A recent insurance consulting firm study indicates that many property and casualty insurers are missing an opportunity to streamline and improve operations — especially in claims — by not implementing electronic signature technology.
TowerGroup's Senior Insurance Analyst Karen Pauli addressed the topic in her most recent report, "Electronic Signature and Secure Forms in the Insurance Industry: Taking the P&C Pen to the Web." In it, she examines why the insurance industry is lagging behind other financial services-related fields in the adoption of electronic signatures ("e-signatures"), despite the fact that it has held equality with its paper-based "wet" version since 2000, when the U.S passed a law making it so.
From a claim perspective, Pauli said implementing e-signature technology would benefit insurers in several ways.
"It's clearly beneficial for fraud reduction because insurers can avoid having backdated applications and that type of thing," said Pauli. "Professional fraudsters — in the face of going through an electronic e-signature process — will seek the path of least resistance and will typically move on if they know they can be electronically tracked. Fraudsters love paper because they can hide in the paper world."
Pauli also noted e-signature benefits for insurers attempting to process claims quickly in the midst of catastrophes.
"Insurers can do a lot right on site on a portable hand-held device," she said. "In catastrophe situations where an adjuster has to get signatures in order to process certain things, I think there is clearly a huge benefit."
Pauli also mentioned bodily injury and workers' compensation claims as two additional areas that could benefit greatly from e-signature implementation.
"If there is an injured person at home or in the hospital, an adjuster can always get technology to them via a laptop or home PC," she said. "If the adjuster can electronically send a release document to a claimant's home, a claimant can sign it electronically, send it back, and the adjuster can get those release documents in a matter of minutes. In terms of bodily injury issues for claim adjusters, speed is huge. You have to get to the records and dispense funds. It's really about time management in bodily injury and workers' compensation claims. E-signatures speed up the process and allow the adjuster to get their hands around a situation that can get out of control quickly."
Additionally, Pauli said that e-signatures also hold up more favorably in the court system.
"With a faxed document, there is no way of knowing if it was altered," said Pauli. "Any good lawyer could argue that a document was changed, due to the prevalence of software programs like PhotoShop. Without e-signature capability, a carrier cannot legitimately say it is legal and secure. But with it, they can."
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