Paperless Savings

The iconic image of a broker’s desk cluttered with stacks of insurance applications, policy wordings and billing statements is quickly becoming a thing of the past. Less paper exchanged among brokers, carriers and their clients means more efficient workflows that allow for real-time, instantaneous transactions.

While the most obvious benefits of adopting paperless workflows are less printing, faxing, scanning and mailing, there are several other important benefits brokers can enjoy by moving to a paperless environment.

With the proliferation of personal computers, mobile devices and the Internet, clients now expect to receive information right away, and having a paperless office is a key element in meeting those client expectations.

Through paperless activities, brokers are able to accelerate their business processes and provide an improved client experience by delivering substantial time savings, thereby helping to meet the growing demands of clients for rapid service.

Enhanced security is another key benefit a paperless office provides. Locked cabinets can be broken into, but with the right computer security software and procedures in place, a paperless office can add several layers of security to keep unauthorized individuals from gaining access to sensitive material.

Role-based security and permissions can also be added – companies can provide certain employees with the capability to read, write, modify and delete specific files, something that is much more difficult to do with a paper-based system. With well-managed electronic storage, there is also better disaster recovery and back-up of files.

When a paper file is destroyed in a fire, for example, there is no chance of recovering that piece of paper. But if a digital file is accidentally deleted, it can usually be recovered with the correct information management procedures in place.

The labour savings of a paperless office are also considerable. Paper requires a great deal of time and labour to organize, file and retrieve. Working with digital files is much quicker for employees.

Retrieval of information is almost immediate in a well-managed paperless office. Electronic data can also be accessible from remote sites to many individuals at the same time, making remote collaboration and working with off-site colleagues much faster.

One could argue that a paperless environment can even improve employee morale. With employees no longer spending time on tasks such as sorting and filing paper, they are able to spend their time more productively.

A paperless office may also be beneficial in attracting promising new hires who are drawn to workplaces that are innovative and efficient, leveraging technology and tools to support a paperless workflow.

POSITIVE GROWTH

Paperless benefits have been demonstrated. Thanks to emerging technologies, paperless offices are growing in popularity and companies are experiencing substantial time and cost savings, while at the same time decreasing their environmental footprint.

Technology solutions developed by the Centre for the Study of Insurance Operations (CSIO) – combining eDocs, eSignatures, CSIOnet and CSIO industry forms – seek to work individually (but preferably combined) to help brokers reach the goal of a paperless environment.

Serving as a cornerstone of a brokerage’s paperless workflow, the eDocs standard allows policy documents (usually PDFs) to be downloaded directly from an insurer’s system to a broker management system (BMS) via CSIOnet and automatically attaches transmitted documents to the client file in the BMS.

Beyond eDocs, though, further efficiencies can be gained by implementing eSignatures, the process of obtaining an electronic signature from a client. eSignatures produce digital signatures that are authentic, verifiable, tamper-proof and legally compliant.

The notion that physical insurance documents need to be signed for most types of contracts is actually a misconception, not a legal requirement.

Published in November 2013, the CSIO eSignatures Advisory Report explains that businesses can use eSignatures for most internal and external documentation, eliminating the need to print, scan, fax and shred documents.

Electronic signatures are more about creating a seamless paperless insurance transaction than simply obtaining a digital signature, which contributes significantly to a paperless workflow.

HARD SAVINGS

A broker can measure the dollar savings that have been gained through adopting a paperless workflow. For example, a broker on average may do the following:

• receive 100 policies a day from insurers;

• pay an administrative support employee $16/hour to gather, organize and archive policy documents (spending four hours a day on this task);

• spend $100/month on document shredding and disposal; and

• spend $100/month on external document storage.

Using eDocs to establish a paperless workflow, this sample broker can realize more than $18,000 in annual cost savings and 125 workdays in time savings. These savings are in addition to the cost of postage and mailing. Consider that the cost of mailing a standard letter in Canada soared 35% in 2014, from 63 cents to 85 cents.

Using the CSIO eDocs Savings Calculator allows brokers to calculate the potential time and cost savings of eDocs for their own brokerage.

In addition to the aforementioned costs, it is important to consider the cost associated with obtaining signatures on paper documents. “A study in the (United States) estimated that there are 30 billion paper documents copied or printed annually, and when you factor in the cost of copying, scanning, archiving, routing and retrieving lost documents, the estimate was that each paper signature costs around $6.50,” says Daniel Fabiano, a partner at Fasken Martineau DuMoulin LLP and author of the CSIO eSignatures Advisory Report. “There’s no reason to think that the cost per signature would be any different in Canada; in fact, it could be higher.”

SOFT SAVINGS

But there are also soft savings that cannot be so easily translated to specific dollars, such as response time and increased client satisfaction.

“I’ve been using eDocs together with eSignatures since early 2014, and they tie in quite well together,” says Gord Thompson, an account executive at Christie-Phoenix Insurance, based in British Columbia. “Instead of chasing clients around for statements of values or letters of brokerage, and sometimes waiting weeks, I’ll now get them back in 10 minutes. It’s a night-and-day difference,” Thompson says of eSignatures.

Clients also increasingly prefer the convenience of receiving a digital file and are not demanding paper as frequently.

“From a client perspective, eDocs are becoming more common because I’ve noticed clients don’t want the hard copies anymore,” he says. “It’s easier for them to record it on their phone, pull it up on their tablet, refer to it electronically… that’s what their comfort level is.”

NET & FORMS

Efforts to create a paperless environment can be further enhanced with CSIOnet, which transmits data between insurance industry trading partners, namely brokers and insurers.

And although it might seem counterintuitive because of their long-time association with paper, CSIO forms actually contribute to the paperless workflow as well. Although for many the word “form” conjures up images of paper, more and more forms are being integrated into BMSs, using the vendor’s own user interface.

Their appearance may be different on screen, but the forms can help brokers achieve a paperless workflow by using data standards, which CSIO develops and maintains for the industry in collaboration with its members in working groups. This standardized forms data is then efficiently transmitted between the broker and insurer over CSIOnet.

CSIO will continue its work on other initiatives to suppor
t the paperless workflow. A strong foundation for eDocs has been built for personal lines, and as more insurers adopt the solution for commercial lines, the paperless workflow can be achieved for commercial business as well.