The Phoenix Companies’ (Hartford; annuity deposits of $830 million and $2.7 million in annualized life insurance premium) CIO John Presch’s involvement in distribution technology runs deep. After working at another Hartford-based insurer, Presch began his career at Phoenix 27 years ago in the carrier’s life insurance illustrations area. He went on to manage all field office applications, web development, and later all policy administration platforms. Presch has led the implementation of admin platforms and has helped to steer the outsourcing of two admin platforms to Infosys. Insurance Innovation Reporter recently caught up with Presch, who was named CIO in January 2013, to discuss developments in life insurance distribution technology at Phoenix and the industry at large.

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Insurance Innovation Reporter: How do you determine what distribution capabilities Phoenix needs?

JP: We work very closely with colleagues in our product and operations areas as well as with our Saybrus Partners distribution channel to understand what technology solutions we need to implement in order to address our distribution service and support needs. We collaborate with our business partners on the selection of tools and vendors. We have a really good feel for the needs of our partners in the business area and we take care not to over-engineer our solutions. We find that’s key to efficiently providing the most effective capabilities to enable growth.

IIR: What are producers demanding today in the way of distribution capabilities?

JP: In the middle market segment that we’re in, producers’ requirements vary. Generally they want greater ease-of-doing-business, which translates into a simplified underwriting process and greater access to information. That not only helps the producer to make more sales, of course, but it also helps us to more efficiently put business on our books. So what we want to deliver is as streamlined a straight-through process as we can, with minimal redundancy and reentry.

IIR: It seems that the triad of technology that’s becoming table stakes in the life insurance business is e-application, e-signature and automated underwriting. Would you agree?

JP: Yes, both for ease-of-doing-business and to reduce costs to the insurers. That includes not only upstream from e-app into automated underwriting software, but also automated third-party integration, automated agent/producer validation checks, and, in our case, ultimately integration to our client system and our CSC Vantage policy administration system, which we use for new business.

IIR: What would you cite as some of Phoenix’s most advanced distribution capabilities?

JP: Phoenix was looking for a simplified issue underwriting rules platform that would help us streamline the underwriting process on simplified issue UL, term and final expense life products. We selected and recently implemented LifeSuite from StoneRiver in order to meet our automated underwriting and distribution needs.  We also integrated tele-underwriting into the process in order to further expedite the time it takes to issue a policy, and we are working on implementing voice signature.

IIR: How is Phoenix using e-applications and e-signature?

JP: We have implemented an e-app process for annuity sales utilizing a retirement needs calculator and quoting tool which will pre-populate  the Firelight e-app solution, all from Insurance Technologies. Our plan is to standardize on one e-app solution and are currently planning to utilize the Firelight e-app for life insurance.

IIR: Do you envision these kinds of capabilities becoming standard?

JP: Well, while that kind of processing may be becoming more standard, it’s important to be flexible. Not every producer wants to do business the same way at all times. So we have the ability to either work through the tele-underwriting process or still provide paper applications, according to the producer’s preference. I think that over time, as producers get used to the more automated process and see its efficiency benefits, adoption of automated processes will increase. They can also get a much quicker response on the phone with a tele-underwriter working with our underwriting solution. At that stage, for many cases it is an automated underwriting process, and they can get an answer within 20 to 25 minutes. That makes for a much better experience for the end customer too.

IIR: Do you see a sense of urgency in the industry to adopt these kinds of capabilities?

JP: I don’t see these capabilities as groundbreaking exactly, but rather as the next step in the evolution of how carriers market and sell their products. It enables us in the future to be more flexible as those things continue to change. The idea of straight-through processing is hardly new, but it has taken time for producers and customers to adopt. Life insurance tends to move more slowly than other forms of insurance.  As CIO, you do have to understand the business needs and partner effectively to make sure that you’re implementing the right solutions as efficiently as you can as the market demands them.

I think it’s fair to say that the technologies enabling e-signature, e-app and automated underwriting – and the ability to integrate them with back office processing – has improved over last few years, which is probably responsible for increased adoption. I mentioned earlier these things have been around a long time but they have also gotten more sophisticated. A big part of our responsibilities on the IT side is not only to make sure that the system gets stood up and meets the business’ needs, but also that it performs to the expectations of business partners and customers. Over time the solutions do get more sophisticated and we have opportunities to improve the performance of the software.

IIR: What might be some further advances in the way life insurance is likely to be sold – or bought?

JP: There’s always the direct route, but that brings its own difficulties. One is that you have to spend a lot of dollars on marketing to get people to come to your site to buy insurance. Also, life insurance isn’t a commodity sale as much as other kinds of insurance. It really requires someone to explain what the client is using that insurance for – for example, the client may benefit from different product features or other options, such as a cash value accumulation or more protection. Life insurance can be a complex, difficult sale. One reason that the middle market is underserved is that it takes producers longer to acquire the expertise needed to make those sales. And as we introduce new products, product features and distribution technology, we need to provide appropriate training tools. As new product features evolve and become more standard, producers will adapt, and the technology we can provide them will help. But I think life insurance will still need to be “sold” by producers and the role of technology is to make that sale as easy as possible.