The Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) opened the doors for financial services organizations to adopt electronic-commerce initiatives such as electronic signatures (e-signatures) and secure documents. According to TowerGroup, this has resulted in segments of financial services realizing decreases in processing time by as much as 50 percent and transactional cost declines of up to 75 percent. However, the insurance industry continues holding onto the traditional contract execution model.

New TowerGroup research finds that in today's global business model, electronic commerce is no longer a "nice-to-have" capability, but a necessity. Today, many consumers have become less tolerant of paper-based transactions and expect all their financial transactions to be supported in an electronic environment. TowerGroup believes that insurance carriers need to respond to consumers' experiences with other financial transactions or risk losing business to financial services organizations that have adopted leading-edge technology for contract execution.

Though IT budgets for responding to demands for new functionality are stretched thin, several forces beyond consumer preferences require that insurers implement the capabilities needed to move documents electronically. These forces include the globalization of the insurance industry, the push for companies to become more environmentally sensitive, the ongoing battle to prevent fraud, and regulatory compliance. TowerGroup believes e-signatures and secure documents are an essential requirement for carriers because they facilitate the acquisition of business in the quickest, most cost-effective, legal manner. However, it is equally imperative that carriers make the development decision on an enterprise-wide basis.

About this study

The TowerGroup report titled "Electronic Signature and Secure Forms in the Insurance Industry: Taking the P&C Pen to the Web," authored by Karen Pauli, senior analyst in TowerGroup's Insurance practice, explores the numerous opportunities for insurance carriers to improve operations by implementing electronic signature and secure documents technology.

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