Leveraging Legacy

To meet new challenges in the marketplace, it’s time for traditional insurers to implement non-traditional options.

By Bryan Padgette | January 28, 2021


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A recent article by The Wall Street Journal  highlighted the move of two companies – Bestow, Inc. and Dayforward, Inc. – into the life insurance business, not just as sales platforms, but as carriers.  They are endeavoring to start from scratch, completely rethinking what life insurance is and how it is sold and administered. This presents a conundrum — how are these new companies able to launch with such ingenuity, agility and speed, while established insurers who deeply understand every aspect and nuance of the business are either stuck in “contemplation” mode or handcuffed by their legacy systems and don’t know where to start. 

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In truth, the news is good for legacy insurers.  McKinsey & Company points out that, “Customer demand is at an all-time high. Indeed, the COVID-19 pandemic has only reemphasized the need for mortality protection. Public pension replacement rates are declining, and healthcare expenditures are rising—trends also accelerated by the COVID-19 crisis. Economic and demographic trends will also offer tailwinds. The global middle class is rapidly expanding, bringing higher incomes, growing financial wealth, and heightened risks to manage.” 

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So why does it seem that the industry, as a whole, is lagging behind on using these opportunities that McKinsey identifies? As an established digital enabler for the life insurance industry, Sureify has worked with carriers large and small to develop digital capabilities that are needed to thrive in the world today, and we’ve got some specific answers, as well as some ideas that will help traditional model insurers rise to meet this new challenge.    

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“Existing infrastructures supporting our longest-standing life insurance carriers don’t need to be completely leveled and rebuilt from scratch to meet the expectations of the modern consumer. In fact, eliminating the advantages of history would be a serious tactical error. Instead, legacy insurers need to adapt a start-up mindset to bring something new, fresh and groundbreaking to rival the convenience offered with the upstarts mentioned in the WSJ article.”

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First, though – a quick look at what we see holding the life insurance industry back from realizing digital potential:

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  • Legacy environments and underwriting processes, and outdated policy admin systems.

Even digital solutions imported through forward thinking platforms don’t always integrate smoothly, and the patched-together processes still require people to manage and troubleshoot. As Novarica discovered, “From a technology standpoint, trying to leverage existing legacy environments to support new products, services, and markets is deemed to be ineffective.”

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  • Perceived distribution issues related to agents’ willingness to embrace technology. 

These concerns are largely unnecessary – LIMRA finds that “Two thirds of young advisors aged 40 and under are quick to adopt new technology when available.” Novarica echoes the value of technology to the agent distribution model: “If servicing can be made easy using technology, it allows more time for sales—so both the carrier and agent win.” 

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  • Belief that becoming, or building, a digital company is an “all or nothing” proposition.

Many life insurance leaders believe they must go full-throttle into the new world of digitally-enabled D2C offerings, instead of seeing the building process as a series of small steps like research, internal brainstorming and enlisting guidance from 3rd party problem solvers.

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  • An interest rate environment that has made it difficult for insurers to invest in “re-imagining” business practices

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  • A legacy mindset, especially at the senior level.

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As we watch digital capability transform industry after industry (retail, banking, real estate and communications to name a few), it should not be difficult to convince the C-suite at the most historically significant insurers that life insurance should be next in line. But to many senior level managers, digital advancement and a shift toward convenience to remove friction from the customer experience may feel like a denial of the value of legacy.

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Clearly, the old ways of thinking and doing things will have to be addressed, especially as all insurers compete for the new generation of buyers, who are used to the convenience of digital capability in all things. However, convenience is just one of the four main drivers of a life insurance purchase. The other three – price, rating and brand confidence – cannot be matched by these start-ups. 

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It is time to re-evaluate the “weight” that holds back too many life insurers. Carriers in 2021 must realize the power of the cards they bring to the table, including: 

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  • A 360-degree knowledge of the industry and best practices
  • Relationships with state regulators
  • An often decades-long proven history
  • Broad advertising and public relations exposure
  • Existing expertise in areas necessary to grow and transform
  • An established reputation that often reaches beyond the marketplace for insurance coverage
  • The financial wherewithal to be innovative

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Sure, the newer life insurance carriers are brash, bold, creative thinkers who are turning a rather conservative industry on its head. But they cannot yet lay claim to these incredible advantages many of the old guard possess, including a solid A.M. Best history, ledgers full of loyal customers, or a brand name known globally for service and product excellence. 

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What this means is that the existing infrastructures supporting our longest-standing life insurance carriers don’t need to be completely leveled and rebuilt from scratch to meet the expectations of the modern consumer. In fact, eliminating the advantages of history would be a serious tactical error. Instead, legacy insurers need to adapt a start-up mindset to bring something new, fresh and groundbreaking to rival the convenience offered with the upstarts mentioned in the WSJ article. But there’s the rub – it will be necessary to bring in a new way of thinking to build a new product, underwriting, administration, and distribution systems. This new way of thinking may not merge well with existing company technology, human resources and ingrained hierarchies.

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In truth, no good argument can be made for not forging ahead with thinking differently to capitalize on the immense value of history, legacy and reputation. After all, a customer will likely be more comfortable buying protection from a company with a strong 150-year history than from one that has existed for only five years with a significantly lower financial health rating!

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Bestow and Dayforward have been able to address some issues by separating themselves from the historic precedents of the industry. However, these carriers, with their new frameworks, impressive digital capabilities and slick customer experiences, do not have the size, reputation and financial firepower they need to “move the needle” to provide the broader market with life insurance protection. 

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For traditional life insurers who want to stay ahead of the new digital-only players, here are six steps that must be taken:

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1. Don’t “think outside the box” – create an entirely new box within the box.   

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Too many insurers see the way forward as modernizing legacy systems with technology that makes it possible to do business in an omnichannel manner. While the repair/reinvention of processes, systems and the customer experience is a positive step into the digital landscape, it may not leverage advantages like name recognition, brand familiarity, a legacy of good will, and a strong, knowledgeable distribution force. This version of re-imagining what already exists will likely not be enough to take on the new entrants to the life insurance space, who are unbound by traditional methods 

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Rather, it could be time to consider building a new box inside the legacy box.  

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As an example: selling current products in new ways isn’t enough to contend. Instead, it’s time to consider new products – ones that are less reliant on the interest rate environment and on the customer profile data from a time gone by. Thanks to tech and its greatly-enhanced ability to analyze data, new products will be able to meet much more specific demand. And the public relations gained as a “first in” leader in novel product development can go a long way toward building awareness.  

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This new way of thinking must receive support from the highest levels of the organization. The strategy cannot be driven by middle management. Creative, forward-thinking leaders within the organization and leveraging the positive aspects of the larger entity, this “box within the box” can truly drive innovation.

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1a.  …but keep what works. 

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A separate company with a familial lineage has built-in trust. It’s difficult to put a value on such an important asset. Leveraging the parent’s brand in new ways (“Insureco Direct,” for example) can infer newness while assuring target audiences that this new endeavor has big brand support.

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2. Assess the true investment necessary to enter the new space.

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The prospect of cost, time and effort required to rethink any long-established business model seems overwhelming. As technology gains ground exponentially, the cost of digital enablement decreases (thanks to low code/no code options and scale of interest), and a new generation of digital creators and thinkers becomes available to simplify the customer experience, the necessary investments may not be as prohibitive as one would think, and should not be a significant roadblock to moving ahead.

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3. Build a culture of fearlessness.  

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The companies who will lead the industry through the next decade are those who embrace change. In an article entitled, “A Growing Urgency for Change in the Life Insurance Industry,” Boston Consulting Group notes the importance of this new way of thinking, saying, “A corporate culture that embraces change is a prerequisite if life insurers are to make their businesses meaningfully more customer-centric. That begins with having the right people across the organization—be they specialists in data, analytics, or digital technologies—who can thrive in a company built around responsiveness and flexibility.”

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The team assembled to develop and create the new model should be comprised of people with fresh perspectives, and those who are open to possibilities. The ability to think differently, to question the way things are done and to look at what’s being created across other industries will be important characteristics in the leaders and builders of any new digital endeavor.

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4. Turn traditional models and methods upside down.

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One of biggest hesitations holding back the traditional life insurance industry is a reluctance to re-imagine how business can be conducted. As mentioned earlier, distribution is one important example. Digital as a direct channel for lead generation, and the new digital enhancements that are available to any sales force today should be embraced in the new model. These enhance the agent experience and make the process of offering life insurance easier and more productive.  According to McKinsey, “Growth has been a long-standing challenge for U.S. life insurers, and changing customer behaviors is yet another obstacle to growth. However, these changing behaviors represent an opportunity to rethink distribution in ways that meet the needs of customers and address the economic challenges associated with traditional agent-based distribution. Carriers that succeed will be well positioned to capture tremendous growth, improve profitability and provide comprehensive solutions to consumers, many of whom are underserved today.”

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Of course, distribution is just one area of opportunity. Data-driven underwriting, self-service capabilities, non-traditional claims payments … all of these are areas ripe for re-imagination.   

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5. Ask the important questions.

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Introspection and exploration are the keys to seeing the potential value in a D2C offshoot. Some thoughts to investigate:

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  • What is life insurance? What role does it play in people’s lives? (Talk to people in different age groups about what they believe life insurance is, or more importantly, what they wish it was.)
  • Understanding the low margins of traditional bond investing, what risk environment can be created so profitable business can be written?
  • Can lower reserves be held by re-thinking what a death benefit is and how and when it is paid?
  • Can technology allow for resources to be better invested in people and processes?  For example, are money and resources being used in places that don’t ultimately lead to a customized experience?  
  • What new, and more affordable, tools are available for profiling applicants? How can they be used to minimize marketing and acquisition costs? 
  • How can products be priced creatively based on how and when the death benefit is paid?
  • Where is our target customer? Can we meet them where they are?
  • How can we best create breakthrough marketing messaging while leveraging the reputation of the larger entity?

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6. Embrace new technology across the board — but don’t rely on it exclusively.

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A big advantage that Bestow and Dayforward are bringing to battle is the technological advances that are inherent in these business models. In relying on technology, however, they may be missing the most important part of the life insurance experience – the actual human connection. It is the piece of the puzzle that can be approximated digitally, but will never be truly replaced.

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LIMRA, in a report titled, The COVID-19 Effect: High Tech with Human Touch to Optimize Life Insurance Customer Experience, noted that, “…a big part of the value that insurers are gaining from technology has come from the “assist” it’s giving to financial professionals. If technology can help make life insurance easier to understand, less trouble to apply for, and quicker to get, it will be a dramatically better experience for customers.” In other words, technology cannot replace a real human interaction. The quest for answers, the emotion involved in considering why a policy is necessary, the relief of knowing coverage is provided – these are benefits that only a mature, established, trusted community of insurers can offer.

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It seems clear that this new guard of life insurers about whom the WSJ writes isn’t going away anytime soon. If anything, even minimal success in the digital carrier channel will encourage others to venture into the market. That means that, to survive and to thrive, traditional insurers will have to face this competition head-on. It’s going to take a complete re-imagining of life insurance to stay agile and competitive – but the incumbents of our industry, with their built-in advantages of experience, financial firepower, branding and reputation, are up to the task. 

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Existing infrastructures supporting our longest-standing life insurance carriers don’t need to be completely leveled and rebuilt from scratch to meet the expectations of the modern consumer. In fact, eliminating the advantages of history would be a serious tactical error. Instead, legacy insurers need to adapt a start-up mindset to bring something new, fresh and groundbreaking to rival the convenience offered with the upstarts mentioned in the WSJ article.

Life Insurance Technology In 2020 Was Driven By Simplicity And Data

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By Ken Leibow

Published in Broker World Magazine January 1, 2021

 

We all had to adapt to change beginning nine months ago with the pandemic. A distributor’s Agency Management System (AMS) must improve its quality of service for agents/advisors, field underwriting (exams) needs to be safe, and turning Inforce data to action is critical for advisors to manage their client’s policies. Here is an inside look on how life insurance solution providers adapted and innovated to these new challenges in 2020.

 

 

Agency Management Systems Essential for Distributors during COVID

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Life insurance distributors in the USA and Canada faced the same challenges during COVID in 2020. I reached out to Equisoft whose Agency Management System (AMS) is the most widely used in Canada for life insurance distributors, and it is also available in the USA. I also met with OneHQ whose modern, easy-to-use CRM/AMS gained momentum in 2020.

 

David Nicolai, vice president, Insurance Solutions at Equisoft explains how back office automation is essential for servicing their advisors, “How do distributors stay relevant in times of accelerated change? That’s a critical question we’ve heard distributors ask so often over the past nine months. The answer, for some, is that it has been difficult—to pivot quickly and execute on a new value proposition that will enhance their ability to attract and retain the best advisors—if they are still running their business with manual, largely paper-based processes. There’s too much drag in the system. Innovation, no matter how creative their thinking is, will be hard to implement. On the other hand, we have clients who went from 100 percent paper-based to almost entirely automated and digital when they implemented the Equisoft/centralize agency management system. That made all the difference. When COVID hit and distributor staff, advisors and clients could no longer meet in person, their transition to the new reality was almost seamless. App processing, advisor communication, inforce services—all continued at pace because they didn’t rely on paper and mail. Clients received the support they needed in difficult times. Advisors appreciated the service and value their distributors were able to provide in helping them continue to meet their clients’ needs.”

 

Meeting with Brett Barker, Senior Account Executive at OneHQ, he provided not only information about their AMS, but client experiences during 2020. Tailored specifically for insurance distribution, OneHQ is an extremely powerful yet easy-to-use system. It’s highly configurable, replacing disjointed systems by bringing the CRM, AMS, and Compensation together plus integrating all other systems into one place. Brett explained, “Our user-friendly interface and personalized modules help give each department a dialed-in system to maximize results. As an example, a OneHQ customer recently made the move from their legacy system to OneHQ because their back office and sales teams had very little communication between systems. Wanting more data visibility for sales and back office efficiencies, the team moved to OneHQ and for the first time in years they had access to all of the information they needed within seconds. In the end, sales activity increased 20 percent and OneHQ’s innovative platform is providing better service to agents by freeing up the back office teams from running reports and answering questions.”

 

With the changes brought about by COVID-19 and more focus on how technology can impact sales internally and for their agents, OneHQ has witnessed a tidal wave of new clients. Their modern technology that focuses on increasing sales without sacrificing service is giving their clients an edge during these rapidly changing times. Brett continued, stating that OneHQ is increasingly seeing more of their clients beginning to offer their agents a full technology strategy starting with the CRM that integrates with their back-office system. In addition, this also makes the IMO much “stickier” with their agents. To sum it all up, Kyle J. Ginavan, CEO, OneHQ, said, “There have always been many good technology options available to insurance agents, but never a full technology strategy. While the securities industry has well-thought-out technology strategies for financial advisors, insurance distribution has typically lagged in this area. However, with COVID, we’re certainly starting to see that change.”

 

 

Exam Safety: Simplifying through Innovation

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Underwriting is key to the life insurance new business process. For term insurance, a drop ticket with an exam still dominates the higher percentage of cases in 2020. Paramed exam companies are the front lines for underwriting. I reached out to Ryan Janeway, founder and CEO of MediPro Direct. Ryan explained that at this stage of the pandemic, protecting field medical teams and applicants requires access, innovation, and adaptation. Said Janeway, “Very few companies are positioned as effectively as MediPro Direct to actually improve customer experience during this crisis. MediPro Direct founded Vanguard Genetics LLC in 2015 to gain access to clinical and genetic testing services that can aid underwriters in policy-making decisions now and into the future. Under the current circumstances, our clinical lab association has provided immediate access to necessary PPE, as well as rapid COVID antigen testing to ensure the safety of our customers and team.”

 

As innovators, the teams at MediPro Direct and Vanguard Genetics helped bring rapid antigen testing to market and are now validating saliva test collection methods to simplify the collection process for these tests. Additionally, their teams have reduced manufacturing costs by up to 70 percent in order to dramatically improve public access to testing—which, combined with the distribution of vaccines, are key to getting customer business and lives back on track. Under proper credentialing, these tests can be used in the office and in the field to help ensure safety during insurance exams, clinical trials, and other medical interactions. MediPro Direct has adapted to the current environment by creating unique tools and processes such as its Tier1 Network™, to increase examiner coverage for carriers, its Quality First™ system to dramatically improve access to real-time quality data for carriers, and its RemoteID™ system for scaling and improving tele-interview processes without the need for fixed call centers.

 

 

Inforce Policy Data Turns to Action

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As the digitization of the life insurance industry persists, the concept of shared visibility of data is becoming more relevant. Shared visibility of information across distribution partners helps to keep carriers, BGAs, and advisors all aligned on what’s working as it should and what areas have room for improvement. When it comes to inforce policy management specifically, that shared visibility is especially important. But timely exchange of information is not enough to satisfy a proactive, compliant, and efficient inforce management strategy.

 

Visibility of inforce data alone is table-stakes. As you continue to seek ways to not only differentiate but also provide more value to your distribution partners, you need a way to make that data and information you share with each other actionable. That’s where a platform like Proformex comes in as the right partner for you and your community. Proformex connects visibility to efficiency, simplicity, and opportunity. By aggregating data and giving everyone access to it—their platform takes that data and provides you with powerful analytics and insights that you and your distribution partners can use to make data-driven decisions that produce real-world outcomes. And there’s no manual burden involved; by automatically surfacing both risks and opportunities to you and your distribution partners, you’ll now have the ability to proactively manage potential problems and seize revenue-generating opportunities. It’s a win for everyone, from carrier to client.

 

Simplifying the life insurance new business experience impacts agents, distributors, carriers and consumers. Mining and analyzing life inforce data and turning it into action creates new sales opportunities for advisors to engage with their clients. COVID obviously accelerated innovation in life insurance technology in 2020. For those solution providers that have adapted and taken on the challenges head on with new innovations, they will have staying power in our industry moving forward in 2021.

 

Proformex and NAIFA Partner to Protect Consumers of Life Insurance

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CLEVELAND, Ohio – August 18, 2020 – Proformex, creator of a proactive life insurance policy monitoring platform designed to give insurance agents, advisors and fiduciaries better oversight and visibility into the performance of inforce life insurance and annuities, today announced its newly-established partnership with industry giant, NAIFA (National Association of Insurance and Financial Advisors).

 

NAIFA is the leading association for life insurance and financial producers in the financial services sector. They provide ongoing educational materials, advocate for a positive legislative and regulatory environment, and promote ethical conduct and best practices among advisors. Through their partnership, Proformex and NAIFA will support these initiatives with a variety of activities enabling NAIFA members to automate difficult and time-consuming tasks, while meeting RegBi compliance standards which ultimately protect consumers.

 

“Protecting NAIFA members and their clients is paramount,” said David Morris, CMO of Proformex. “By leveraging our technology that automates the painful, tedious tasks associated with ongoing inforce policy management and providing the most accurate reporting and analytics, advisors can uncover opportunities which better serve their clients ever-evolving goals and needs, while potentially increasing their own growth. Proformex combines as-sold data with illustrations, statements, and other key information to create a single location for all inforce policy data and analytics.”

 

Brian Steiner, NAIFA’s VP of Business Development and Partnerships, echoed Morris’s sentiments: “We are excited about this opportunity to partner with Proformex and help bring their transformative product to the forefront of our industry. Any time we can leverage a leading tech solution like Proformex that helps our membership work more efficiently and effectively, comply with our industry’s most stringent standards, and grow their business, it’s a win for everyone. It’s especially relevant right now during COVID-19 and our current economic downturn; having a system like Proformex allows our members to mine their book of business for new opportunities.”

 

NAIFA members can join in on the first educational webinar in the monthly series on August 19, 2020. For more information, visit either organization’s website.

 

About NAIFA

Founded in 1890, NAIFA is the oldest, largest and most prestigious association representing the interests of financial services professionals from every Congressional district in the United States. Our mission – to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members – is the reason NAIFA has consistently and resoundingly stood up for financial services professionals and called upon members to grow their knowledge while following the highest ethical standards in the industry.

 

About Proformex

Proformex is the leading inforce management platform offering data aggregation, analytics, and portfolio monitoring for life insurance and annuities. The platform is purpose-built to help advisors, GAs/BGAs, IMOs, financial institutions, settlement companies, and broker-dealers protect their clients’ best interest and ensure regulatory compliance by monitoring individual policy performance, identifying at-risk policies, and uncovering new sales opportunities. Our automated solutions make inforce management more efficient, more profitable, and results in better experiences for policy owners.

 

Media Contacts

David Morris

(855) 341-1331

dmorris@proformex.com

 

Suzanne Carawan

703-770-8402

scarawan@Naifa.org

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Proformex and Ensight Team Up To Transform Life Insurance Inforce Policy Monitoring

Proformex

Ensight’s API platform advances transparency and oversight for insurance agents and financial advisors

 

CLEVELAND, Ohio – August 12, 2020 – Ensight, the leading life and annuity digital sales acceleration platform for insurance carriers, distributors and financial professionals, today announced it has partnered with Proformex, the market-leading inforce management platform.. The company will integrate Ensight’s quoting API platform to enhance Proformex’s intelligent inforce policy monitoring, which provides insurance agents and financial advisors better oversight and visibility into inforce policy contract performance.

 

The partnership is part of Proformex’s strategy to simplify the complexity and challenges of managing inforce business at scale, while providing actionable insights for its customers. Integrating the Ensight Quoting API enables Proformex customers to evaluate potential protection options for their clients during the policy review process without ever leaving the Proformex platform. The result is a solution that saves time and enhances overall policyholder service.

 

“We’re excited about our partnership with Ensight,” said Mike Pepe, Founder and Chief Strategy Officer of Proformex.“The ability for our customers to access automated product quoting from Ensight directly in the Proformex platform is gamechanging to make policy reviews fast and easy for our customers. This relationship strengthens our mission of being a partner across the life insurance ecosystem while we reimagine how all policies are serviced after they’ve been sold.”

 

As Best Interest (BI) regulation continues to extend into the Life and Annuity market, ongoing policy servicing becomes increasingly important to complying with fiduciary standards. Over time, a policy’s death benefit, cash value performance and net surrender value can be negatively impacted by a range of factors. It is increasingly critical that financial professionals monitor a client’s overall policy health and, when necessary, compare the inforce policy against new potential protection options in the marketplace.

 

Ensight’s life insurance API provides access to the broadest number of life insurance carriers, products and product classes in the US life insurance industry today. The Ensight API supports over 22 leading life carriers, 200 products, and has the ability to quote across product classes (Term, GUL, Whole, IUL, VUL) for a common case design. It is also the only API able to support platform partners seeking to meet the emerging BI requirements.

 

“Like Ensight, Proformex is a leading insurtech enabler helping transform a critical area of the life insurance policy lifecycle. While we focus on transforming the sales experience, from illustration design to advisor-client discussion at the point of sale, Proformex is enabling customers to securely store, manage and analyze their entire inforce book,” stated Bill Unrue, CEO, Ensight. “We are thrilled to partner with Proformex as they transition the industry from reactive to proactive inforce policy monitoring.”

 

About Ensight™

Ensight™ is the leading cloud-based insurance sales acceleration platform for more than 500 Life and Annuity distributors, thousands of financial professionals, as well as many of the largest North American insurance carriers. Headquartered in San Diego, California, Ensight helps drive sales growth and productivity, while addressing the entire sales lifecycle experience – from prospect to policyholder, new business to inforce.

 

To learn more about Ensight at https://www.ensightcloud.com/. 

 

About Proformex™

Proformex is the leading inforce management platform offering data aggregation, analytics, and portfolio monitoring for life insurance and annuities. The platform is purpose-built to help advisors, GAs/BGAs, IMOs, financial institutions, settlement companies, and broker-dealers protect their clients’ best interest and ensure regulatory compliance by monitoring individual policy performance, identifying at-risk policies, and uncovering new sales opportunities. Our automated solutions make inforce management more efficient, more profitable, and results in better experiences for policy owners.To learn more about Proformex at https://www.proformex.com/.

 

Media Contacts

Ensight

Trish DaCosta

KCD PR

Ensight@kcdpr.com

 

Proformex

David Morris

Chief Marketing Officer

(855) 341-1331

dmorris@proformex.com