As I sit and ponder both the evolution of crowdfunding and the changes to the insurance industry, I can't help but wonder when the two will converge. I spend my 8-5, Monday thru Friday, toiling away in an industry that has changed greatly since I joined. In 2001 when I joined AIG, we were still faxing quotes. Oh, from time to time we would send an e-mail quote but I used the fax machine regularly. It was rare that we would get a paper submission in the mail but it happened from time to time. Our underwriting process was limited for the most part to the information provided by the broker and the SEC filings if the company happened to be publicly traded. Today, it seems as if there is so much more information in so many places that I could almost underwrite an account without any submission information at all. Our processes have become much more automated and the ready availability of information in various databases and on corporate websites has quickened the underwriting process to say the least. I am pleased to say that I have not had my clients paper files in a filing cabinet since 2010 (thankfully my employers have been paperless since then). Going back a bit further, my favorite team member started her career as a policy typist and that was not quite 20 years ago. We've come a long way.
As I look back at the advances that have eliminated the gigantic folders of endless paper from my desk and those that have allowed me to upload 100MB of data on a client to a secure location so an underwriter can download in minutes, I wonder what is next. Certainly someone out there somewhere is working on the issues that confound me and plague this sometime inefficient delivery method we have of serving customers. Problems I would like to solve include: (1) improved application process. We are still sending out non-editable documents that clients seriously must print and complete by hand or type in with a PDF editor. Why can't we have interactive documents that expand fields to allow for complete answers and electronic signatures. (and Chubb, kill the massive disclaimer on page one of your document. Clients never click on it so it only hides the name and address of the firm. Seriously, just kill it). (2) issue the policy already. I fail to understand how I can build a basic webpage with graphics in 30 minutes but it takes you 60 days to issue a policy to me when the only thing you need to add is the name of the company. Travelers figured this out three or so years ago where they now issue the policy rather than the binder if everything is correct at the time of the order. Issuing the policy immediately saves so much time and energy that it should be an absolute requirement for all carriers.
Beyond the basics though, I would like to see innovation and creativity that will allow us to spend more time working with our clients to understand and reduce their risk and less time making endless calls to underwriters (Did you get my submission?; Will you release a quote?: Seriously, will you release a quote?; I got your quote; it's terrible. Can you do better?; Here's your order; may I have the policy, please?; Seriously, please issue the policy.; It's been 90 days, can you issue the policy? What do you mean you need one more signature?!?)
If someone would like to create a Premium Finance company that is backed by a crowd of investors, I am all for that. Sign me up. On the larger scale of going really old school, let's create a Lloyds syndicate backed by crowdfunded investors. Sign me up for that too! There are ways that crowdfunding in some form or another (call it FinTech, call it AltFi or whatever you like) will be impacting the insurance industry in the years to come. For a few perspectives, click on this link.
Monica M. Minkel, RPLU, MLIS, cyRM, CPLP has been working exclusively with Directors & Officers Liability, Professional Liability, Cyber Liability and related products for nearly 20 years. She started her interest in finance by loaning money to her mom at age 11 (complete with a loan agreement and competitive interest rate). She is passionate about all things in the financial industry and the way technology is changing the way capital markets function.