From increasing trading relationships between distributors and carriers to promoting greater services usage and introducing new industry solutions, Insurance Services fired on all cylinders throughout 2005, helping customers through the benefits of automation and partnering with the industry to spur meaningful growth.

“2005 was a solid year for Insurance Services,” said John Ziambras, managing director, Insurance Services. “We saw increased adoption of our services, particularly in the compliance area. We launched new solutions and tools that were identified by the industry as priorities and key to how our participants operate. And we continued to build on and strengthen our ties with customers, business partners, and the industry overall, working together to drive greater growth, efficiency, and innovation.”

In 2005, product level trading relationships in Insurance Services between distributors and carriers rose to more than 4,900, versus 3,977 in 2004, an increase of 23%. Total customers in production increased to 275 distributors and carriers, reflecting an increase of 3 carriers and 25 distributors from 2004.

FAR and Away Growth

Usage of Insurance Services core products continued its strong growth in 2005.

The biggest jump was in Financial Activity Reporting (FAR), where volume rose 49% over the previous year. One of Insurance Services fastest-growing solutions, FAR processed almost 23 million records for the year, versus 15.4 million in 2004.

Looking at other services, transaction volume for money settlement services, including Commissions (COM), Applications (APP), and Subsequent Premiums (SUB), rose 25% to almost 45.2 million transactions for the year, compared to about 36.1 million records the previous year. The total value of money settled by these services also registered impressive growth in 2005 — $13 billion — 16% higher than the $11.2 billion settled in 2004.

Also showing a healthy performance in 2005 was Licensing & Appointments (L&A), which enjoyed a volume increase of 24%, climbing to 5.4 million transactions, versus 4.4 million in 2004. Volumes for Positions & Valuations (POV) rose, too, reaching almost 2.3 billion transactions — up 29% over the 1.7 billion transactions processed in 2004.

“Most of our services growth is being driven by customer compliance needs,” said Lana Macumber, director of Relationship Management, Insurance Services. “This is certainly the case with FAR but also true of APP/SUB, L&A, and POV. Compliance has moved to center stage for the industry, thanks to Sarbanes-Oxley, USA PATRIOT Act, and other supervisory mandates. Our customers are increasingly turning to us for help in managing the impact of these regulatory demands and viewing us as the logical solution provider to their needs.”

New Needs, New Services

In terms of new services, the highlight of 2005 was the launch of ACATS/IPS. ACATS/IPS facilitates annuity account transfers between broker/dealers, agent changes within a broker/dealer, and transactions such as broker identification number changes. With annuity assets maintained within carrier systems, ACATS/IPS adds value by providing broker/dealers with the opportunity to include annuity assets within their comprehensive account transfer process and giving them timely, automated access to important information about their customers’ portfolios.

Another new offering was E-Learning, a web-based training tool designed to provide participants with business and technical education on various Insurance Services’ solutions. In 2005, Insurance Services introduced two E-Learning modules for its COM and POV services. Insurance Services will continue to expand E-Learning to give customers a quick and easy way to obtain on-line information about all its services and better support their needs.

Working together with customers, business partners, and the industry at large to mainstream the sale and servicing of insurance continued to be a strategic imperative for Insurance Services. A case in point is last year’s SIA Advocacy Paper. Embracing a series of initiatives by DTCC, as well as the National Association of Variable Annuities (NAVA) and Association for Cooperative Operations and Research Development (ACORD), the paper aims at furthering the adoption of standards-based technology solutions to enable straight-through processing for insurance carriers and distributors.

“We invest a lot of time and effort to ensure our relationships with customers, business partners, and industry organizations are the strongest they can be,” said Ziambras. “Working together helps maintain everyone’s financial health and productivity and allows us to coordinate our efforts and influence positive outcomes for the benefit of the entire industry.”