Going Green in Life Insurance

Stack of Paper | Source: striatic on FlickrIf you’re looking for businesses that are strong candidates to go green, you might put the life insurance industry near the top of the list. With no physical product being produced, what is there to consume? You might be surprised.

The amount of driving, the number of couriers, and the stacks of paper needed to complete one sale is astounding. Every time someone buys life insurance and they fill out a hard copy of the application, the agent has to make a copy. It then has to be couriered off to the insurance wholesaler who takes another copy before sending the original file to the insurance company. If the selling agent is meeting with the client face to face then it adds another car to the road.

So what’s keeping the insurance industry from becoming better stewards of the environment? Motivation. Most insurers are fine with the status quo and don’t appreciate the savings of going green. Here are a few things that could help this industry go green.

Ditch the Car

Life insurance brokers spend a substantial amount of time on the road meeting clients face to face. But all of that driving may not be necessary as most of the work can now be done over the phone. I’ve already moved to this business model, although it has a few differences. First, some consumers still want to see the sales agent in the flesh. Second, there are a few regulatory compliance issues that make face-to-face dealings easier, although brokers can overcome compliance and regulatory concerns with a bit of work.

Work Remotely

I have associates in other cities who also conduct their insurance business over the phone rather than in person. It’s cheaper and your associates will appreciate having to spend less time in their cars. More importantly, technological changes like the growth in VOIP are allowing more flexibility with the way they work. For instance, we’re implementing a VOIP phone system that will allow us to give a local phone extension to an associate based almost anywhere else in the country.

Paper Cuts

Some government regulations require original signatures on documents, but everything else can be easily stored electronically. The biggest barrier to this is finding a decent in-house system that can store these records on a reasonably permanent basis and the willingness of insurance companies to accept electronic copies. I’m testing a software system that will integrate our client records, email, and phone system and hope to have something running in the next year. Nevertheless, this level of integration is still not robust or fully accepted. Still, cutting back on paper will be a welcome change, not only for the savings, but to eliminate the towering filing cabinets and to improve customer service.

Switch to low power computers

Office computers are rarely turned off any more. Depending on how many machines you have running their power draw can be substantial. We’re in the midst of replacing our computers with some of the new low-power variety and moving our phone system computer to a low-power multimedia PC. We’ve also plugged almost all of our computers into a power bar, which allows us to turn off everything except the basic computer each night (i.e. the printer monitor and all peripherals get turned off. The computer itself stays on due to overnight backups).

Life Insurance Companies

In my experience, life insurance companies have done very little to go green externally. But there are several things that they could do. For instance, they could put all forms online as fillable PDFs and accept faxed/emailed copies and signatures. If they did this, it would virtually eliminate the need to print anything—by both the broker and consumer. They could also allow brokers to work with clients in a non-face-to-face fashion. Many companies still won’t allow this. Yet today, few life insurance companies have fillable PDF’s. Most require the broker to print out the PDF and complete it by hand, starting a long chain of print and copy actions.

Deliver Policies as a PDF

Insurance policies are still couriered to the wholesaler, then to the broker, before they are delivered to the client. All those transportation and printing costs are incurred simply to provide consumers with something they can hold in their hand. We don’t get hard copies of our master auto insurance policies, why do we need it for life insurance? A faster and less expensive approach would be to simply email a secured PDF copy of their life insurance policy. Doing so would lower printing and courier costs, and cut days off the time it takes to issue a life insurance policy.

In the end, the wheels grind slowly in the life insurance industry. The U.S. is a few years ahead of Canada on this with some brokers already having distributed call centers and some insurance companies going mostly electronic. The life insurance industry in Canada is behind the curve, but hopefully it will get there in the coming years.

This is a guest post by Glenn Cooke, a life insurance broker who does business online and over the phone. His website is LifeInsuranceCanada.com.

Editor’s Note: Great post Glenn! I think you’ve really hit the mark with your comments about moving from paper to PDF in the insurance industry. I would love it if my insurance providers would give me everything electronically. I also find I get needless amounts of fairly useless mail from my existing insurance providers which could be cut down. 

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