Thursday Oct 16, 2014

Market Value Adjusted Annuities

Changes in market conditions are leading carriers to make changes to their product offerings. “A lot of annuity carriers already have MVAs, but those that don’t are busy adding them to their products right now,” says Danny Fisher, president of the Fisher Agency, a Dallas brokerage general agency. The carriers are persisting on securing MVA approvals largely because of concerns about the interest rate environment, Fisher says. Today’s fixed annuities are paying very low interest rates, he explains.

MVA Annuities on the Rise

Let’s take a look at what’s happening in the MVA annuities market. Last year, while MVA annuity sales were up 88 percent over second quarter compared to fixed-rate non-MVA products were up 71 percent, income annuities were up nearly 19 percent, and indexed annuities were up 10 percent, according to Beacon’s third quarter report.  Similarly, when compared with third quarter performance of the previous year, MVA annuities in third quarter 2013 were up by staggering 131 percent, while fixed-rate non-MVA gains were less than half, about 61 percent.

$2.5 billion worth MVA sales in third quarter were up from $1.3 billion in second quarter. That growth says a lot about the current direction of the MVA segment: Sales are chasing rates. With this level of growth, carriers will need tools to help them manage this business in an efficient way.

Selecting the Right Core Admin Solution to help with MVA Annuity Management

Generally,  MVA annuity is treated as a fund that tracks the prevailing rate. Some products use calculated values stored in fields on the policy in lieu of a fund. A good life insurance policy administration system that maintains MVA annuity products should be:

  • Configurable to allow each carrier's version of MVA
  • Calculations should be customizable based on their product's profile
  • Be able to carry out a series of calculations using the results of each prior calculation, so as to arrive at the finalized; Cash Surrender Value after the MVA factor and then MVA has been calculated per set formulae.
  • Capable to quickly apply any changes/modifications to the formulae.

With the consistent growth in sales of Market Value Adjusted annuities, inevitable indications with various surveys have lead to suggest that Market Value Adjusted annuity products can boost growth in business for carriers of any size. Oracle Insurance Policy Administration provides a highly configurable and flexible platform that enables the carriers to quickly build and sell various custom products including Market Value Adjusted annuities with record speed-to-market times leveraging the highly customizable calculation capabilities and pre-built templates.

To learn more about Oracle Insurance Policy Administration for Life and Annuity and how Oracle’s solutions can be used to support your business, visit oracle.com/insurance.

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Tuesday Aug 12, 2014

Accelerating Speed to Market with Product Templates

To drive competitive advantage, life insurance and annuity carriers must continuously innovate within their product portfolio to move new products to market rapidly and efficiently. However, traditional lengthy product lifecycle management processes are still slowing the time required to launch new products to the market. Around 70% of small and mid-sized insurance businesses are still using manual or partially automated methods, taking several months to launch new products. This drives up development costs, delays ROI and leads to the loss of potential new business.

What if you could accelerate development and launch products to market in days rather than

By extending each predefined product template (also called a chassis), insurers can quickly define custom products, create user-defined transactions, and add new business processes and regulatory requirements at the product, product line, and company levels.

Use of templates can help reduce time by providing a vision of what is possible within the policy administration system. Also, it provides a starting point of common best practices that can be adapted to business - so the carriers do not have to start from scratch, allowing them to better align business processes to get the most value out of new IT investments.

Product Templates:

Templates are documented, predefined set of product definitions built out to demonstrate a particular way to address policy life-cycle processing. The template specifications include the definition of the underlying features, transactions, calculations, tables and business processes. This will help carriers to get a jump start of the product life cycle for implementation of traditional and non-traditional life products, increasing the ability to help reduce the time and cost to launch new products.

Key components to look forward from a

  • Wide variety of products need to be available as part of Templates
  • Pre-Configured (Reusable) calculations to support standard regulatory calculations
  • Pre-Configured (Reusable) set of standard life cycle events/transactions
  • Clear documentation for Product specifications and implementation design
  • Utilities to easily copy these templates to new plan/product

This template-based approach gives insurance carriers several benefits

  • Faster product life cycles with enhanced speed to market
  • New sources of ROI, delivered faster.
  • Efficient product management cycle.
  • Increased productivity with reduction in efforts for product-development stage.
  • Build better relations with distribution partners due to greater flexibility and market responsiveness.

Oracle Insurance Policy Administration (OIPA) Template Library

Template Plan Name Availability
NBU Term Life GA
Level Premium term GA
Indexed Universal Life GA
Group Disability GA
Group Term Life GA
Whole Life Will be available soon
Life Bonus Variable Annuity Will be available soon
Term Life ROP Will be available soon

*GA – General Availability

For more information on Oracle Insurance Policy Administration for Life and Annuity, visit oracle.com/insurance.

Don’t forget to keep up with Oracle Insurance year-round:

Tuesday Oct 09, 2012

A case for not installing your own software

A programmer’s pitch for cloud computing and engineered systems.

[Read More]
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Oracle's flexible solutions can help insurers navigate the change necessary to meet today’s challenges and have the business agility to be prepared for the future.

For mor information, visit oracle.com/insurance.

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