Ellipse is about to bring the issue of service to the adviser into the forefront of the group protection industry. John Ritchie explains all to Paul Robertson.
John Ritchie, CEO of group risk provider Ellipse, is a happy man. Always fond of pushing the envelope, his firm is soon to do something that may excite a certain amount of debate in the sector, at least among his fellow providers, and he hopes to introduce yet another acronym to the party.
Ellipse is soon to be the first group risk provider to release service indicators on a regular basis. So the obvious question to start off with is what are they? What are key service indicators?
"We're looking to start a new acronym, KSIs, key service indicators. We often talk about key performance indicators but that tends to look inside to performance, financial performance and operational performance. But, one of the biggest issues in our sector at the moment is adviser productivity.
"We are completely digital, but does that mean anything unless it actually makes a difference to the service the customer, the corporate customer and the member receive? And does it improve an adviser's business?
"So we thought we had better start bringing out some evidence to say this was worth doing and that is what a key service indicator is."
With one exception, these indicators are in a linear progression from quote to claim. The first, quotes are based on turnaround times.
Ritchie explained: "Up to 500 lives group life, 300 income protection or critical illness, the advisers get their quotes online. Now, the ambition there is to get to a binding quote quickly.
"If we are going to decline to quote something, and we do decline to quote at times, pretty much we tell the adviser within two minutes online. But most of the time they will be getting a binding quote.
"An adviser having control over quotes, to prepare his report and meet his client, is important. If you have to defer your meeting with your client because you are waiting on two or three insurers to give you a price, or more to the point, you are waiting for the holding insurer to turn up their review price, it just lengthens your consulting process. Time is money.
"For the big stuff, the 1,000 life scheme, the FTSE 100 company, typically in our sector the adviser gives you a target date for that. Typically in our sector the insurers miss the target date. That is money.
"So, for those offline quotes, we are getting the quote, the offline quote, to the adviser within three days of their target date: 94% of cases by number."
This all sounds great, but Ritchie has no real idea of how this compares: "I really don't know. But that is the interesting thing. In a sense I am saying "Advisers, I am going to tell you what condition our service is in for you."
For the next section, underwriting, it is scheme underwriting we are talking about. Here, Ellipse is a little more sure of being at the fore.
Ritchie is well aware that when you underwrite the really small percentage of people at the top end of a scheme, how you do that underwriting is very important for the impression that your service gives to the client.
Going by the rules
Ellipse has a rules-based online process: there is no paper application form. Ritchie explains: "83% of all individuals that have been underwritten in our system are going straight through; that is just on the rules and possibly with a follow-up call from one of my underwriters.
"That is an unprecedented level of straight-through rules-based online underwriting of the individual.
"So far, it's 0.25% of all the members that have to go through individual underwriting."
Ellipse is also looking at releasing KSIs on policy issue. This is because contract certainty has been an issue in the sector. In the past, insurers would go on risk without having disclosures warranted by the prospective corporate client.
Ellipse currently takes disclosures from the adviser and pre-populates the form with all of those disclosures. And then the adviser gets the prospective corporate policy holder to warrant the completeness of those disclosures.
Ritchie explained: "There are two contractual parties: the insurer and the corporate policyholder. If the adviser gets too wrapped up in a messy disclosure process and a messy on-risk process, they create risk in their practice.
"I have seen a very decent-sized regional EBC go out of business last year because they had five or six current disputes that meant that their professional indemnity provider just cut them dead."
"So we decided that we wanted to really tidy up the disclosure on-risk application to policy. Then, when we get that signed application form, we pull all of the data through from our quotes system into our in-force system. We can issue a policy schedule and we get that done within ten working days, 91%."
It is at this point that things get interesting, as Ritchie has to put his hands up on a key service indicator. When it comes to claims Ellipse will not yet be issuing KSIs.
It turns out there are two issues: one is that there is an official definition on the way; the other is that claims is an area where Ellipse admits to being behind some competitors.
"Some of our competitors are not asking the company or the family of the deceased member to produce an original death certificate. We still are. Some are going electronically, in the same way that the motor insurers go directly to the DVLA.
"They are going directly to the electronic register for proof of death, then they are getting their corporate policyholder to just warrant that their employee has died. That is better than us," Ritchie admitted. "Others have ‘track-your-own' claim online. We haven't done that, and we will do. We are a wee bit behind there."
However, there is also a general definition of service coming through from Grid and the ABI and Ellipse will be issuing data on claims when it surfaces.
In addition, the current crop of indicators is just the first wave: "There will be more," Ritchie said. "We think this is such an important issue. If we want advisers to succeed, if we want advisers to thrive, if we want them to be able to trade in the growth that comes from auto-enrolment, then we need to be good enough for them to trust us to do a lot of the work directly with the client.
Quarterly indicators
The plan is that there will be quarterly indicators with the first full set at the end of the first quarter of this year. They will always be year to date.
Whatever the reaction of his fellow insurers he does not expect to be alone for long: "I would be delighted to see some openness and that this should become normal. I think, overall, we have an improving standard in group risk. Almost universally across the piece. Others aren't as automated as us, although Canada Life is.
"And there are some excellent businesses and there's some real commitment and investment going on. So honestly, I don't know how we will stack up in this."
"But the heart of this is an adviser having reliable trend data to see the condition of their providers, because their interface with their insurers is about their time and about their earning capability."
Well, we'll wait and see. But whatever happens, KSI is a lovely acronym.
