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Paperless Processing in Property & Casualty Insurance

LESS RISK, NOT MORE: A LEGAL CHALLENGE

Landmark Legal Victory

In a landmark ruling on the admissibility of electronically stored information (ESI), US Magistrate Judge Paul W. Grimm discussed examples of the essential elements of an effective e-contracting process, notably “creating and securely archiving and retrieving an audit trail of the entire ESI management process, from the steps to verify the identity of the persons signing the record all the way through to sealing electronically the document and then securely archiving and retrieving the e-contract.” Moreover, Judge Grimm noted, “These same steps enhance the overall persuasiveness of the hard copy of the e-contract as well.”

 - Excerpted from Lord, Bissell and Brook LLP, “From E-Discovery to E-Admissibility" ‘Lorraine v.  Markel’ and What May Follow,” June 2007 

Secure documents and transactions are fundamental to meeting carriers’ key business priorities of ensuring compliance and reducing the risk of litigation. There is another significant risk to consider, particularly in the case of online applications: If securing the documents or the transaction leads to overly complex procedures, thereby complicating the customer experience instead of simplifying it, prospective insurance buyers will simply abandon the site and shop elsewhere. A well-designed electronic signature solution balances the scales, offering effective security and usability without compromising one goal at the expense of the other.

Clarity is everything

In the ultimate paperless experience the entire online transaction is customer-centric: The procedures are simple. No client-side resources or software downloads are necessary. The interface is user friendly – easy to follow and navigate. The required information and documents are assembled and managed as a single package. The process workflow is automated and helps guide the customer, ensuring that the application will be executed smoothly and accurately. Of foremost importance is WYSIWYS (What You See Is What You Sign): Different Web browsers can affect the way documents appear on a user’s screen. WYSIWYS functionality ensures that documents are displayed properly to the customer – and, equally important, enables the carrier to prove that they were displayed in accordance with regulations. When there is no difference between what customers see online and in the final print-version documents, there can be no confusion as whether the customers’ intent or the affirmation of their agreement with the policy’s terms and conditions were captured fairly and accurately. The result is an improved legal and compliance position based on fewer misunderstandings – a faster, easier transaction experience – which in turn means lower drop-off rates, increased customer satisfaction, and a sharp reduction in costly, time-consuming disputes and legal actions.

Admissible evidence: An open and shut case

With the rapid adoption of electronic signature-driven transactions within the P&C industry, the technology has evolved to meet carriers’ auditing and archiving requirements, which are focused largely on providing and securely maintaining evidence of document and process authenticity. Disputes are rarely about whether a customer signed their policy application, and instead usually focus on whether they actually knew what it was they were agreeing to. What is necessary, therefore, is the ability to demonstrate customers’ intent during the transaction on a step-by-step basis. This is achieved in part by the workflow process – for example, in requiring users to accept ESIGN consent before they can proceed to sign the documents. In many cases, however, the real challenge is in being able to easily prepare and present such evidence in court in a manner that is at least as straightforward as a paper trail and, preferably, more so.  A process signature makes it possible to reproduce the complete online transaction and demonstrate a secure link between that process and the signed record. Presented in this way, the evidence is easy for judges and counsel to understand and is far more convincing.  With such compelling evidence, carriers increase the odds that a settlement can be reached and avoid high litigation cost and the negative publicity of going to court.

Document authenticity and security: a document-centric strategy

Unlike e-signature methods that require a proprietary storage system for viewing or verifying the signature, a document-centered solution provides a simpler, more intuitive approach to security, authentication and archiving. The electronic signature is permanently embedded in the document. It cannot be copied; a tamper-evident seal ensures that the signature will be visibly invalidated when an unauthorized modification is made. Along with the signature, a detailed audit trail is also embedded in the document - the date and time of the transaction, user authentication and unique transaction identifier. As a result, insurers’ records remain self-contained and highly portable at all times; documents can be stored and accessed easily and seamlessly using the carriers’ existing content management systems. Such portability is important in processes where records must be shared between agents, carriers, regulatory authorities or partners.


Precluding the risk of overtaxing IT/IS resources, Silanis’ e-signature process management model is designed to manage an intricate set of variables - for each product, each state, and each line of business, regardless of transaction complexity or volumes – while automating each step within each transaction. Files are managed from the time they are handed off by the carriers’ system through to the signature capture, storage and delivery of fully-executed documents, at which point they are sent back to the end-customer and to the carrier’s archiving and file management systems.

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