DTCC Connection

Sep 01, 2010 • DTCC Connection

I&RS Proposes New Data Service To Provide Market Transparency

by Crystal Bueno


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Insurance & Retirement Services

DTCC Insurance & Retirement Services (I&RS) is working on a prospective new data service that has the potential to give customers an unprecedented view of market activity in annuities.


This new analytics reporting service, currently under development and scheduled for pilot in early 2011, will aggregate data derived from DTCC's daily processing of annuity transactions, including investments, redemptions and exchanges. The resulting information could provide distributors, investment managers and carriers with detailed information on their own business performance, as well as the ability to perform benchmarking against the larger industry and peer groups.


"DTCC is at the heart of the industry, connecting insurance carriers with broker/dealers and other product distributors," said Adam Bryan, managing director, DTCC Insurance & Retirement Services. "We are in a uniquely central position to be able to make certain data transparent to our clients. We process approximately 150 million annuity transactions each month, which means we have at our fingertips a tremendous amount of industry information and market intelligence."


Power of information

The proposed new service could help firms save money by getting benchmarking analysis from one trusted resource, DTCC, rather than attempting to conduct this research on their own, at an individual level.


This will drive down overall cost, allowing firms to concentrate on the analysis of the data as opposed to just gathering the data. It could also help carriers make better decisions in how they market themselves and how to enhance their products. For example, besides having a central tool to analyze common transactions, the information could be used by firms to understand demographic, geographic and sales trends, and support decision-making about:


  • •Net distribution and revenue flows
  • •Effectiveness of products and sales performance
  • •Market shares within demographics including state, customer age and type
  • •Positioning by product type or features
  • •Areas or types of investors that represent potential or need increased attention
  • •Product development
  • •Targeted marketing, sales and advertising initiatives
  • •Competitive advantages and disadvantages
  • •Wholesaler effectiveness, and strategies for wholesaler and sales force training and deployment
  • •Opportunities and threats that may not be otherwise apparent.

In addition, firms will be able to monitor – with a great deal of effectiveness – trading for compliance and regulatory purposes.


The DTCC advantage

Leveraging DTCC's transaction data for enhanced market transparency is not a new idea: the Deriv/SERV business has been releasing credit default swaps data weekly on www.dtcc.com since November 2008, and since March, the Fixed Income Clearing Corporation (FICC) has responded to regulators by publishing fails data online for all Treasury securities trades submitted to FICC for settlement.


What is pioneering about the proposed services from I&RS, however, is how this data will be collected, stored, packaged and distributed.


"There is no one in the industry positioned like DTCC I&RS to extract and provide metrics to the market based on actual transactional flows," said Leonard Schmitt, DTCC group director, I&RS Relationship Management. "We are hearing a very positive response from our customers about the possibility of becoming a data provider, especially if it means we can improve market transparency while at the same time transforming the way the insurance industry analyzes its business."


Delivering new value

An advisory group specifically focused on this new data analytics service has been formed to help determine how this intelligence and data should be used, and what kinds of information should be presented.


"With this service, we believe users stand to benefit from significant savings, enhanced management capabilities, improved competitiveness and improved business performance," said Susan Nugent, DTCC director, I&RS Relationship Management. "As our processing volumes continue to increase, this proposed service is one way to deliver new value to our clients and the industry as a whole, through the analysis and distribution of transaction data." @


[Because this data service has such potential for many different users, I&RS wants a broad range of customers and prospective users to be represented in this advisory group. For further information on the data analytics service, or to participate on the advisory group, please contact your I&RS relationship manager.]


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