According to a new study commissioned by NewRiver, Inc. and conducted by Mathew Greenwald & Associates, there is strong appeal from variable annuity (VA) and variable universal life (VUL) policy holders to receive prospectus and related compliance documents electronically via e-delivery. More than half of the respondents who were not offered electronic delivery from their VA/VUL company said they would be interested in electronic delivery of their documents and prospectuses if it were available. Yet despite this opportunity, the insurance industry appears to be lagging behind other industries in effectively marketing and offering their e-delivery capabilities.
While participants were split in their assessment on how their VA/VUL provider was promoting e-delivery, only one in four (26%) could ever recall being notified about the option. This is a missed opportunity for variable annuity and universal life companies as respondents stated they were interested in e-delivery. In fact, less than a third of the VA/VUL owners (29%) actually read the hard copy prospectus and other documents they receive, including a mere 6% who claim to read these documents from cover to cover. Asked what was preventing them from using e-delivery, nearly three out of five (59%) respondents said it was due to the difficulty in reading compliance documents online.
âThe summary prospectus is good news for policy holders who find online documents difficult and unwieldy,â said Russell E. Planitzer, CEO at NewRiver. âThe availability of the new shorter, summary prospectus makes finding relevant information easier. Already a staple among mutual funds, e-delivery and layered disclosure is rapidly converging on the VA industry and is set to create the same enhanced user experience that mutual fund investors are getting today.â
In addition, the research showed that while nearly all VA/VUL owners consider themselves to be comfortable using computers for personal financial management (91%), the vast majority (86%) said they had no idea how they could go about receiving their financial information in this manner.
âThis is a call to action for the insurance industry,â continues Planitzer. âThere has long been a misconception within the insurance sector that due to its older customer demographics there isnât a high level of interest in electronic delivery or that reading and accessing documents online is difficult. The research dispels this myth, as the majority of those who were either not offered or were not aware of the option of electronic delivery expressed an interest in it.â