Provider sees Straight Through Processing of annuities to be critical bridge for financial services providers
HERNDON, VA • February 2, 2009 – EbixExchange – a division of Ebix, Inc. (NASDAQ: EBIX) – today announced an annual run rate of $35 billion in US annuity premium payments currently being processed through its AnnuityNet Platform. The rate is the highest yet reported by the industry leader in commercial life insurance and annuity automation.
“Overall, annuity sales in the US have continued to steadily increase, and our share of the related transaction activity through AnnuityNet has also increased,” said EbixExchange Senior Vice President Dan Delity. “Since 2006, overall the percentage of premium processed through AnnuityNet has steadily increased from just over 6% to approaching 12% of all fixed and variable annuities sold in the US. We estimate that we are currently processing over half of the total annuity business in the US full-service brokerage sector.”
The AnnuityNet Platform enables brokerage firms to fully automate processing of annuities by providing compliance workflow management and oversight, suitability adjudication, and reporting. The platform also increases back-office efficiency by providing an electronic internet-based system that correctly completes all forms, curtailing errors and virtually eliminating “Not in Good Order” (NIGO) business.
The annual run rate is based on the 8.7 billion in premium processed by AnnuityNet in the fourth quarter of 2008. During the month of October, over $4 billion was processed through AnnuityNet. EbixExchange reported AnnuityNet as processing $21 billion of the $247 billion in total annuity premium estimated for 2007.
“Market sales of variable annuities slipped somewhat in the third quarter of 2008, but market sales of fixed annuities continued strong,“ said Delity. “When they are published, fourth quarter results from market sources for both fixed and variable annuities will help us determine the market percentage of premium processed by AnnuityNet for all of 2008.”
Delity also commented, “We are anticipating a strong outlook in 2009 as the value of our automation, given the current economy, is now even more critical to annuity distributors and carriers who are forced to reduce their operational costs. Additionally, new correspondent broker/dealers have been adopting AnnuityNet at a record pace. 76 additional broker/dealers came onto AnnuityNet in just the last 12 months, and more are currently in the process and are expected to be implemented before the end of first quarter 2009. We expect that the compliance support and processing efficiency footprint of AnnuityNet will help all of our clients lower costs, create efficiencies and help combat current market conditions.”
The new annual run rate, a record-level for both EbixExchange and the industry, is also cause for EbixExchange to thank its client partners. “2008 has proven to be an exceptionally dynamic year, and the industry is now challenged by a weakening economy,” said Delity. “EbixExchange and our clients, through close partnerships, continue to persevere; moving from one production release to the next and continuing the important work of advancing paperless Straight Through Processing and addressing ever-complex client compliance needs. We thank our clients for the opportunity to continue to serve them.”
EbixExchange is the division of Ebix, Inc. that focuses on research, illustration, transaction processing, and compliance automation for the life insurance and annuity industry. Combining the expertise of pre-merger industry pioneers EbixLife and Finetre Corporation, EbixExchange is a leading developer of electronic Straight Through Processing and currently supports a broad range of insurance agencies, brokerage and clearing firms, and operations centers at over 60 of the leading insurance carriers and their affiliates. EbixExchange’s parent company, Ebix, Inc., is a publicly-held corporation (NASDAQ: EBIX). For more information, please visit http://www.ebixexchange.com.
About Ebix, Inc.
Ebix, Inc. is a leading international supplier of software and e-commerce solutions to the insurance industry. Ebix provides a series of application software products for the insurance industry ranging from carrier systems, agency systems and exchanges to custom software development for all entities involved in the insurance and financial services industries.
Ebix strives to work collaboratively with clients to develop innovative technology strategies and solutions that address specific business challenges. Ebix combines the newest technologies with its capabilities in consulting, systems design and integration, IT and business process outsourcing, applications software, and Web and application hosting to meet the individual needs of organizations.
With bases in Singapore, Australia, the US, New Zealand, India and Canada, Ebix employs insurance and technology professionals who provide products, support and consultancy to more than 3,000 customers on six continents. Ebix’s focus on quality has enabled it be awarded Level 5 status of the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model Integration (CMMI). Ebix has also earned ISO 9001:2000 certification for both its development and call center units in India. For more information, visit http://www.ebix.com.