For many business sectors, going paperless is a major efficiency initiative – and insurance is no exception. So why wait? Perhaps it is tradition, or misinformation, or just momentum. Let’s look at some facts.
Tangible benefits from virtual documents ….
E-commerce – including electronic contracting, electronic signatures, electronic delivery of documents, and retaining electronic records in place of paper records – automates and expedites business processes. The process can also cut operational costs and improve efficiency and collaboration. Importantly, e-signatures bring great improvements to the customer experience with a simpler way to complete paperwork on a PC, smart phone or tablet.
What about compliance and legal issues?
Naturally, there is resistance to ditching the pen for digital. But questions about the law have been addressed. The Uniform Law Conference of Canada adopted the Uniform Electronic Commerce Act (UECA) in 1999. Subsequently, laws that include rules for the use of legal, secure electronic signatures have been enacted throughout the Canadian provinces. In addition, there is the Federal Personal Information Protection and Electronic Document Act (PIPEDA). According to the Office of the Privacy Commissioner of Canada, “the Act seeks to put electronic and paper media on an equal footing.”
Most often, pushback is based on uncertainties about legal compliance and security concerns. But according to Daniel Fabiano, partner at Fasken Martineau DuMoulin LLP and author of the advisory report on electronic signature and delivery commissioned by the Center for Study of Insurance Operations, these concerns are counter-intuitive. “There are obvious and powerful advantages to e-commerce – including the potential for heightened compliance measures and increased security. A well-designed e-commerce regime can address risks and mitigate them.”
And security concerns?
There is a lot of confusion – between SSAE16/SOC 1 and SOC 2 specifically – about what can attest to the security of a system. SSAE 16/ SOC 1 focuses on controls over financial reporting, while SOC 2 focuses on the security controls across a service company’s technological and operational environment. When considering e-signatures, SOC 2 is the certification that matters.
In addition to ensuring the security of the data center and the e-signature system, insurance companies and brokers need to be certain they are implementing an electronic signature application that is built on digital signature technology. This combination makes the e-signature reliable and helps strengthen enforceability. To make the e-signature ironclad, you need to address:
- User authentication to reduce fraud and ID theft. Verification can be made through traditional login or password, secret question and answer, SMS code or a third-party authentication service.
- Document security. Digital signatures placed at every signature in the document produces a tamper-evident seal and a reliable audit trail of how and when the document was e-signed and by whom. If someone attempts to make an unauthorized change the document and e-signatures are marked as invalid.
- Process evidence to prove what took place throughout the progression of the workflow. This is accomplished by recording the web pages, documents, disclosures or pop-up windows that were displayed; emails or SMS messages sent; any voice or image capture; IP addresses and the time and date of each event.
Now, to the heart of the matter ….
While security and compliance are of the utmost importance to the insurance industry, an e-signature solution also needs to make a positive impact on customer experience and support the way brokers work. This is possible with a flexible e-signature solution that can adapt to the environment in which it is being used – in-person, at a point-of-sale, or remotely over the phone/web.. Without this, goals for adoption will be compromised.
Also, if signers need to jump through hoops to identify themselves, can’t print before signing, or are required to install software, they are more likely to abandon the process before the transaction is completed. A good electronic signature solution built on digital signature technology allows brokers to invite customers, to review, accept, and securely e-sign documents from any web-enabled device (computer, tablet or smartphone) at any time.
So, why wait?
The technology to mitigate risk and improve the customer experience isn’t on the horizon – it is here. The time is now to move forward into the digital age. We have developed an ROI Calculator to show how a clear e-signature strategy opens the opportunity for increased revenue, improved customer loyalty, and lowered operating costs.
Editor’s Note: Michael co-founded Silanis more than 20 years ago. Today he is
responsible for planning and growth strategies for product marketing and
product management
Very good article. If the direct writers have been eliminating signed applications and streamlining the customer experience for years, Brokers need to get on board with similar processes. The directs would not have continued with processes that are flawed or that cost them money / added risk. The customer makes the ultimate decision and they will choose the person easiest to deal with.