When it comes to a new product rollout, any IT group would savor the kind of success that Primerica Financial Services has recently had.
At a company conference in June, Primerica officials introduced new wireless software that the IT staff had written to run on the Palm handheld device, which most agents already used to offer quotes to customers. The new software promised insurance agents they could complete applications with their customers, eliminate paperwork back at the office and, here's the kicker, pay them their commissions faster. By August, no less than 22 percent of all insurance applications at Primerica were done via the Palms, with September tracking close to 30 percent.
"At the top 20 offices that use the application, the percentage of wireless applications is running at 80 to 85 percent, meaning that once an office picks it up and starts using it, the numbers go way up," says Tom Swift, evp of field technology at Primerica, who says the company plans to extend the product to mutual funds and variable annuities by the end of the year.
Bob Egan, director of emerging technologies at TowerGroup, says the Primerica experience is a vivid example of what has been brewing in the industry since the 1990s. "Companies are looking to accelerate business processes. They are studying where you can save time and have an equivalent cost of ownership. The end point in the sales delivery channel is a big hole, and empowering endpoints seems to be where mobile technology is getting some significant play. Mobility is essentially the extension of the laptop and other devices like the Palm, and it's got the attention of everyone. It's hard to find a bank doing nothing at all in this space."
Egan says there was a lot of talk about mobile devices empowering the endpoint in the 90s, but that networks were not up to the task yet, and the screens were too small. Today, that has changed, and the technological evolution is now being accompanied by a close inspection of processes. "How do you leverage technology to accelerate the business?" Egan asks. One obvious way is to input the data once-eliminating paperwork and the chance for errors when the same data is rekeyed two or three times.
That kind of close look at business processes is certainly what went on at Primerica. Swift explains that "our strategic advantage is we have a huge sales force-100,000 life insurance agents in the U.S. and Canada. And they usually do business, not in an office, but across the kitchen table with the company's six million customers. The Palm is perfect for us," he says, adding that it was a device that most agents already possessed and so were comfortable using it. "We started by building software to quote life insurance rates and that took off."
Swift says the organization began to look around and see what else might be done via that Palm. Completing full applications was the logical next step, especially given the many problems associated with conventional, paper applications. Primerica processes 30,000 to 35,000 life insurance policies a month, with 55 percent to 60 percent of those coming in the last four days of the month. It's a crush of information that requires a lot of manual intervention, such as opening mail, scanning documents and data entry. "And a certain number of applications have deficiencies. They can't be read, or a box isn't checked," Swift says. "Twenty percent of applications need follow up, which means you can't completely process the application. We wanted to create efficiencies at the point of sale. We wanted cleaner applications and process efficiencies, which would allow the agents to be paid faster." What Primerica staffers came up with is its own customized Palm OS application-called Turbo Apps-to run on Palm handheld and smart phone devices.
There were challenges along the way. Since insurance is regulated state-by-state every state demands a unique form, and the software must handle that. And getting the approval for using the technology also needs sign off on a state-by-state basis. California, Swift notes, took two full years to approve the technology. That is an extreme example; even still, when Primerica went live in July only 12 of the 50 states were up and running. (However, it chose those 12 well, since they account for 50 percent of Primerica's life insurance business.) Another 12 states were set to join as of October 1 and Swift expects another batch in the first quarter of 2006. All states should be up and running by the end of next year.
One of the greatest time-saving features of the new application, says Swift, involves the financial needs analysts. It is standard practice for an agent to run a financial needs analysis (FNA) of a prospective customer back at the office and then return to that person's home. In the past, if the person agreed to the policy, much of the FNA information would have to be rekeyed into the application. But now the agent can "hot sync" the FNA information to the Palm device, which populates 40 to 45 of the fields in the insurance application. "It does it automagically," Swift jokes. "No mail, no scanning, no data entry."
While security has long been a bugaboo for wireless information in the financial services arena, Swift is confident that Citigroup, Primerica's parent, provides as safe a harbor for information as any institution. "I don't know of any financial organization with more stringent standards," Swift says. "Our software involves an authentication process for the agent, and the data on the device itself is encrypted. It's more secure than paper."
Not surprisingly, the people at Palm are pleased that their device is being put to such good use. "It helps them be more accurate and trade in stacks of paper. By helping people be more mobile and productive, the device ultimately helps them cement relationships with customers and gives them a competitive edge," says Tara Griffin, vp of enterprise sales at Palm. "Palm has a flexible, standards-based platform that makes it easy to write for and ensures the end user will actually use it."
Swift says that the adoption of the new technology was especially impressive since many agents actually had to upgrade their Palm device to use it. Primerica arranged for a special discount through Palm for their agents and by mid-September 5,000 of the new Palms had been purchased. So far, 8,000 agents had activated the software and 4,500 had submitted at least one life insurance application.
Next up for Primerica will be rolling out the wireless capabilities for mutual fund and variable annuity sales. Swift notes that 30,000 of the company's agents are also licensed to sell securities, so adding this capability is no minor bolt-on initiative. Indeed, the company processes between 20,000 and 24,000 mutual fund applications per month.
Beyond that, Swift has dreams of 100 percent electronic processing of applications. "We'll always support paper, but 100 percent is the goal. I think we'll get to 70 to 80 percent pretty quickly, but convincing that last 20 percent will be tough."
