Paper is Prologue: 4 Reasons to Go Paperless

Many insurance agents can recall the daily endeavor of picking up the phone to a customer, listening to their request, putting them on hold, getting out of their seat, visiting the filing cabinet and pulling the relevant file in order to service their account.

Some agents will also remember the slogan “Paper-Free in ’83,” which, despite some progress, is still a long way from fruition.

In the old days, “there was paper for everything,” says Patricia Lamb, president of Select Insurance Services Agency Inc. in North Royalton, Ohio. “We’d do paper applications, paper forms—you name it, we used paper. We even used paper when a file was taken out of the folder to make it easier to refile the file—that’s just the way agents did things back then.”

About five years ago, Lamb’s agency made the decision to “pull the switch” and say, “OK, now we’re done with paper,” she says.

The first step was hiring a high-school student to scan the backlog of files into a content management system to digitize the mass of paper files that engulfed an entire room at the agency. “And then we started the shred process,” Lamb says. “We are now paperless and very happy to be more efficient.”

Currently, 58% of personal lines agencies and 46% of commercial lines agencies are paperless—an increase from 46% and 38%, respectively, in 2016, according to the 2018 Future One Agency Universe Study. But considering the benefits of recalibrating your relationship with paper, those figures seem low.

If yours is one of the agencies that isn’t yet paperless, here are four reasons why you should be.

1) Agency Efficiency

When intentionally implemented, an abundance of non-paper technology—such as e-signature, fillable PDFs, agency management systems and downloadable applications—can improve productivity and free up time and money for agencies to grow their business.

“The impact is huge,” says George Page, Jr., president of Page Insurance in Guilford, Connecticut. “Many moons ago, we had many more people doing the same amount of work. It’s definitely cut down on staffing.”

When Page took the reins of his agency 11 years ago, “I came in and said, ‘All the paper has to go—we’re going electronic,’” he recalls. After digitizing the necessary files and implementing processes for scanning, storing and eventually shredding almost every piece of paper in the agency, Page and staff have been able to take things a step further.

“We’ve built some forms in-house that allow us to collect enough information in the fewest steps possible and complete each transaction in a simplified manner,” he explains. “It’s huge from an underwriting perspective.”

With home renewals, for example, “we have an online form that we request people to fill out every couple of years that captures information like updates to the roof, heating, plumbing, electrical and any other changes,” Page says.

The time savings of going paperless are perhaps best demonstrated in the process of getting that all-important signature. In the paper world, getting a signature from a client on a new account and receiving a completed agreement via postal mail could take up to 11 days, according to a case study conducted by RightSure and DocuSign.

While email invariably made signing off on a policy easier, it still relies on printing and scanning the policy and mailing it or arranging to meet in person, and requires agents to follow up multiple times to get the deal done. Now, thanks to e-signature, that 11-day turnaround time can be cut down to 48 hours, according to the RightSure and DocuSign study.

“It’s a much easier, cleaner process,” says Jamie Wiecks, commercial sales manager, Financial Services and Insurance, DocuSign. “It’s faster and it’s a better experience for the customer.”

The benefits of using e-signature service vary, “but typically, what we find is that folks are saving a number of hours per week,” Wiecks explains. “Freeing up that much time adds up tremendously over the course of a year—time that agents can spend helping customers or selling more policies.”

2) E&O Protection

Paperless agencies are also “much less error-prone,” Wiecks says.

For example, taking a handwritten form or application and rekeying the information into an AMS or quoting platform opens up ample opportunity for “misspelled names or addresses, or anything that can have a big impact down the road and take a long time to correct,” Wiecks explains.

By contrast, using easily fillable online forms that “flow automatically into whatever storage system is being used” not only speeds up the process, but also improves accuracy, Wiecks says.

Ironically, eliminating paper from agency operations enhances the all-important paper trail. Via a fool-proof process, well-trained staff and a reliable agency management system, digitalizing client records and making a note of every interaction in their online file provides better documentation—and therefore enhances errors & omissions protection.

“Our AMS is our official company record,” says Angelyn Treutel Zeringue, president of SouthGroup Insurance Services-Gulf Coast in Bay St. Louis, Mississippi. By dumping paper, the agency has “improved our E&O documentation. We now have a more complete profile on every client with consolidated financial and policy data, claims history and reporting capability.”

Furthermore, as long as the AMS is backed up to the cloud, “another advantage is the protection of our data in the event of a catastrophe such as a fire or hurricane, because wet or burned paper is worthless,” Treutel Zeringue points out. “As long as we have an internet connection, we can access our electronic data from the moon if we need to.”

The best part about being a paperless agency is “having a centralized digital location for all scanned information and notes for carriers, vendors, employees, accounting, prospect information, and all client documentation that creates a permanent audit trail and enhances your profitability and professionalism,” Treutel Zeringue adds. 

3) Millennial Appeal

As consumers whose insurance needs are getting more complicated with age, millennials want to work with an insurance provider that provides simple digital functionality and personalized service on demand, according to the results of a Bain & Company survey of more than 174,000 insurance customers.

The survey also revealed the one thing millennials don’t want: tons of paperwork.

As an industry, “we need to be more aggressive in our processes in making sure that we adapt to millennials,” says Steve Anderson, insurance industry thought leader on technology, productivity and innovation, and president of the Anderson Network.

“There’s no question that that as the age of an organization’s clients go down—and ultimately it will, because if it doesn’t, that means they’re not growing or adding new clients—there are going to be a lot of different digital expectations,” Anderson says. “That’s where millennials live.”

According to the results of the Bain & Company survey, millennials are also more likely to choose and remain loyal to an insurance provider that appears to align with their social values, such as on topics such as climate change and environmental responsibility. “That’s absolutely a factor,” Anderson says. “An email signatory you see often is ‘Think twice before printing this email to help the environment.’”

4) Customer Service

While the paper-free model creates significant cost savings by eliminating purchases in areas like paper, mail, postage, printers and fax machines, one of the biggest ways going paperless transforms an insurance agency is improving customer service.

For Lamb, the decision to shelve the old system in favor of a paperless approach means that any time a customer calls, “everything is at your fingertips,” she says. “In the old days, it was not unheard of to have to call the client back to get the answer they needed—there was a lot of back and forth.”

One of the key reasons agencies push back against adopting paperless methods is in defense of their clients, citing the common catchphrase, “Our clients don’t want this.”

However, in 2018, more agents than in 2016 agreed that insureds are just as likely to accept e-documents as paper (44% compared to 35%), according to the 2018 Agency Universe Study—a figure which is sure to continue increasing in the future.

Often, it’s not customer demand but rather an agency’s management practices that stops the presses when it comes to switching to a paperless model. “Most of the grumblings we had were probably from myself,” reflects Lamb. “But the switch is easy to do, and I think it’s the way you communicate it with the client that counts. They were fine with it.”

That’s not to say every customer prefers to do things via email and e-signature. “I think you have to be flexible,” Page says. “It is easier to service the client if you can communicate and get things to them by email, but we’ve got a mix of clients here, and one size does not fit all.”

In insurance, “which is and always will be a relationship business,” Page says, is there any danger that going paperless could turn the buying process could into a nameless, faceless type of service?

“If you use technology to enhance customer service, you’re doing exactly what you need to be doing,” Page says. “But if you’re using technology just to make your job easier, you’re looking at it in the wrong light.”

Will Jones is IA assistant editor.

Paper Cuts

With every major sea change come a few creases that need ironing out. While paperless agents no longer need to put a client on hold while they pull their file, one thing that might slow them down is finicky, confusing or just badly designed rating and quoting systems.

“The technology that companies roll out and require agencies to use is hit and miss,” says George Page, Jr., president of Page Insurance in Guilford, Connecticut. “There’s a gap between the technology we can control here and the technology that’s being controlled on the other end. There are always issues, and there are certain companies that will only provide support if you open a ticket or email.”

Additionally, if an agent mails a policy using the USPS, there’s a long-standing legal presumption that it gets delivered. But “when we talk electronic policy delivery, one of the issues is verification that the email was received,” points out Steve Anderson, insurance industry thought leader on technology, productivity and innovation, and president of the Anderson Network.

“That presumption we have with mail is not yet carried over to electronic delivery,” Anderson adds. “There could be some issues related to an audit trail that the electronic message was actually received.” —W.J.