The Phoenix Companies (Hartford) decided to enter the fixed indexed annuities market in late 2009, in the wake of the financial crisis, when middle-market consumers were seeking products with less downside risk that could still provide acceptable levels of return in a low-interest environment. Having gone from zero to $1.5 billion in fixed indexed annuity funds under management in only two years, the company has launched unique distribution platform to carry its major growth initiative forward.
Phoenix's product and technology strategy is aimed at supporting agents who are facing new challenges with the emergence of more complex products and related regulatory compliance requirements, according to Mark Fitzgerald, national sales manager for Saybrus Partners, Phoenix's distribution subsidiary.
"In the last few years there's been a major evolution both in products and in additional requirements around suitability, and in the number of forms agents have to process," elaborates Fitzgerald. "As a result agents are spending more time completing and correcting paperwork."
To reduce the burden on agents, earlier this year Phoenix launched the REALIZE personal retirement analysis tool, which is designed to intuitively assist agents and financial advisors as they guide clients through retirement planning conversations and individual needs assessments. This morning the company announced its eApp electronic application platform, based on Insurance Technologies' (Colorado Springs, Colo.) Firelight business fulfillment solution, that enables users to instantly submit annuity application forms through a secure web portal. Used in conjunction with REALIZE, eApp prefills many required data fields based on information collected during the needs discussion and product quoting process.
"Today an agent could have to deal with a dozen or more forms as part of the process, as opposed to two in the past," Fitzgerald notes.
REALIZE and eApp combine to create what Fitzgerald calls a more holistic approach that gathers all the information important to determining suitability during the educational process and populates it across all the relevant forms.
"We believe Phoenix's experience is fairly representative of the industry with close to half of our paper application forms submitted 'Not in Good Order.'" Fitzgerald confides. "The accuracy controls of eApp save agents, brokers and advisors from extra time and hassle fixing errors in annuity applications."
Phoenix began the creative work on eApp's functional parameters in Aug. 2011 and tapped Insurance Technologies, with whom the carrier has been working since the early 2000s, according to Don Griswold, second VP, product implementation and shared service."We wanted to design a solution that worked for Phoenix, but it was paramount that it would work for the independent channel, so we went to great lengths to demonstrate in various prototypes suitable to the offices designated for our pilot," Griswold says. "A solution is only as good as what the agents think of it."
Phoenix began constructing eApp, using an Agile approach, in the last quarter of 2011. Following initial development, the team went through a series of testing cycles focused on REALIZE and Phoenix's quoting tool to monitor the functioning of business rules through the e-application process. Submission testing on Phoenix's new business platform followed.
"We began the pilot on June 4," Griswold adds. "We've been working with the pilot offices and on Oct. 1 we will deliver a new version of the software to the remaining distribution organization."
Phoenix has invested about a half million dollars on REALIZE, its quote tool and eApp, including both internal and external resources. The company expects a return on its investment within three years, based on conservative assumptions.
Saybrus Partners' Fitzgerald declines to be specific about sales goals, but acknowledges optimism about Phoenix's future in the fixed indexed annuity marketplace.
"To compete in this market you need to diversify product offerings, and with our most recent releases we're on the front end of that curve," Fitzgerald comments. "Now we're leading in both the technology and product offerings in today's market."