International Journal of Information Management: The Journal for Information Professionals
Information Systems Frontiers
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Over the next years, the ageing profile of the UK population will lead to a sharp increase in the volumes of pension annuity sales. Every individual that participates in a defined contribution occupational or a personal pension scheme is obliged to convert the capital accumulated into a regular post-retirement income by purchasing an annuity before the age of 75. To ensure a more competitive market the UK Financial Services Authority has ruled that from 1 September 2002 pensioners must be informed that they have the right to purchase their annuities from suppliers other than their current pension provider-this is termed exercising an open market option (OMO). However, the complicated nature of pensions and annuities means the purchase of an annuity is highly dependent upon the information provided by the sellers of these products and the advice received. Given that OMO's are supposed to encourage purchasers to be able to access information on a whole range of annuities from the various suppliers in the market, a single web-based hub that linked manufacturers, distributors and existing industry portals seemed the obvious solution to the challenges facing the industry following the government legislation. However, while the industry recognised that a single product purchasing and servicing system would meet the data management needs of all its stakeholders and carry enormous potential to realise cost and business process efficiencies, the competitive nature of the industry and the slow decision making processes within the individual companies has meant that the project to build 'The Annuity Exchange' has suffered a number of setbacks and delays. This article describes the business case for 'The Annuity Exchange', its objectives and design, and the technical/industry engagement issues it has faced.