Annuities Straight-Through Processing: The Long and Winding Road
Report Summary
Annuities Straight-Through Processing: The Long and Winding Road
Annuities STP will help distributors and manufacturers sell annuities to retiring baby boomers, but the road to its realization is proving rocky.
Boston, November 22, 2011 – A new report from Aite Group discusses the status of annuities straight-through processing (STP) within the context of the U.S. insurance market. Based on more than 35 Aite Group interviews with annuities market participants from carriers, distributors, technology vendors, and industry organizations, the report explores the challenges faced by those seeking to implement annuities STP. It also considers the drivers of pending annuities STP growth and evaluates vendor offerings that make annuities STP possible.
Annuities sales are the largest contributors to insurers’ top lines, and their importance will only grow as the vast population of baby boomers nears retirement. Industry stakeholders have worked hard to simplify the process of distributing these products. Since 2004, the Insured Retirement Institute (IRI) has been developing an annuities initiative designed to help distributors and manufacturers standardize their STP processes; annuities STP also uses DTCC infrastructure to make it easier to sell and process annuities. Like most ambitious efforts to radically re-architect processes flowing across multiple organizations, this is a complex and challenging initiative. Key challenges include reconciling product innovation with standards-based processes and application-development calendars within and across organizations. To help independent distributors and carriers attain the benefits of STP at a lower cost, technology vendors have developed alternative STP paradigms.
“Efforts to increase STP for annuities have made great progress, even against the headwinds of the financial crisis and its aftermath, but there’s lots of work left to do,” says Clark Troy, research director with Aite Group and author of this report. “Annuities market participants should have reasonable expectations about the time frame in which annuities STP can be scaled up and the challenges that will be encountered along the way.”
The report profiles the following vendors that are working to facilitate Annuities STP: Aplifi, The Depository Trust & Clearing Corporation (DTCC), Ebix, Insurance Technologies, iPipeline, and VERTEX Incorporated.
This 34-page Impact Report contains 10 figures. Clients of Aite Group’s Life Insurance service can download the report.