A Tall Order – Solving for NIGO applications with technology

Problem Solution A Tall Order

Not in good order (NIGO) rates are notorious in our industry. They are the not-so-silent killer of many distribution firms’ bottom lines. NIGO rates are a rampant issue, causing expensive delays in application processing. On average, 60% of life and annuity applications are deemed NIGO.

Both insurance carriers and distributors have an interest in reducing NIGO rates. Correcting and resubmitting an application is a frustrating and time-consuming process. Advisors must track down missing forms or signatures and locate overlooked supplemental documents. Ensuring the missing content makes it to the back office can take days in and of itself. A single NIGO, depending on the steps needed to correct it, may take a week or more to resolve.

Whether they were even at fault, NIGOs are a bad look for the advisor. Asking for missed information can cause the client to lose confidence. The likelihood of losing the sale just increased. Many distribution firms are turning to technology for solutions. Modern insurance sales platforms are reducing NIGO rates across the industry. Some digital solutions report average NIGO rates of between 4% and 10%. A prominent insurance provider recently reported their NIGO rate dropping from 87% to 12% after adopting an end-to-end sales platform.

NIGO causes are plentiful, but a few rise to the top as the most frequent offenders.


Around 65% of life and annuity sales are some form of replacement. They are the most common place NIGOs occur. Which is a real problem because replacements are some of the most challenging NIGOs to solve.

Technologies like e-Application and e-Signature are helpful tools for ensuring applications are submitted in good order. But replacements introduce wrinkles. A successful replacement depends on one factor outside of your control: the ceding carrier. If the client and advisor use the incorrect version of a replacement form or the form doesn’t meet the ceding carrier’s signature requirements, the process grinds to a halt. The application stalls as the carriers work to correct the NIGO.

One of the most effective ways to combat replacement NIGOs is by integrating an e-Application platform with a ceding carrier database. If the e-Application tool has the right rules and lookup capabilities, you can ensure proper signatures are provided at the time of e-Submission and require additional document uploads if needed. You can address several other ceding carrier requirements through data validation.

License Gaps

License, appointment and training gaps are another major cause of NIGO applications. These errors are frustrating and slow down the process. They put the application on hold until the issue is resolved. Often, the advisor must return to the client to solicit updated signatures.

Some sales platforms provide can sell checks, which are designed to catch these issues and notify the advisor prior to submitting business.  The sales platform references an agent appointment database, which sends a call back to the platform. It identifies whether the advisor has taken all needed training courses and has proper licensing on record. This allows the advisor to take care of any issues prior to completing the application process.

Payment Errors

NIGOs are common when dealing with payments. Many annuities are issued by check. Until the carrier receives the check, the application is considered NIGO. Even in cases with electronic payment, the application can face ACH errors. This typically means the user entered the account information incorrectly, an unfortunate but unavoidable fact of manually keying information.

A good e-Application tool integrates with an account verification and authentication service and can validate in real time if the account information is correct. There is no need to wait for the check to arrive at the carrier, saving multiple days’ delay to issue. The check is instead instantly validated within the platform and processed at the carrier in good order.

Missing Paperwork and Signatures

Paper applications are complicated and sometimes overwhelming to manage. Frequently, if the application lacks one or more forms, NIGOs are the result. Or, even more defeating, the application could simply be missing a signature.

A good sales platform can use rules to prevent advisors from submitting applications without all the necessary paperwork. In addition, firms can use rules to validate if the advisor has included all supplemental documents. Rules can require the user to verify that items like a copy of a voided check or a signed illustration are complete and attached to the order.

NIGOs caused by missing signatures are likewise as simple for technology to prevent. Some sales platforms have e-Signature technology built in. This allows for rules to make signed fields a requirement in the e-Application workflow. Plus, e-Signature speeds up the application process compared to wet signatures. It reduces the time for signature collection from weeks down to minutes.

Incorrect Applications

Minor application errors are some of the most frustrating challenges of paper processes. Something as simple as checking the wrong box or misspelling information can cause a NIGO.

Advisors should never have to deal with these types of errors given with today’s e-Application tools, which pre-fill known information. If the advisor has their own forms to fill out, such as for a new account opening, most of the client’s information is already in the system. The platform will carry that information forward to populate forms later in the process.

Aside from being a time saver for the advisor and client, this prevents keying errors. Client information will always be consistent across all forms and paperwork—no more typos or discrepancies. In addition, rules ensure that the application meets insurer-specific product requirements. This includes items like minimum and maximum premiums, rider conflicts and state-specific requirements.

Restoring Order

NIGOs have plagued carriers and distributors in our industry for far too long. But no longer. Modern sales platform technology can ensure advisors submit applications in good order. Advisors are saved from frustration and the possibility of losing the sale. Carriers and distributors save time and money with efficient application processing. And your clients experience a sales process that meets their high expectations.

Article by Allison King, SVP, Strategic Advisory Services, Hexure

This article was first published in the NAILBA Winter ID Trends magazine.

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