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Online Annuity Platform Had $2.1B In Sales In 2001

By Trevor Thomas

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Online Annuity Platform Had $2.1B In Sales In 2001

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AnnuityNet, Inc., Leesburg, Va., says it processed $2.1 billion in annuity transactions in 2001 and is on target to at least triple that volume by the end of this year.

Since its founding in 1997, CEO Charles Chalke boasts, AnnuityNet has become the leading online annuity sales platform linking point-of-sale distributors with companies that underwrite products.

His company already hit $500 million in sales in January alone. In contrast, as recently as 2000, the companys sales levels were “trivial,” Chalke notes.

AnnuityNet–and similar technology from companies such as Pivot.com, Charlotte, N.C.–automates the application process and information exchanges between distributor and carrier.

Chalke estimates that on-line services such as his will process $1 out of every $3 in annuity sales by the end of this year. He says producers like online annuity sales platforms for their ability to slice through paperwork-heavy application procedures and help spot and eliminate errors.

For instance, AnnuityNet can check the suitability of each sale, to help assure that the producer doesnt sell a product to a client for whom it might not be appropriate.

To use AnnuityNets suitability feature, a broker-dealer would design an online questionnaire and scoring system that its registered reps would then use when completing apps for clients.

The broker or managing agent can require that the questionnaire be properly completed before the application can be completed and approved by agency management, explains Steve Dunlap, senior vice president, sales and marketing, for AnnuityNet.

AnnuityNet offers products from nine providers and has been adding new ones each month, says Chalke.

Distributors using AnnuityNet are Charles Schwab & Co., San Francisco; TD Waterhouse Group, New York; GE Financial Network, New York; and John Hancock Financial Services, Boston.

Chalke expects to add four more large distributors by the end of the first quarter 2002. Those four account for $10 billion in total annual premium flow, most of which would be processed through Annuity Net, Chalke adds.

The newest additions are Legg Mason, Inc., Baltimore; PriveVest, an ING-owned third-party marketer in Saint Cloud, Minn.; and two other distributors Chalke declines to identify, including a bank.

“The banking world has a particular set of problems that makes AnnuityNet attractive,” he says. “Bank platform people need a simple process, because they may sell one annuity every three weeks or so.”

In 2002, Chalke expects to see close to $500 million in sales moving through AnnuityNet each month.

“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.

AnnuityNet is owned by consortium that includes GE Equity, New York; Lincoln Financial Group, Philadelphia; Conning Capital Partners, Hartford; Sun Life Financial Services of Canada Inc., Toronto; Swiss Re, Zurich; and Bank One Corporation, Chicago.

Reproduced from National Underwriter Life & Health/Financial Services Edition, February 18, 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.

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