Pinnacle cuts out the middleman with online services

Clients can buy up to $500,000 in life cover immediately online, says the company

Local insurance company Pinnacle Life has launched a service selling life insurance online.

“You apply online, we issue the insurance online and the whole process is pretty much immediate,” says Ed Saul, partner at Pinnacle Life and former CIO of Tower Insurance.

In 10-15 minutes the entire process of buying life insurance is completed, says Saul. He calls it “a revolutionary new way of buying life insurance”.

“It’s gone from days to minutes,” he says.

Pinnacle Life is backed by German reinsurance company Hannover Re. Saul approached three of the largest reinsurance companies in the world, and while they were all interested, Hannover Re was the only one prepared to take the step into the virtual world.

“The other two thought it was too risky and new,” he says.

“It took a lot of convincing, but once I got [Hannover Re] on board, they were very excited.”

Online clients can buy up to $500,000 cover immediately online, Saul says. There is no paperwork involved.

“There are medical questions about your health and lifestyle,” he says. “At the end of the process we can issue cover immediately. The systems we have implemented customise your policy for you in real time.”

The .Net system was built by local company Greenwood Online.

Saul reckons that Pinnacle Life has got a head start with its online system. Insurance companies traditionally use brokers or financial advisers to sell life insurance, he says.

Life insurance is considered something you have to sell to people; the assumption is that they will not go and buy it themselves.

“Our view is a little different,” he says. “We believe that people are smart enough to know if and when they need life insurance. The problem is there is no opportunity to buy life insurance direct, and the reason that people don’t buy it direct is because it is not available direct,” he says.

The company has eliminated the role of the underwriter, who typically would go through applications to determine the level of risk the company is taking on, by electronically automating that process, says Saul.

“We have built those business rules into the software,” he says.

Pinnacle Life’s website also has a blog which serves as a message board and a way to communicate directly with customers, says Saul.

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