Annuity Platforms Vie For Business

Steve Dunlap, chief marketing office, AnnuityNet, asserts that the biggest difference "comes down to where we are in the process of actually building and delivering this technology. At the end of day, both platforms allow brokers to enter a transaction. Ours will also allow them to check balances and process post-sale transactions, such as subaccount transfers."

Dunlap concedes that Pivot/Info-One has said it will provide these capabilities as well, "but we know its not built."

Dunlap adds that, "They have interesting illustration and marketing capabilities, and they are focusing on them. We are not a marketing shop. The bottom line is the industrial strength and scalability of what were buildingour technology expertise and scalability is the primary difference. Is it real or is it Memorex?

"All the 800lb. gorillas have come with AnnuityNet," says Dunlap.

He adds that "the only two credible players in the market" are Pivot/Info-One and AnnuityNet. "Carriers accept that its a two player game."

Dunlap says AnnuityNet charges $10/per transaction from distributors, and $15 from carriers, with fees varying on a scale based on volume. Setup fees, he adds, are "in the tens of thousands."

Pivot/Info-One says the carriers who are integrating their annuity products into the VARDS trading platform represent "more than one-half of the variable annuity product sales in the independent broker-dealer market last year."

Transaction fees for VARDS Trading are $12 to $13 per new business transaction when paid by carriers, according to Shapiro. Carriers also pay a one-time license fee of $25,000 and a fee for each product loaded onto the platform. Product load costs run from $2,000 for product variations up to $10,000 for fully unbundled products, he notes. This does not include costs for VARDS Online.

Reproduced from National Underwriter Life & Health/Financial Services Edition, July 1, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.