Local Laws Caught Up

The European countries have had hard times of adjusting their national legislation to the directive by the deadline set for them, thus July 1, 2018. However, the CEE caught up the best with three of the five countries that have communicated full transposition by May 24, 2018.

Belgium, Germany, and Lithuania have partially communicated its readiness, although Germany was considered the first to approve the legislation changes locally. In the rest of the countries, the legislation mostly went underway, too, and only waits for a communication in the official national journals.

One of the last countries to implement the IDD was Italy but even they published the necessary changes to their laws in mid-June. Meanwhile, insurance supervision authority IVASS has launched public consultations for the further development of the rules to prepare for the secondary level legislation changes.

Despite the Brexit hassle, UK also managed, albeit sluggishly, to close the procedure, as it transposed the directive in local law at the end of May. Nonetheless, UK Financial Conduct Authority (FCA) claimed many firms are prepared for the new regulation ahead of the final October deadline and in the latest edition of its handbook promoted an early adoption of legal requirements.

What Practice Makes You Compliant?

The IDD would like to enforce the rights of the customers on an EU-level to receive the same complete information package about an insurance product, including agent fees (that is also the most discussed part of the regulation), regardless of the sales channel. Also, the European Union would like to establish a detailed rule of the requirements necessary for the work of agents and distributors and to create a standard regulation for life and non-life insurance products.

Getting more practical, the European Insurance and Occupational Pensions Authority (EIOPA) has issued detailed guidelines regarding “execution-only” sales or telephone and online sales, a territory most in need of regulation.

The guidelines help assess what products fall into the category of insurance-based investment product and if they are difficult for the customer to understand. Such products pose a risk of buying before reaching readiness and, therefore, should be excluded from phone or online selling, where no advising activities occur, in order to minimize the risk of customer detriment and misselling.

Insurance Distributors Have Launched the Race

Forward-thinking insurance distributors have already prepared their own solutions and they turn to technology to lead the way out of the regulatory chaos.

One of the first products already on the market with compliance with IDD in mind is the new consulting software of insurance group Die Bayerische, called BayRat. The software, developed in partnership with their own IT firm iS2, offers a step-by-step financial analysis starting with an assessment and followed by the creation of an individual concept and a specific consultation. In the end, the consumer gets a 100-page report (a substantial part of the directive is the obligation to provide a standardized and straightforward documentation about the insurance product) and with the agent, they are able to find a tailored solution.

Targeting Millennials is a new challenge that insurers need to tackle but that effort can be aligned with regulatory compliance, Coya’s example shows. The Germany-based insurtech startup, that has recently got a funding of USD 30mn, aims to enter the market with a product that ditches the old practices of neverending paperwork and impersonality of client treatment. By digitalization, effectiveness will live up to the effectiveness expectations of the Millennial generation. Also, the transparency and clarity that generation demands luckily coincides with the requirements of the new regulations like IDD and GDPR.

Even professional associations think IDD is a great opportunity to present a new approach, this time to collaboration. Two financial advisory associations in the Czech Republic, USF, and AFIZ have decided to join forces and establish the Czech Association of Financial Advice and Mediation (ČASF), to improve the conditions for discussions about regulations such as the IDD and promote self-regulation and customer protection. The strongest representation of insurers to date brings 27 market players to the same platform, including Broker Consulting, Fincentrum, OVB Allfinanz, and Swiss Life Select.  

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The Insurance Trend Report is a bi-yearly international communication material of the latest course of innovation that characterizes the insurance industry. For the future-oriented insurance professional, this publication is a guide to a successful digital transformation and to creating an innovative culture within his or her organization.

We at SCOLVO find it very important to spread the word in the insurer community about the new technologies that help market players comply with the new regulatory challenges. We are happy to show that such a directive, seemingly a nightmare, can also be an outstanding opportunity to upgrade to a new solution and to create the workplaces of the future.

You can download or view the Trend Report on Slideshare.

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Meanwhile, clients expect even more personal and up-to-date solutions from the financial service providers. With mobilization, the sales of insurance can be better controlled, the data quality improves on the back-end, resulting in better, more tailored offers for the clients.

Digitalization with a Doubtful Outcome

Insurance distributors have already realized that they need to take steps to stay competitive, so the establishment of new working methods and technologies that make workflow more effective has already begun. There is some CRM to store client data and some registration system for the agents, and digital calculators, questionnaires became an essential part of everyday work.

But some problems emerge more often than others: because of the employment specialties of the agents, quality assurance is cumbersome, the administration is hardly free from paper, and there is not enough information available about the clients. The management is struggling to get an idea of what is going on at the personal consultations, let alone to control it, so the options to control the outcome is also limited, at least with management tools.

Have the agents made it to the meeting? How much time did they spend there? Did they present all the necessary documents? Did they ask all the essential questions? Did they assemble the quote according to the real demands of the client? If the client calls of the appointment, how can it be rescheduled efficiently?

When the agent faces these questions, the answers show the amount of administration (signing in to more systems, mixing paper and electronic documents, the difficulties of data recording and reporting) puts the margin of error too high.

Mobile Solutions Preferred

Finding all that you need for your job in one place, regardless of whether you work as an agent or a manager – sounds impossible? However, that is precisely what a mobile application has to offer. Adapted to the particular challenges of insurance distribution, SCOLVO Sales, for example, provides access not only to client data stored in a CRM or to corporate email but also to other back-end systems, and they can also be synchronized on the go. The agents can also find all the presentations, contract templates, or corporate calculators in the app.

All this is easily manageable on a mobile device since the agents only have to log in once, to a single application. After that, all the crucial information appears on a simple dashboard, together with the tasks for the day.

The mobile app offers an interface for the management as well, to communicate tasks and changes more simply and quickly. They can schedule the team’s resources on demand, in real time. They can also see where, in what timeframe, and what kind of information did the agents deliver to the clients, and what new data could he or she could get.

Well-managed Information = More Clients and More Engagement

Thanks to the central management available through the mobile app, the daily organization becomes smoother and more efficient, and it gives more information to the managers about the contents of a personal meeting. The work of the agents is trackable, and the team can do the tasks following best practices. Meanwhile, the management receives automatic and instant feedback on that.

The easy-to-use application and the easy-to-understand, easy-to-oversee functions allow the agents to record data easier and quicker, improving data quality. They don’t abandon the CRM for difficulties of usage, so it also becomes more accurate, more current, so more useful for the business.

The better data quality allows the management to get to know the clients better. The summarized information, completed with other, automatic reports made during the personal sales meetings (like the length of the session, the material presented, emails, follow-ups), result in offers that better suit client demand and promote further sales opportunities (upsell, cross-sell).

SCOLVO Sales – The ultimate selling machine for financial institutions has arrived:

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In a best-case scenario, three months from now all the countries of the EU will have transposed a regulation of their own to comply with the rules of the Insurance Distribution Directive (IDD).

The market players, on the other hand, will have seven months to prepare for the implementation.

The draft laws and amendments are ready in most of the countries we covered below, and the market players that had complained about the shortage of implementation times now are more likely to make headway in their implementation projects.  

CEE Market Snapshots

The Czech Republic

In the Czech Republic, the elections held in the autumn set back the legislation processes, and it may be still set back by a dysfunctional parliament in 2018. So it is yet to see whether the country manages to fulfill its transposition obligations with the IDD on time. Fincentrum’s Legal and Compliance Director Vladek Krámek claimed the efficiency of the new regulation for the sector would come with “approximately one year delay.”

Slovakia

The Slovak Republic has already approved the necessary modifications to the Financial Intermediation and Financial Advice Act, to transpose the IDD into national law. However, the negotiations with the financial intermediary sector did not lead to the desired outcome, from the sector’s perspective. The Association of Financial Intermediaries and Financial Advisers finds it positive to see changes in commission rules but expresses concerns over the guarantees of professionalism of agents.

Croatia

The Ministry of Finance in Croatia is already done preparing the amendment to the current insurance law and waiting for it to be approved. On a recent conference, the Croatian Insurance Days, top professionals of the sector discussed the possible consequences of the regulation, together with the challenges they’re facing. Andreja Radic Blazin, Head of Insurance at the Supervisory Agency of the Croatian Financial Services, said that, despite the scarcity of sophisticated products on the market, it would still not be so easy to comply with the IDD requirements for the distributors. Generali CEE’s CFO added that the fast-changing technology landscape might make compliance a double challenge.

Poland

The final version of the act was approved by the Sejm on November 9, 2017, and passed on to the Senate. If it will also accept it, and the President signs it, the original timeframes can be kept, and the act will come into force by February 23, 2018. Depending on the decision of the EU about pushing the implementation deadline further, the Polish legislator might also have some room to adjust the dates, CMS Law-Now reports. Sooner or later, market players will need to comply with the new act, and if they fail at it, the penalties might amount to as high as 5% of their revenues.

Hungary

Hungary has already published the amendments to its Insurance Act in November, containing the necessary changes for the transposition of the IDD. Besides the act coming to effect on February 23, 2018, several regulations of the European Commission regarding the details of the implementation of the directive will be legally binding for the market players. In a recent roundup, CEO’s of the leading financial institutions considered IDD one of the most substantial challenges of 2018 but hoped that the interest of the customer would justify the efforts.

Romania

The Ministry of Finance has published the draft law for the transposition of the IDD in Romanian legislation in September. After the Parliament has it approved, the bill will come into force on February 23, 2018, and cancel all the previous regulations regarding insurance distribution in the country.

Germany and Austria

The German Parliament was way ahead of the other in approving the country’s IDD Implementation Act in July 2017. The state will be the only one to keep a prohibition of passing on insurance provisions so to protect insurance intermediaries are from decreasing margins and the need to close more deals to make up for that.

Contrary to the German preparedness, Austria was still to send a draft bill in December with the amendments to the current laws affected by the IDD. The Ministry of Economics needs to have the Industrial Code and possibly other laws updated.

Make compliance with IDD easy, workflows paperless, and customers happy – with a mobile solution:

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It’s time to comply again: The European Union gave a two-year timeframe for the individual countries to adjust their legal regulations to and ratify the so-called Insurance Distribution Directive (IDD) and that expires on 23 February 2018. From then on, market players will most likely have another 7 months to implement the changes in their practices.

The IDD would like to enforce the rights of the customers on an EU-level to receive the same complete information package about an insurance product, including agent fees (that is also the most discussed part of the regulation), regardless of the sales channel. Also, the European Union would like to establish a detailed rule of the requirements necessary for the work of agents and distributors and to create a standard regulation for life and non-life insurance products.

For the insurers, it is the last minute to prepare for the changes to come in February 2018. According to the general opinion in the sector, compliance is hardly achieved in this timeframe unless the service providers find a quick and “painless” solution.

Luckily, there are such solutions available: mobile sales enablement tools. These are a great help in the digitalization process, not only supporting paper-free processes but also follow-ups, as they document them automatically (making them compliant with regulations). The easily accessible, digital documents are also of crucial importance for customer engagement.

Let’s see what exactly do insurers have to comply with and what advantages does a mobile sales enablement tool have regarding this compliance:

Even More Information Material

The EU member countries, especially the more mature economies, are covered on most levels with their existing regulations. The sale of insurance products had also been regulated on an EU-level by the Insurance Mediation Directive, applicable to brokers and other intermediaries (this will be replaced by IDD). However, the current directive now significantly extends the obligations to all sellers of insurance and requires them to commit to helping clients even more to make informed decisions. To most service providers, complying with the IDD might be a considerable challenge.

A substantial part of the directive is the obligation to provide a standardized and straightforward documentation about the insurance product (IPID). The documents need to meet the content requirements (detailed description of the product, meeting client demand, the costs, interaction, and risks of the individual elements) and also the formal ones (equally readable in color and monochrome print, not too small letters, availability of more languages on demand).

Help Comes on Mobile

A mobile sales enablement application will help insurance distributors making their workflows digital (therefore, paperless), but also easy to follow up and to reach an overall higher level of customer engagement, while meeting all requirements of the directive.

Let’s go through the details of how a mobile app makes the life of insurance agents and sales managers easier:

Pre-set workflow

A mobile sales enablement application can define the steps an agent has to follow during a personal meeting. This way, the margins of error can be reduced to a minimum: the agent will undoubtedly present all necessary documents (it is especially important in the case of complimentary insurance products that can be implemented as extra elements in the workflow), in the right form. He or she can also check whether the message has been successfully delivered, and give a suitable offer. Since the application saves a record of the whole process and the agents authenticates it with their signatures, it is retrievable and controllable.

Questionnaires

Mobile questionnaires are particularly suitable to make sure, even during a presentation, that the client has received the right information and understood it, including the risks associated with a particular product. With a questionnaire, agents can assess a client’s general financial knowledge, situation, and goals, and adjust their offers accordingly. The filled out forms can be accessed in the application anytime, and they can also be shared with the back-office in real-time so, in the case of the occasional checkup, the agent’s work is adequately documented.

Presentations

The up-to-date presentations are always at hand, in a form that is attractive to the client, with interactive elements on demand. Interactive displays are especially useful when it comes to presenting the individual components and different risks in an offer. The content of the presentation can be modified and specified by using the data put in by the clients and aggregated by the app. This way, it will be even more suitable for the client demand assessment required by IDD and will contribute more efficiently to the preparation of an offer that meets that demand.

Notes

With the mobile sales app, agents can take notes about the attached documents, whether they are standardized product leaflets, multilingual materials, questionnaires filled out by the clients, or specific slides of a presentation. If there was also a  consultation, notes taken during such a meeting could also be sent to the client in a pdf format, together with other attachments, meeting the requirement of pre-contract delivery.

Access to client data

The mobile app is a one-stop shop for all data regarding a client, a consultation or a contract. Examples of the data include details of a personal meeting, presentations, documents (scanned documents can also be attached), completed questionnaires, quotes made by the agent, and full legal notices.

Calculators and product recommendations

Personalized quotes can be created by the agent anywhere with the mobile application and the integrated calculators and product recommendation services. For more complex calculations, special third-party services can also be integrated into web-based or native versions. The recommendation engines usually ask questions based on keywords in the official documents and compare the options using the answers given.

Quotes and on-site contracting

The mobile sales enablement application can create a personalized quote for the client already on-site of the personal meeting, following the consultation and the delivery of the documents. If the client accepts the offer, whether it is done by signing a piece of paper or by an e-signature, the deal can be closed by both the agent and the client while complying with the IDD.

We at SCOLVO have developed a mobile sales enablement application that supports personal sales processes and answers the challenges of the insurance sector by simplifying consultants’ everyday tasks. By using SCOLVO Sales, the sales process becomes digital and, at the same time, compliant with the regulatory requirements of proper documentation, follow-up, and quality customer service.

SCOLVO Sales – the ultimate personal selling machine for financial institutions has arrived: Click to learn more

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The Millennial generation is often undervalued and/or faced with high expectations: they’re considered lazy, disrespectful, and tech-dependant, while their integration to the workplace is critical for the businesses that want to create a natural succession to their baby-boomer and Gen X workforce.

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Luckily, mobility could be a way to satisfy the needs of both parties and create a meaningful connection between the interests of the business and the people.

Millennials in the Workplace

The Millennials are the people who were born between the early 1980’s to 2000, and they belong to the first digitally native generation. It means there was basically no time in their life without technology so they can’t even imagine work without it.

By the time they grew up and entered the world of work, technology had enabled them to work from anywhere, anytime, and they developed their habits accordingly. As a consequence, flexibility has become their most important workplace value and mobility its natural extension.

However, this mobility also has to be limitless, to be able to work regardless of corporate wifi networks or data plans. Since this generation has grown into using technology, not only habits have formed but also preferences for certain devices and applications. Milllenials would like to use their own devices at work and the same applications they have been using.

Technology at the workplace can be a perk that doubles as a work tool, especially if it allows for wide collaboration (another core value for this generation) and offers a seamless user experience. Millennials don’t want to spend their time on training but they will figure out how to use any new tool to get the most out of the working moments.

Millennials are not as numerous of a generation in Europe as they are in the United States. While there they accounted for 27% of the adult population in 2014, European Millennials only account for 24%, according to data from Pew Research.

Besides, the aging of the population is a serious problem in the developed world: due to low birth rates and increasing life expectancy in Europe, for example, the ratio of the 65+ generation has grown from 16.6% to 18.9% in the last ten years. But while the number of workers can be increased by keeping people out of pension for longer, there is also a need for refreshment and attract the younger generations.

Financial institutions: in desperate need of young talent.

The financial services industry, especially insurance, is a sector stricken by the lack of young employees. In a PwC report, 25% of CEO’s surveyed in the financial services sector said they had to cancel strategic initiatives because of the unavailability of the right people.

It could be due to the eroding reputation of the sector: the above report mentions that 21% of the Millennial respondents don’t want to work in financial services and 12% mentioned insurance specifically as an unattractive industry.

Besides a certain attractiveness of the traditionally flexible work of an agent, workplace technology can be a way to fight this trend. In fact, 66% of Millennials would look at the technology an employer uses when considering a job.

Most of all, it means mobile, as this generation thinks mobile-first and mobile-diverse, equally and appropriately choosing between laptops, tablets, and smartphones depending on the situation.

Because of the talent shortage, insurers and other financial services providers have to change mindsets and actively addressing these demands despite the regulatory challenges of data management. An important step is to approach recruiting from a different perspective.

The goal should be to actively engage the right candidates and proposing long-term perspective in a career. Although these young talent will have to be trained, this could be balanced with a quicker onboarding and generally higher level of productivity through mobile devices and applications.

What they lack in expertise they might be able to compensate with more empathy, mainly towards their peers who will also constitute the majority on the client end. Millennials, with their growing purchasing power, can be just the right target for selling financial services. And who could better convince them than someone who is exactly in their shoes? And someone who is in their shoes knows well how a mobile application can be more convincing than a face-to-face meeting.

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There are three main areas where mobile solutions present real answers to the insurance industry’s current challenges – let’s see them in detail!

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Sales: from Slumping to Stellar

Insurance companies globally are struggling to close the most deals possible in the shortest amount of time, facing tough competition along the way from technology-driven players. Other than driving down the prices, they make the whole process of buying insurance easier – again posing a threat to providers with sluggish processes.

Traditional insurers need to keep up with this trend, and mobile applications are able to ease the pressure. Consumer-facing apps are a suitable solution for today’s conscious customer who demands a quick and transparent buying process with more interaction with the service provider, even if it’s virtual, like a 24/7 customer support.

When they do require a personal contact with the sales agent, employee-facing apps are the solution to support the sales cycle in many ways. Accessing data wherever and whenever is not a problem anymore, so agents can support their argument in real-time when meeting with clients. Equipped with a tablet, the agent can give full control to the customer in the calculations with automated quotes, while also able to show rich presentations or give advice on critical choices backed by database evidence.

Let’s not forget that mobile apps are two-way tools: while the agent is on the road, he or she can also supply business-critical information about customers and deals, such as quotes and preferences, that the whole team can have access to. Managers can communicate with the field team in real-time, through easy-to-use interfaces, and call the attention to cross-selling opportunities.

Damage Appraisal: from Dilatory to Dashing

Damage appraisal is one of the most important activities of insurance companies and a typical field job. Traditionally, it had been a paper-based process with lots of delays because of the slowness of paper file transfer and manual data input.

Digital transformation, however, didn’t leave the industry untouched, and the paper-based workflows are slowly being replaced by digital ones, ideally with a mobile-first approach. Some companies even take it one step further by embracing the increased connectivity of devices known as the Internet of Things, for on-site, automated claim management.

Mobile devices and easy-to-use apps are a way to maximize the output of an aging workforce of damage appraisers while attracting new, tech-savvy talent to the profession.

Mobile applications can handle the submission of low-risk claim forms in an instant, and provide the agents with information on the customer, helpful hints on reasonable claims, repair cost estimates, or compliance issues.

A simplified daily routine makes the use of a mobile app attractive to the agents, increasing their engagement and loyalty, especially if the application interface is user-friendly and minimal training times are required.

Due to a real-time input of appraisal data, claims can easily be adjusted by the next day, reducing the usual waiting times by even as much as 40%, which will increase engagement on the customer side.

Valuation: from Valid to Value-Added

Even the property sub-market of the insurers has been experimenting with steering their processes in the mobile direction to meet new demand from the customer side.

Frequently changing regulatory environments, market conditions, call for a sustainable solution to stay in the competition. By cutting back on process times and costs, insurers can save what is lost in the price competition.

During property valuation, the most useful is probably an appraisal helper that allows the agent to synchronize data about a property that was either put in off-site or on-site and add sketches or photos to a complete picture. Some applications also have the capability of converting documents like blueprints to portable formats and store them in the cloud for easy access.

The real-time access to specific data sends the message of professionalism to the client. Mobile applications allow the agent to use downtime to increase productivity as well as to add real value to a process without much effort.

For a worker who is always on the go, tracking mileage and other expenses without any paper involved is also a function of utmost importance. These documents can also be attached to reports and getting handled by the back-office staff with more efficiency.

See how SCOLVO helped improve the processes of Aegon Group, one of the most well-known names in insurance globally

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