Uptick in demand prompts calls for sales and processing technology

TOPEKA, Kan., May 23, 2011 - se2, a leading provider of business technology and processing solutions for the financial services industry, responded quickly to the rapid surge in indexed annuity sales late last year by helping the insurance market adapt quickly to this fast-growing market, according to se2 CEO Dave Keith.

"Our customers and new insurance companies that are not our customers are besieging us with calls for sales and processing solutions to respond quickly to this market," Keith said. "We have the expertise to quickly serve annuity providers eager to capture market share." se2 can launch a product in a matter of weeks, not quarters. In fact, the company recently launched a new product for a carrier in a mere 22 days.

The indexed annuity market scored a strong uptick in the third quarter, setting a new record high total of $8.7 billion, up 6 percent from the prior quarter and 16 percent over the third quarter of 2009, according to LIMRA, an insurance industry data and research organization. Indexed annuities now represent 41 percent of the fixed annuity market, LIMRA says.

Several factors contributed to the surge:

• Congress passed and the president in July signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which created a safe-harbor for indexed annuities that, if followed, assures that they are to be regulated as fixed insurance products, not securities. This removed doubts about whether insurance agents, vs. registered representatives of brokers/dealers, could sell these annuities.
• The continuing recession has driven consumers to investment products with less downside risk, which indexed annuities can provide with features such as guaranteed income riders.
• The volatile equities markets, combined with other technical factors, attracted some conservative investors who previously might have preferred traditional annuities with fixed rates.

First introduced to the insurance market in 1995, indexed annuities are variations of the fixed annuity. Over the years, the SEC and the Financial Industry Regulatory Authority, Inc. (FINRA) suggested that indexed annuities be treated as securities until Congress settled the matter last year.

"The quick rise in activity in this product indicates that investors are ready for the product and that insurers and similar financial services firms are rushing to meet the need," Keith said. "As this product sector grows, savvy companies want to have the infrastructure in place not only to meet the heavy demand, but to continue to serve those customers effectively while continuing to grow the business. We can accommodate large caseloads and customize programs to serve marketing and reporting requirements."