The Electronic Signatures in Global and National Commerce Act (ESIGN) was signed into law by President Clinton in October 2000. Now, almost 10 years later, the insurance industry—especially property and casualty insurance companies—have lagged behind most other industries in adopting the use of electronic or digital signatures. As clients and prospects continue to become comfortable with electronic communication, it is important for agents (as well as the insurance companies they represent) to take advantage of electronic signatures in order to streamline the application process.
Agents are increasingly frustrated with having to send applications (either by traditional or electronic mail) to a client for a signature. While the technology for converting any application to an electronic format is readily available, questions about “signing the application” always surface. Continuing to require a physical signature on any document is a huge waste of time.
There are a handful of pioneering companies that are taking the lead in using digital signatures in their insurance e-commerce process:
UPAC Insurance Finance began allowing insurance policyholders to electronically sign their premium finance agreements in 2001 using a technology they developed, called esign-PFATM. UPAC was the first insurance finance company to offer its customers the benefits of electronic signatures. Using UPAC.com, agencies can complete the premium finance cycle—including quoting, funding, billing, and payment—in a totally paper-free transaction process.
Progressive Insurance allows individuals purchasing auto insurance on their Web site to sign the policy application with an electronic signature. To verify that the person on the Web site is actually the person who will be “signing” the application, Progressive uses the individual’s credit report to ask a few questions that only the individual should be able to answer. It is a quick and easy process. Once completed, the individual is taken to a page that also allows him or her to pay by credit or debit card.
Chubb Insurance has created applications for their professional and management liability insurance products that can be completed and submitted entirely online—including an electronic signature on the application. Previously, Chubb’s eApplications required a “wet” signature before a policy could be bound. With the new application process, Chubb has eliminated the need to send a signed, printed copy of the application through the mail. No password or user ID is required to access the electronic applications, which can be completed and saved on the agent, broker, or customer desktop and e-mailed to Chubb for a quote.
While these examples offer a glimmer of light, most insurance companies continue to make excuses for not implementing an e-signature capability. Unfortunately, a new generation of clients is here, and they expect to be able to interact with the insurance industry electronically.
Ten years of waiting is long enough. Both agencies and carriers need to step up and begin creating processes that allow clients to complete entire transactions electronically.
