Annuities sales are incredibly strong, and a close look at market trends reveals yet more room to run.
The promise that technology would change the annuity industry is an old story with more tales of potential than actual results.
But the narrative is changing — so much so that carriers were almost caught off guard by the power of a new all-digital, paperless transaction process for annuity transfers that is cutting cycle times by 94%.
The overall “Digital First” project was led by the Insured Retirement Institute.
“This first paperless transfer annuity transaction is just the beginning of what our Digital First for Annuities initiative can deliver,” said Wayne Chopus, CEO of IRI. “We are creating a modern, consumer-centric infrastructure by embracing advancements to help streamline processes, reduce errors and accelerate transactions. This transformative work continues to gain momentum.”
IRI members and The Depository Trust & Clearing Corporation collaborated for more than two years to build a digital framework to support real-time processing of transfers, including money settlement.
“We need to stop thinking about the way things have always been,” said Katherine Dease, chief technology and innovation officer at IRI, recalling those early planning conversations. “Big, large, flat files make it hard to get your arms around the data. We need to be thinking about what our consumers and financial professionals are demanding: access to data right now in real time.”
IRI rolled out its first digital priority in November, a paperless, carrier-to-carrier replacement annuity process. Athene, the No. 1 seller of annuities, was the first company to sign up for the effort.
Since then, Jackson National Life Insurance Co., Prudential Financial and Sammons Financial Group have joined them. In a blog post for IRI, Sandy Stokley, senior vice president or operations for Athene, urged competitors to join the project.
“Complacency is no longer an option,” Stokley wrote. “Improving the transfer experience benefits our customers, financial professionals and distribution partners. … Collaboration can expand the annuity market and ensure our industry’s long-term viability.”
IRI anticipates that 14 carriers will be using the Digital First process by the end of 2025, Dease said.
While the paperless replacement process is the first step, there are many more steps to come to perfect a digital-first annuity sales process, e.g., pre-sale, onboarding, application, servicing and management, how the annuity shows up in new tools, and the payout and the exit statements.