an application to turn into a policy, the more likely the client is going to back off on the deal.  In fact, the likelihood that an application will turn into commission checks for the agent decreases exponentially over time.

For that reason, it is imperative for insurance companies, GA’s, and insurance agents to get applications approved and “out the door” as quickly as possible.  Remember, insurance companies want acceptable risk clients on their books as quickly as possible, for if an applicant withdraws his/her application, the insurance company not only loses in terms of investments it has made in underwriting the application, but also in future revenue.

Since most insurance agents work with multiple insurance companies, the problem with keeping up with each client’s application status is compounded.  Doing so requires the insurance agent to invest considerable time navigating to each insurance company’s website portal, logging in (hopefully remembering their username & password for each company), and navigating to pending case status updates.  Should the insurance company provide a status update that requires action on the part of the agent, the agent knows to quickly satisfy all outstanding requirements.  

This doesn’t sound so bad, does it?  Well, if you are like me, this process can take approximately 30 minutes per day.  That’s 2 ½ hours per week, 125 hours per year, or 15 full working days per year.  The sad part is that more often than not, case status has not changed on a daily basis which means that the insurance agent is investing his/her time looking to “see” if any change has been made, when more often than not, it hasn’t.

A rough analogy to what our software will do for insurance agents is what TweetDeck (www.tweetdeck.com) does for people using Twitter & Facebook.  TweetDeck is a software application you can download directly to your computer.  When someone you are following on Twitter posts an update, you are automatically notified on this software.  In addition, you can post updates directly to Twitter, and even shorten URL’s directly within the software.  Similarly, when your friends on Facebook post updates, you are automatically notified on TweetDeck.  This saves you the time and trouble of logging in to each of these services, and searching to see if any updates have been made.

SuranceBay’s software for insurance agents will work under the same premise.  If an insurance company makes an update to the status of an agent’s pending case, the insurance agent will know about it.  No more navigating multiple carrier websites, no more bothering overworked GA case managers, no more clogging carrier phone lines … just a simple repository to manage all aspects of an insurance agent’s business.  Welcome to Insurance 2.0 with SuranceBay.

This is but one of the many problems SuranceBay will address, more to come in future articles.