A Los Angeles insurance underwriter has developed a high-tech approach to boosting its sales of fixed and variable annuities through banks.
Security First Group recently announced that it was making three integrated technology systems available to banks that sell its annuities.
The products include InTouch, a 24-hour interactive telephone voice response system; Client Data Access, which fetches client investment information from bank branches; and New Business Management System, which is designed to reduce policy issue time and to eliminate the duplication of data entry.
"Bank employees will have the customers' annuity contract information at their fingertips just like they have bank account information available in their branch," said Michael R. McCoy, Security First's senior vice president.
Kenneth Kehrer, a Princeton, N.J.-based banking consultant, said the systems represent a step forward in linking banks with their annuity customers.
However, he noted that the systems provide access for Security First Life customers only, causing a slight problem for banks with more than one annuity underwriter.
"If you put yourself in the shoes of some banks with more than one annuity, you would want to use a system which integrates all of them," Mr. Kehrer said. "Some banks might start out selling from only one annuity underwriter, but they will eventually sell more than one."
Mr. McCoy said some financial institutions have tried to buy Security First's systems, which were developed in-house, but that it is not for sale.
"We have developed these products with the idea of deepening relationships and adding value, not with spinning it off as a separate product at this point," he said.
Mr. McCoy said it cost Security First $1 million to develop the integrated systems.
"We tried to create new technology improving upon existing technology," he said. "We looked at what other major annuity providers were giving to client banks. Then we went to two of our client banks and asked what would add the most value from a technology bank."
One bank testing the product is $3.5 billion-asset Citizens Consumer Financial Services, Burtonville, Md. - a subsidiary of Citizens Financial Corp..
The systems have been running for a few months fairly smoothly, according to bank officials.
Paula Warner, president of the Citizen's Brokerage Service, said, "There hasn't been a significant change in productivity yet, but when the second phase (allowing the bank to access customer information) is installed this summer, that's where we will see some clear changes," Ms. Warner said.
Security First's annuity program also benefits from having the American Bankers Association exclusive endorsement.
