TOP 5 QUESTIONS ABOUT STP
(1) What is STP?
STP can mean many different things to different organizations. At its core, it is the porting of manual operational processes to technology infrastructure make up – most likely - of a variety of different components. Why is that important to note? Today, there isn’t one single platform that can address the front-to-back needs of STP for Annuities.
As a general rule of thumb, a technology component that focuses on reduction of paper can be considered a STP hone; however, there are components that IRI has certified to meet the criteria set by the industry back in 2006 that has been noted as IRI-STP1.
(2) What are the IRI STP Guiding Principles (Standards)?
The initial phase of STP produced a set of 24 “Guiding Principles” or “standards” that were meant to serve as "bigger picture" guide. In some cases, these Guiding Principles are drilled down into more comprehensive technical implementation guides which are maintained by partner solution providers known as “IRI Platinum Solution Providers”. Please note - these IRI-STP1 standards were specifically targeted to address the paper-intensive New Business process that can exist in your Annuity back-office today for both Insurers and Distributors.
Depending on the direction from our membership, there could be subsequent phases to address other parts of the Annuity Operational Life Cycle.
(3) What Benefits can STP provide my organization?
Along with the accuracy, efficiency, scalability and transparency inherent in IRI-STP1 components, incorporating these tools can also be a revenue driver that can create opportunities to penetrate into communities of financial advisors who currently do not sell annuities. The amount of paperwork required to purchase an annuity, along with integration challenges into existing managed money platforms, has been noted as an operational shortfall. The adoption of these standards will help pave the road to overcome those challenges.
IRI-STP1 also has the potential to significantly drive down operating costs. This - of course- will vary component-by-component and correlates directly to how widely adopted a particular piece is by the industry.
(4) How much will implementing STP cost by organization?
After surveying our membership, the costs from STP can range from $500,000 to over $3,000,000. Much of the cost depends on the complexity of your current infrastructure and what components you plan to implement in your first wave.
How can IRI help? We are looking very closely at the cost of implementing STP components and how to lower those costs. We believe that through effective collaboration with those who have already implemented, some savings can be realized.
Please take special note that IRI will facilitate conversations if your organization is planning to or is still in the business phase, implement IRI-STP1 components.
(5) How many organizations have adopted STP components?
From our research, over 18 large insurance companies have implemented IRI-STP1 components. Over 25 distribution companies are currently using some core IRI-STP1 components. That number will significantly increase if you include firms that clear through third party organizations.