Transamerica Life Canada COO Scott Sinclair says only one competitor keeps him up at night: Google Inc., whom he fears could remake the Canadian life insurance industry in its electronic image.
“I believe Google will dominate the insurance industry within the next 10 years if we can’t make the transition to a paperless industry,” Sinclair told around 50 financial services industry executives at a TELUS conference on electronic contracts and digital signature technology in Toronto last week.
It’s plain as the nose on Sinclair’s face that the culprit is a 24-page paper life insurance application, and another 100 support forms, that life insurers use to underwrite new policies written up by independent advisors/brokers.
“Google has a better solution, a paperless solution, an integrated solution and they understand their customer,” he told the crowd who gathered to hear a panel of experts from Transamerica Life Canada, HUB International Ontario, Foresters, Recombo and Blake, Cassels & Graydon discuss how financial and insurance organizations can replace paper-based processes with paperless ones to enhance the customer experience while meeting legal, compliance, operational and efficiency requirements.
Sinclair believes chasing sales rather than paperwork is a better use of an advisor’s talents. So Transamerica, a Toronto-based company that markets insurance and investment funds, is saving time and money by accelerating how it underwrites new life insurance policies. It’s doing that by eliminating faxing, scanning and shipping paper documents to/from its advisor/brokers.

Photo: Transamerica Life Canada COO Scott Sinclair
Introducing Electronic Contracts
Transamerica is using an electronic application process that Sinclair is betting will help the life insurance industry win in the emerging digital economy.
How? The e-application aims to shorten sales cycles for insurance advisors so they can close more deals, while underwriters aim to dramatically reduce error and customer abandonment rates, and cut overall operating costs.
Sinclair says the average life insurance turnaround time currently for new client applications is 36 days.
That’s far too long to deliver on a product people would rather not have in the first place: life insurance that pays out to beneficiaries when they die.
With so-called e-applications, or electronically secure contract technology,
Transamerica has got that turnaround time down to four days.
And that’s still too long, Sinclair says.
“Leveraging technology, we’ll reduce the cycle time to two hours and will not use a single piece of cutting-edge technology,” he says, meaning they’re achieveing dramatic productivity gains with available internet-based digital technology, not rocket science technology.
Financial Services See E-App Benefits
It’s not just insurers that benefit from electronic application software.
Going paperless with secure electronic contracts can dramatically change the shape or direction of banks, real estate leasers or any financial services company that prepares and processes contractual paperwork and fears the transformation of Google into a competitor.
For example, a merchant wants to process transactions with Visa, MasterCard and other credit cards using a portable terminal.
So a salesperson asks the merchant to make their way through a swath of paperwork, which is then faxed to the technology provider. Then there¹s data entry, correcting application errors, adjudication and signing off on the application.
Think about it. Time is money here.
The sooner the merchant receives the credit card terminal and can process transactions, the sooner customers with plastic start paying for goods, and the salesperson gets their commission.
The bottom line is paperwork slows down money transfers, the foundation of sales.
E-Banking Goes Paperless
There’s an e-application benefit for banks as well.
You’re renewing your mortgage, and an advisor keys personal data into a computer. And just when you think you’re done, three application copies are printed out. You then sign two copies to be shipped to a service center for processing.
You’re a long way from completing the paperwork and getting an answer back from the bank.
Why? The mortgage application must be checked for errors. Additional supporting forms may be required. The bank may need to contact the applicant for missing information and expect them to print, sign, fax or mail the document back to the processing centre.
Not only is precious time lost here, so too are customers.
Mike Gardner, CEO of Recombo, a Vancouver-based secure contract software provider, says a paperless business drastically reduces error rates, and that improves customer abandonment rates.
The average not-in-good-order (NIGO) rate for paper documents is 40%, he says.
“That means 40% of the time I¹m going back to doing it again. The customer says ‘You’re a fool. Is this how difficult it is to do business with you?’” Gardner adds.
And considering customer abandonment rates are roughly half of an NIGO rate, if you have a 40% error rate, as many as 20% of your prospects may well go elsewhere to buy product.

Photo: David Ebert of Springhouse Investments, Mike Gardner, CEO, Recombo
Why Do Companies Still Use Paper?
All this is obvious. Businesses in a fast-changing digital age have to adapt or die.
But if going paperless saves time and money, why aren’t more companies tossing their printers, faxes, scanners and waste paper baskets? The reality is going paperless calls for far more than introducing a new digital infrastructure.
It calls for a cultural shift. It calls for a company mission, for goals.
And ultimately, it calls for customer acceptance and use of new technology from customers and field sales, to inside sales and head office operations.
“Adoption is absolutely everything in our space. You can create some spectacular technology, but the adoption of the technology is where all the challenges come in,” Recombo’s Gardner says.
Deborah Swail, vice president of business transformation and governance at Foresters, another Canadian life insurance provider, says a better strategy for technology adoption than mandating its use is demonstrating its benefits.
“If you can take advisors from 36 days to getting an answer to them in a day or two, you¹re really speaking their language,” Swail told the TELUS event panel about shortening sales cycles for insurance advisors.
So don’t be fooled by thinking electronic processing is about pleasing head office. Acceptance about going paperless is about addressing issues that concern customers.
After all, customers use digital technology in their own way. And whether that customer is a mutual fund advisor, a mortgage broker or a property rental agent, they’re more likely to go paperless when it seamlessly improves their ability to close sales and boost earnings.
HUB International automated its insurance application process using TELUS’ Secure Contracts technology in part to help its agents reduce unreturned applications because a potential customer typically chose not to scan or fax paperwork to close business.
“From a broker perspective, it’s more the customer experience, that’s the reason for moving forward with this product,” says Sharlene Locke, president of personal insurance practice at HUB International Ontario, an insurance broker.
“Not only did we get some great results in terms of increased revenue and reduced abandonment, it was a great way to organize our producers,” Locke added.
Sales people constantly grumble about paperwork, which keeps them away from the business of boosting sales with faster closing of business.
“This is a great tool for sales people to organize themselves and create an audit trail to figure out where a document is and that shortens the sales process,” Locke said.
Tomorrow: A place to start if you’re new to paperless, and a legal perspective on electronic signatures from Blake Cassels & Graydon.
Etan Vlessing is a Toronto-based business reporter.
Watch this space for more news and information about going paperless at enterprise companies in the weeks ahead. If you’re thinking about starting or expanding a paperless or green initiative at your company and want more information, contact oren.friedman@telus.com