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Wet Signatures: Are Insurance Providers Stuck In The Past?

How many physical documents have you signed in the past three months? Chance are, it’s not very many. Maybe a form at the doctor’s office or a driver’s license renewal.

But cast your mind back: 10 or even 20 years ago if you can. You signed your name a lot more back then, didn’t you? Credit card receipts. Cheques. Forms… my goodness, the forms that required your signature! If you started a new job, chances are you spent half your first day just signing forms.

One of the many wonders of the 21st century is the reduction in paper requirements and the corresponding reduction in the use of physical, or “wet” signatures.

What is a wet signature?

A “wet” signature refers to the physical, manual marking of a document, with a signature or other mark; the phrase typically refers to the ink (or even wax) used in the act of signing or marking.

If that sounds old-fashioned, that’s because it is. Most historians agree the use of signatures date back to the 2nd century, and that their use became common in the 16th century.

That’s not old-fashioned, that’s just plain old.

And the practice has barely changed since. When agreements and forms need approval and acknowledgement, they needed a signature. We made some efficiency improvements with photocopiers, fax machines and scanners, but the concept of marking a document itself lived on.

Why do some companies still require wet signatures?

Of course, in the past two decades, we’ve come to rely on our electronic devices for communication and documentation more and more. Do signatures still have a place in today’s high-tech world?

Many benefits and insurance providers would argue that yes, they do. They feel that, until an industry-wide standard solution for electronic signatures is in place, there’s too much fraud risk in accepting electronic signatures. Wet signatures still rule.

But I believe the practice reflects a world that has moved on—especially for startups, tech firms, entrepreneurs and small businesses.

Let me give you an example. A couple of years ago we started working with a new client that had about 45 employees; their provider of choice required wet signatures on the employees’ life insurance forms.

OK, 45 signatures, what’s the big deal?

The big deal is that, like many tech startups, most of the firm’s employees worked remotely and/or embedded in client offices.

We had to drive all over town, visiting multiple office buildings to collect these individually signed enrolment forms.

Time that could have been saved, of course, had the provider accepted electronic signatures.

More importantly than my time, of course, is the inconvenience for my clients.

The times, they are a’changing

I think it’s time that insurance providers, including life insurance providers, stepped up to the plate and started accepting electronic signatures. After all, electronic signatures are now accepted on real estate transactions in Ontario, as well as almost all other legal transactions; and other provinces (including Manitoba and Quebec) allow electronic signatures on wills.

BMO has taken the lead in this space. They recently launched a new app that enables advisors to prepare quotes and submit applications online through their tablet. I’m hopeful that the rest of the industry will catch up.

The needs of our clients must come first. For entrepreneurs and startups—many of whom don’t even have printers and scanners anymore, as their businesses are purely digital—accepting electronic signatures on forms simply makes sense.

If you’re on the lookout for a provider, I highly recommend focusing your search on providers that are flexible and modern enough to allow for electronic signatures.

If you’d like to chat more about finding the right provider for your business, reach out to me here or start a chat with our chatbot.