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Association of Financial Mutuals 26 May 2010 Keith Boughton – Director, Insurance and Payroll Brian Please – Business Development Manager, Insurance and Payroll The Xafinity Group A company focussed on delivering service excellence • Annuity Administration & Payment • Corporate Pensions Consultancy, Administration & Actuarial services • Pensions Administration Services • SSAS and SIPPS • Bulk Annuity Administration & Payment • Transaction Services • Mortality Analysis and Benefit Pricing • Pensioner Payroll Services • Banking Services • Collection Services • Liability Modelling & Deficit Management • Professional Services • Scheme Terminations • Training Services • Independent Trusteeship • Flexible Benefits • Healthcare Services • Communications • Investment Consultancy • Learning & Development Training • Pensions and Actuarial Software Solutions • Data validation Scale of Xafinity Paymaster’s Operations … for smaller scale & start-up businesses to exploit 45 million BACS payments per annum 2.5 million benefit calculations per annum Payments valued at £11 billion per annum 600,000 calls per annum 100,000 address changes per annum Manage 865 pension arrangements Administer over 500,000 active and deferred pensions Pay 2.2 million Pensioners & Annuitants Payments made to approx 180 countries Handle 1 in 10 UK deaths Why have we become an Associate Member of AFM? • • • • • • • • Actively engaged with the insurance market Relationships and solutions for AFM members large and small Alignment of culture given our public sector heritage AFM members are under increased scrutiny and pressure from the FSA, Solvency II and the economics of staying in business AFM’s own loyal members / policyholders are facing dramatic social changes arising from longevity and resulting financial challenges of sustaining a lifestyle over a 20-30 year retirement period Xafinity Paymaster offers solutions that leverage our strengths in pensions and annuity administration By sharing our knowledge and experience we can all better understand and adapt to meeting these challenges Give all parties a greater opportunity to determine sound courses of action that will lead to greater growth and prosperity The Value to your Members in looking at the Retirement and Annuity Market • Having invested in enhancing, developing and achieving brand loyalty in your members … why not retain them for a lifetime? • “Providing financial security…enhance people’s welfare …fair, simple, accessible value-for-money products” • The Annuity / Retirement Opportunity • • • • • Further 20-30 years of products, services and value Retention of Funds under Management With Profit Annuities – on-going membership, W/P New Business (FSA) Simple Lifetime Annuities – fair value, brand loyalty Against a backdrop of issues of including Solvency II, compulsory annuitisation(?), NEST, … • Opportunity for Mutuals and Friendly Societies • • • • Profile and shifting demographics of your target customer base Close alignment of skills and potential of your existing businesses Ability to develop viable forward strategies in the retirement space Existence of small scale, low entry, cost-effective, proven, fit-for-purpose, outsourced annuity solutions New Product Opportunities Exist for Staged Retirement Emerging Model 75-80 60-65 Pre-Retirement Staged Retirement Full Retirement Annuity Product Opportunities State Pension DC Pensions DB/DC Pensions Personal Pensions Tax Free Cash SIPPs Variable Annuities Stakeholder Pensions Income Drawdown NEST (PADA) Working longer Temporary Annuities ISA With Profit Annuities Property Enhanced Annuities …… Value Protection State Pension DB/DC Pensions Lifetime Annuities Equity Release Long Term Care …… Straight-through Processing (STP) Works for Annuities Annuity Gateway •Filters, Secure access, Data Validation •xml, pdf, GUI interface options •Portal integration Customer Hosted / Outsourced Provider Services IFA •Client data •Application data •Medical data (if required, including dynamic CQRF) •Automated pre-population of data throughout •Quotations & Illustrations •Underwriting (if required) •Pension Transfer / Discharge (incl. ABI Options) •New Business administration •Annuity Policy administration •Payroll administration (incl. HMRC reporting) •Death Claims administration (incl. dependent benefits) Portals Ceding Co HMRC What are the real Benefits of an STP Annuity Solution? • Costs less, of a magnitude less than historical implementations • Lower entry costs make the entire annuity product launch commercially feasible • Reduced time to market (3 months from specification) • Reduced risk (operationally stable, proven, replicable) • Backed by leaders in annuity distribution & administration • Self-contained, virtual solution • Immediate connectivity into the intermediary market • Full service for internal vesting pensions • Reduced ongoing costs to support regulatory compliance as a result of shared service development and maintenance costs Meeting the Requirements for an Annuity Product Launch • • • • • • • • Capital Product design and development Reassurance and pricing Route to market Quotation, illustration and application systems and processes Application, administration and accounting Annuity payment and management Project management No Yes Help Yes TAC Yes Yes Yes Yes Xafinity Paymaster The Annuity Corporation (TAC) • • The Annuity Corporation has been set up to bring together the expertise to advise and deliver effective annuity strategies and solutions to corporations and insurance companies TAC is a sister company of the Annuity Exchange, provider of the first comparative annuity portal, delivering quotation services including Annuity Marketing Services (AMS) and tied distribution channels