The Insured Retirement Institute is trying to slash through one of the barriers that hurts life insurers' ability to sell annuities: Especially for financial professionals other than life insurance agents, selling annuities is annoying.
The Washington-based group has started a Digital First for Annuities initiative that's trying to close the technology canyon between annuities and other financial services products, such as stocks, bonds and mutual funds.
Through a Digital First steering committee, the institute is promoting a common set of data standards and data formats and encouraging insurers to use it as a clearinghouse for annuity information.
What it means: If the effort succeeds, selling an annuity could be a lot more like selling a mutual fund.
The backdrop: Life insurance agents are used to dealing with computers that exchange data through scraps of papyrus tied to ravens' legs with twine made from the hair of woolly mammoths.
When securities brokers and financial planners help clients with annuities, they have to move over from cutting-edge systems, get past the security layers of that protect the issuers' systems, and navigate through screens that just aren't what they're used to.
In some cases, if they haven't signed up for the same multi-carrier platform, they may still have to get into each issuer's system separately.
The result: Although 83% of financial professionals use financial planning software, only 18% use financial planning software tools that provide access to annuities, according to IRI.
Similarly, about 64% of financial advisors use portfolio management software to manage clients' portfolios, but only a tiny percentage use portfolio management software that includes information about the assets in clients' annuities, IRI says.
Digital First for Annuities: IRI and its members are working with big, commonly used organizations, such as DTCC and ACORD, to try to adopt standards that are close to what many issuers are already using as quickly as possible.
DTCC, for example, has helped IRI implement money settlement services and systems that insurers can use to send each other attachments.
