NU Online News Service, March 6, 11:31 a.m. – AnnuityNet Inc., a company that develops Web-based annuity distribution systems and services, says it processed a record $2.1 billion in annuity transactions in 2001.
The processing figure represents record annual volume for annuity transactions by an e-commerce technology provider, according to AnnuityNet.
The Leesburg, Va.-based company sells technology that links banks, broker-dealers and other “point-of-sale distributors” with the insurance carriers that create and underwrite the annuities. AnnuityNet says its technology creates a “paperless stream” of communications for processing annuity applications, servicing contracts and managing the underlying investments.
“While there are a number of other vendors offering technology solutions in the annuity sales and servicing marketplace, none are processing on an annual basis anything close to the dollar volume demonstrated by the AnnuityNet platform,” the company says in a statement announcing its 2001 volume.
The announced level of business puts AnnuityNet in a category with other “small to mid-size players” in the annuity category, says Chuck Johnston, an insurance information technology expert at the Meta Group, Stamford, Conn.
AnnuityNet “can be used by a manufacturer as a distribution platform, or a distributor can use them as a front office,” Johnston says. “That gives them the ability to do a lot of transactions.”
The $2.1 billion processing figure includes several types of transactions, according to Steve Dunlap, a senior vice president at AnnuityNet,
More than half of the volume comes from “post-sale transactions,” in which clients who already own annuities use AnnuityNet’s services for online trading capabilities, Dunlap says.
A “significant portion” of the $2.1 billion comes from AnnuityNet’s role as a front end for other distributors, such as Schwab, and the rest of the volume represents AnnuityNet’s direct sales of annuities through its own site, Dunlap reports.
AnnuityNet Chief Executive Shane Chalke predicts his company will be moving close to $500 million of business through its platform each month by the end of the year.
“As more banks, broker-dealers and carriers continue to come on board and begin using our technology, we believe that figure will grow substantially,” Chalke says.