May 29th, 2009 | 
Author: I added the following content as a comment on the previous podcast post with Steve Snell, but thought it might be better suited for a post all its own. These thoughts are in reference to an insurance affinity/association Web site overhaul project. The project ROI can be clearly seen by the business unit. Now we’re making a case for executive sponsorship, and of course, IT sign-off. Can’t go into all the details obviously, but the following notes will give you a glimpse into cost justification. The same concepts hold on the agent-driven side as well. (Btw, really appreciated the comments from Steve Snell, John Pogas and Mark Seghers on the ROI podcast. Great reinforcement and added value. Love to get more input. Approaching 100 ‘listens’ already – must be a timely topic.)
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I just did an ROI exercise for a client. Here’s what I came up with relative to overhauling a term life affinity distribution site and converting from PDF download to an e-app:
Tangible Revenue gains, so NEW revenue, that should come from the following sources as compared to the site in its current state:
- Higher conversion rates from existing traffic flow with existing product set (this factor alone could fund the project)
- New traffic, and possible enrollments, from new viral marketing components
- Likely even higher conversion rates with the ‘new traffic’
- Increased persistency rates due to automation – some proprietary ideas
- New revenue from automated cross-sell and up-sell processes
Tangible Bottom-line cost reductions:
- Straight-through paperless processing (HUGE cost savings – this factor alone could fund the project)
- Automating the provision of ID cards and policy information – e-Issue (BIG cost savings)
- Possible member self-service automation
There are also several significant intangible ROI possibilities. And as always, there are also significant positive ROI things that will become apparent post-launch. One definite BIG intangible – collecting prospect/new client contact information, esp email., so as not to be dependent on the association for marketing contact information.
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I attended an amazing and unforgettable event this week – one of those last-minute things that come up suddenly and completely blow you away. As soon as I get a link to the recording, I’ll write a blog post on the event. Let me put it this way – I was flattened by the talk. Sneak preview of the talk in pictures here.
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Got a chance to make a picture for Bernhard Langer, 2-time Masters Champion, last week, as well as Dana Quigley, Tom Randall, and Joe Coffey – 4 mighty men of God. See the pictures here.
Posted in Insurance-Technologies
Hi Mike,
One other ROI factor is the underwriting aspect. You save costs depending if the term product is fully underwritten or simplified if the e-app declines person upfront for any medical issues. That way you don’t waste the administrative costs in underwriting.
Catherine, yes, excellent point. Pre-screening applicants can be a good source of ROI as well, not only from a cost-reduction/process improvement stand point, but also revenue gain, especially if you have a process to cross-sell another product that might be a suitable alternative. For example, if someone doesn’t qualify for the the term-life, perhaps they would qualify for and appreciate disability product, critical illness, AD&D, etc.. On the health insurance side, of they have medical knock-outs, perhaps a mini-med or discount plan, etc. Web-enabling that process guarantees that at least they get the message. And oh by the way, an intangible ROI – insurance company good will – “Hey, at least they offered me an alternative and didn’t just say ’sorry, you don’t qualify. See ya.’”
Thanks for the comment.