Technology Spurs Industry, Government Modernization

Technological innovations are revolutionizing how businesses and consumers operate — prompting quick action from the insurance industry and the government to enable people to adopt and embrace this rapidly emerging technology.

The proliferation of computers, smartphones and tablets has changed how people manage their finances. The web and electronic communication have evolved into an important component of the insurance experience.

Insurance consumers are increasingly going to the web to shop for insurance. Subsequently after a purchase, consumers want to use websites, social media, texting and emails to manage their policy and communicate with their agent and insurer. Agents and insurers are using Facebook and Twitter to communicate and respond to policyholders.

While the personal attention of agents and brokers remain the preferred line of communication, websites and e-commerce transactions are growing in importance.

“A positive online experience for customers has measurable benefits for insurers, both in terms of existing customer satisfaction and attracting additional shoppers to their websites,” says Jeremy Bowler, senior director of the global insurance practice at J.D. Power & Associates.

Insurers want their policyholders to benefit from the rapidly evolving technology, but antiquated insurance laws have prevented the use of some technologies. State legislatures have been called upon in recent years to approve legislation modernizing insurance laws so insurers can meet consumers’ demand and preference for online and paperless transactions.

The insurance e-commerce revolution has advanced quickly. In 2011, no states allowed drivers to use their cell phone to show proof of insurance in a traffic stop. By the end of 2012, seven states had approved laws or regulations allowing the use of digital proof of insurance, or e-cards. In 2013, 21 states approved e-card laws including Alaska, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Mississippi, Missouri, North Dakota, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming. Now 28 states allow drivers to use their cell phone to demonstrate proof of insurance, and three more states are still considering similar legislation in 2013.

Modernization of the insurance codes will enable consumers to avoid an unnecessary fix-it ticket and save time and precious court resources.

Technology has changed many routine activities. But streamlining insurance transactions hit obstacles because some states prevented insurance documents from being electronically sent. Once again state legislatures were called into action to update insurance laws.

With California Gov. Jerry Brown’s recent signing of a bill allowing policy renewal notices and disclosures to be sent electronically, 14 states have enacted laws specifically allowing insurers to electronically deliver insurance documents to policyholders. In addition, 11 states have enacted laws allowing insurers to deliver standard property and casualty policies and endorsements that lack any personally identifiable information by posting such documents to the Internet and emailing a link to the policyholder. Now consumers can find their insurance policy securely without digging through a file cabinet or stack of forgotten mail.

E-commerce in insurance is a win for everyone. Quick action in the past two years by legislators and governors is modernizing how insurance is managed, giving consumers more choice, access and flexibility.