The Road Ahead: Meeting Old Challenges with New Technology
Think about it: just 100 years ago, people travelled by
horse, wrote letters to communicate and used candles to provide light. Can
you imagine doing all three simultaneously? Well, today that same person
would be driving down the road in a much-improved ride, using his
headlights for illumination while speaking to a customer on a hands-free
device. How times have changed!
Technological innovations have indeed changed our everyday
lives, both at home and at our local insurance agency. They have provided
boundless savings in time and money, but can also lead to inconsistencies
The ever increasing utilization of e-signatures has
revolutionized the way agencies work and, in some respects, made them more
efficient. A producer can quickly and easily reach her customers on a
moment's notice when time, schedules and geographic distance would
otherwise be a barrier.
E-signatures, if used properly, can actually
enhance an agency's defense if a lawsuit is filed against them. Take the
example of an agency that procured a commercial property policy for a new
client. The producer reviewed the application over the phone with the
client and discussed each question before inputting the answer. The client
responded "no" to the question regarding whether he had filed
bankruptcy in the past 5 years. This response was recorded on the
application. The completed application was uploaded to an on-line service
(such as DocuSign, Silanis and DocVerify), then tagged with special
annotations where signatures were required and sent to the client for his
e-signature. Client e-signed, emailed to the agency, the application was
processed and a policy issued.
A few months later, a fire engulfed the property which
burned to the ground. A claim was submitted to the carrier who completed an
investigation and discovered that the client had filed for bankruptcy less
than a year before the fire. Not surprisingly, the policy was rescinded
based on material misrepresentation in the application. The client
sustained a significant loss with no money coming from the carrier. As a
result, he decided to pursue a claim against the agency for inputting incorrect
information on the application. The client swore up and
down that he told the producer about the bankruptcy and never actually
signed the application.
What the client may not have known is that, in most
jurisdictions, electronic signatures are both legal and binding to the same
extent as a 'wet' signature. An e-signature on an application demonstrates
that a person intends to commit to the contents of the insurance contract.
In the case above, we were able to submit as evidence relevant details such
as location, time, date and IP address of the e-signing party --
information that bolsters the legitimacy of an e-signed document if a
dispute over the authenticity of the signature arises.
The case above was a perfect example of how new technology
can work to an agency's benefit. But these benefits do not come easily.
Ongoing innovations and changing technology come with a need to be fully
informed as to how the systems function and – just as important --
consciously aware of how the systems 'look and feel' to the user and how
they actually operate.
In another case, an agency procured a homeowner's policy for
a client living in Florida. A screen enclosure endorsement was added to the
policy, which is not unusual in the state. A request was made after policy
inception for an increase in Building limits. A signed approval was
received from the client to complete the limits increase. All good so far –
but next came the tricky part: the producer accessed the carrier's website
and inputted an increase in limits. The change request was approved by the
carrier and the limits were increased.
Hurricane Irma made landfall in September 2018 causing minor
damage to the client's house, but completely destroyed the pool cage. It
wasn't until the carrier began their adjustment of the loss that the client
was notified that she had no coverage for the pool cage. How could that
be?! Screen shots from the carrier's website clearly show that the Screen
Enclosure endorsement box was unchecked at the same time the
limits increase was entered. The producer had no recollection of doing
this, but the presumption is that he must have inadvertently clicked on the
Screen Endorsement box without realizing what had occurred.
Having direct access to a carrier's system can facilitate
the process placing or renewing coverage and reduce the time it takes to
effectuate policy changes. Nonetheless, be forewarned: inadvertent changes
can have significant negative ramifications for your client and,
ultimately, your agency.
As a wise man once said, "Technology is great – until
it isn't." There's a simple message there: technology may
have improved, but it will never be foolproof. That new ride
with its fancy headlights and hands-free phone may be sweet, but never
forget that there will always be a new pothole to match it just around the
Barbara Rocco is an Assistant Vice President and Claims
Specialist with Swiss Re Corporate Solutions and works out of the Chicago
office. Insurance products underwritten by Westport
Insurance Corporation, Overland Park, Kansas, a member of Swiss Re