Gardner on Going Paperless

How to Increase Insurance Sales by Going Paperless

How to increase insurance sales by going paperless – Lessons learned from insurance brokers.

Caller: “Hi, I’m looking to purchase home insurance.”

Agent: “No problem, I’m sending you a quote right away.  Just print it, sign it and fax it back.”

In this post I would like to highlight a critical, strategic, benefit from adopting paperless processes – an increase in revenue and sales.

In the past year I have been working with several large and medium-sized insurance brokers who were looking to improve their bottom line through process automation.  They had each invested in sophisticated software for quote generation and document management, and yet, these brokers were faced with a similar problem:  how to convert more QUOTES to DEALS.  They were losing potential clients after delivering a quote to the client, often after the client had agreed to purchase the product.

An analysis of their existing sales process showed that, despite their high level of internal automation, the sales transaction itself was paper based – prospects were asked to print, complete, and return forms and documents.

This paper based process made the sales transaction longer.  An average insurance transaction would take 4-5 days to complete (from the time the prospects verbal acceptance was obtained).  The prospect would not have access to a fax; they would send the documents by mail; they would forget about them altogether, and so on.

A longer transaction meant that prospects had more time seeking quotes from other brokers, especially ones that they could meet face-to-face as a walk-in, and conclude their business on the spot.

The insurance broker/agent was at a disadvantage once they had delivered the quote or the documents to the prospect.  They had no control over the transaction, no visibility, and no clear understanding of when (or if) the transaction will close.

After implementation these brokers were able to conclude a sales transaction in 45 minutes.  This included document presentation to the client, obtaining their electronic signature and any supporting information they would need to provide, and forwarding the signed document to their back-office system.

Agents were able to conclude a transaction while they have a prospect on the phone, controlling the situation and guiding them through the document completion process.  All the client needed was an Internet browser and email access.

The result was a decline in the abandoned deals rate our clients experienced.  To put this in perspective – a 30% decline in abandoned deals translates to tens of thousands of dollars per month in additional revenue.  If they were quoting 500 deals a month, and closing 300, at an average deal size of $700, the additional deals closed by going paperless translates to 30% x 200 x $700 = $42,000/month in additional revenue.

Impressive.

So, what are the lessons we learned from our insurance clients?

(a) Time kills deals.  The longer it takes to complete a deal, the higher the abandonment rate is.

(b) Control over the sales process is critical.  If you leave it to the client, you may never see them again.

(c) By going paperless you could close business while you have a client engaged on the phone.  Rather than deliver quotes you could be closing deals.
Going paperless has a direct (and significant) impact on the bottom line, enabling you to generate more revenue by making it easier for your clients to do business with you.  Add to that the inherent cost savings of paperless transactions and the environmental benefits, and you truly benefit across the board.

Guest post written by Oren Friedman.  Oren works with TELUS Communications to deliver TELUS Secure Contracts (a branded version of Recombo’s Agreement Express to businesses across Canada.)