The Financial Services sector is no different – it is full of people who make assumptions. A friend of EBIX, Tony Cook, a Partner in the Actuarial Practice of PricewaterhouseCoopers, launched a research report we published late last year. In his talk he commented that the Life Insurance industry like many others is wonderful at talking amongst themselves but very poor at talking to their clients – actual or prospective.

This got me thinking. Tony was right. Of the hundreds of conferences, seminars and presentations I have attended over the years I can’t remember even one that highlighted what a Life Insurance client or prospect really wanted. We all assumed that we knew what they wanted.

To help close this gap, a few weeks ago we conducted an online survey asking real people about Life Insurance. When I say real people I mean people not in the Life Insurance industry. People like teachers, electricians, government workers, midwives, sales people, builders and motor mechanics just to name a few. Amongst other things we asked them:

• Is life insurance important?
• Do you use a financial planner?
• What event would cause you to buy life insurance?
• Have you bought life insurance because of a radio or tv commercial?

We had 122 people respond to the survey. I don’t have the space here to share all the findings of the survey so here are some of the key results we found most interesting:

• About 70% of the survey believed they had enough life insurance. Funny given that only 35% rated their knowledge of life insurance as “very good.”
• Unsurprisingly 83% of people said that increased financial liability (e.g. mortgage) would cause them to consider buying more life insurance. However, what was surprising was that only 5% would think about more like insurance if they lost their job.
• Flying in the face of the huge success of the direct insurance offerings in recent years, only 2% of those surveyed said that they bought life insurance due to a radio or tv commercial.

We will be releasing the report on the survey shortly. So watch this space!

Over the coming months we will be presenting a range of views and information that we feel is important to you. Our area of expertise is the Life Insurance, Superannuation and Investment industries. We are IT specialists with a passion for building software solutions that deliver efficiencies, flexibilities and commercial advantages to our customers.

The way we do this is many facetted; but is underpinned by an aggressive, ambitious development strategy (beast!) called our Roadmap. This Roadmap is a hungry beast and is fed by any information it can get it hands on... we scour all available information sources ranging from our customer, our prospective customers, our customers' customers, our technology peers, the government agencies that monitor and control our industries and the general "person about the street".

A great example of this approach is contained in our "Insights into the Australian Life Insurance Sector." report published towards the back end of last year.

"The report alludes to various reasons why Australia has a chronic under-insurance problem. These reasons include:

• The Life Insurance industry for a long time has been 'sleeping' and a little complacent
• The industry as a whole has focused too much on the needs of specific distribution channels rather than the end-consumer.
• Until the recent global financial crisis, Life Insurance has largely been seen as the 'poor cousin'

within the financial services industry – playing second fiddle to the more high profile areas of funds management and superannuation.

The action steps suggested in the report revolve around the core need for an improved working dynamic between life offices, reinsurers, distributors, advisers & technology vendors in meeting the Life Insurance needs of the end consumer. "

I commend you to download a copy here to see how we go to the industry and ask them what they think. We seek out thought leaders...

Further initiatives this year will be a survey of Life Insurance buyers. Yes, we are asking "Joe/Joanne Public". This is due to appear in the next couple for months. Keep an eye out for it on this site...

We will have guest bloggers appear from time to time offering as wide an array of views and initiatives as possible. We encourage your feedback and comments and we will be doing our best to offer constructive replies.

Philip and I attended the Asia Insurance Review 10th CEO Insurance Summit in Singapore (http://www.asiainsurancereview.com/pages/conference_details.asp?id=143) on 23rd through 25th March.

As well, Gerry and the team attended the FST 4th Annual Technology and Innovation - The Future of Insurance and Wealth Management in Sydney (http://www.fst.net.au/Agenda.aspx?con=20). We also had a booth at this conference. There was a great roll up at these conferences and we consider both of them to be successful.

We at EBIX are in the early stages of promoting our software in the Asian region. Specifically we are looking at SE Asia including Hong Kong. One of the first things that strike you when doing business in Asia in our industry is the way in which it is organised. In Australia, a lot of insurance companies are owned by banks. Further, the wealth management, life insurance, general insurance and medical/health insurance verticals tend to be separately managed. In Asia, life and general insurance companies are separate entities and much more independent in their operation. Banks tend to be more of a distribution channel.

There is also a greater emphasis on the traditional investment products within the life insurance set such as whole of life and universal life. The insurance buyers there like to have an investment component included in their insurance. In this way they feel they are getting something for their money.

A further different cultural aspect worthy of mention is encapsulated in, what was to me, a memorable quote from one of the speakers. He said that in the western world of business you can do business with people and then build strong relationships, in Asia, you build strong relationships first, then you do business. It comes down to trust.

I will be communicating more on our plans in the region in future blogs. Its a fascinating part of the world and it is very exciting as it possesses the next two global economic powerhouses in China and India.

We intend to use the EBIX Blog as an avenue for a number of "guest" bloggers. Specifically these will be Philip Fourie and Gerry Thompson. Their bio's are on our web site. Philip will be making observations of the Australian market as he travels around it talking to our customers and prospects. Gerry will be offering insights into what technical and business innovations catch his attention.

See you next time....

John

One is the ONLY number - with apologies to John Farnham

I have been having a number of conversations lately regarding straight through processing (STP). What it is, what it represents to the industry and how various organisations have implemented what they refer to as STP.

STP has been a standard industry practice for the Investment side of the Financial Services industry for many years. The flow of buys, sells and other transaction is taken for granted. This has not been the case for the Life Insurance, or Risk, side of the business at all.

This sector is still very much in the dark ages as far as bringing relatively simple technological change to bear to deliver basic efficiencies that other industries take for granted. It is our opinion also that many of the Life industry's attempts at STP have not been "complete" in their implementation. Some have been merely bandaids. Examples of this would be implementing a series of file transfers from advisers CRMs to the manufacturer. The subsequent processing would involve duplicate data entry that is error prone, no improvement to the throughput of applications, the same low conversion rates and frustrated advisers and end-customers.

In other words, the processing bottleneck has been simply moved to another part of the business rather than be addressed. The resultant solution is generally more complex and thus support and maintenance costs go through the roof.

We believe their are a few simple questions you can ask of your "STP implementation". They are:

Are all your product rules changed in ONE place?

Do you use ONE quote engine?

Do you have ONE product engine?

Does the data capture of each part of the application occur in ONE place?

Is your customer information in ONE place?

If you introduce a new product, do you make this change ONCE and in ONE place and is it implemented at all distribution points?

If you have answered yes to all these question then we at EBIX think you really do have STP; congratulations, you are definitely in the minority!