Announcing our investment in Columbus-based Vigil, a software that helps annuity carriers offer seamless digital post-issue service to agents and policyholders.
While most Americans have heard the term “annuity” at least once — potentially from a JG Wentworth TV commercial — it’s not a commonly discussed financial product for people managing their personal finances until they’re closer to their retirement. Yet, annuities — a financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees, (Investopedia) issued by insurance carriers — have been gaining momentum.
According to the Life Insurance Marketing and Research Association (LIMRA, Jan’23), $310B of annuities were sold in 2022 setting a new record for the industry. The Insurance Information Institute (iii) depicts that from 2017 through 2021, insurance carriers’ annual revenue from annuity premiums and deposits, which are then of course invested by carriers to generate investment income — their core net margin generator, were much larger than revenue from life insurance premiums. Annuities are most sought after by soon-to-be (ages 55+ years old) and recent retirees as a guaranteed monthly income due to concerns about potentially outliving their retirement funds and concerns about market volatility during that time period. These are legitimate and growing concerns as life expectancy and cost of living continue to rise.
Serving these individuals are financial advisors that typically work with third-party distribution channels like IMOs, BGAs, and Broker-Dealers. These companies access annuities and other financial products (including life insurance) from insurance carriers they partner with (the Top 20 carriers representing ~75% of annuities sold annually), provide financial advisors with an operational tech stack, and act as their back office to manage post-issue service — one of financial advisors’ biggest headaches. That refers to when a financial advisor finds out that their client needs to make a change to their policy information (change of address, beneficiary, etc) during their annual review or ad-hoc, kicking off a 15–20 step process.
Unlike carriers in many other financial services segments, annuity carriers have yet to be serviced by modern tech solutions that can streamline processes and collaboration between stakeholders for better user experience. As demonstrated by the clunky and time-consuming process to service request policy changes to make sure an annuity is in effect, the IMO needs to have employees responsible for frequently making follow-on calls to carriers to check on the process. They can oftentimes wait weeks to receive a response from the carrier via a mailed letter, typically asking for additional documentation or to fix and re-send a Not-In-Good-Order (NIGO) submission. Even though annuities are a big industry, it has yet to be streamlined by SaaS and tech-enabled solutions.
Enter Vigil. The Vigil team is building an enterprise SaaS platform for carriers to help them streamline annuity service. This includes the digitization of existing service forms, validation rules to prevent NIGO, e-Signature collection, status tracking, and structured data outputs to unlock straight-through processing. In effect, carriers can help their customers automate annuity service and enable financial professionals to get 60% of their time back when it comes to managing their book of business. Additionally, Vigil is built API first, meaning carriers can now offer a new suite of service-oriented APIs to their more sophisticated distribution partners and other platforms across the industry.
“When we find an experienced, knowledgeable team tackling a seemingly niche industry (that’s actually huge), we get excited to see the modernization they can bring,” said Victor Gutwein, Managing Partner. “Mason and Reis know this space and can work with the existing players to help them reap dividends year after year after year in the future.”
The two co-founders, Mason Entingh and Reis Renneker, have great founder/market fit, including experience at high-growth startups like Venmo and Beam Benefits, enterprise tech teams at Ford, and Mason’s family’s financial advisory business. Through talking with potential customers and references at the distributor,, carrier and financial advisor levels, we have confirmed that there is a need by these stakeholders that has not yet been met by internal and existing solutions.
“We’re extremely fortunate to have the opportunity to tackle a problem that is so self-evident, yet lacking a truly modern solution. Our aim is to make an impact not only to carrier and advisor efficiency, but also the policyholder’s experience. Annuities are often vehicles for Americans’ retirement income, and we want to help provide the most responsive and accurate service when it comes to their nest egg.” said Mason Entingh, CEO and Co-Founder at Vigil.
About Vigil: Vigil is helping annuity carriers offer seamless digital post-issue service to agents and policyholders. For more information, please visit www.getvigil.com.
About M25: M25 is an early-stage venture firm based in Chicago, investing solely in tech startups headquartered in the Midwest. Since launching in 2015, M25 is among the most active investors in the region, quickly becoming the preferred seed investor for the next generation of Midwest unicorns. Portfolio companies include Kin Insurance, Loop Returns, Astronomer, Summersalt, SteadyMD, Branch, Authenticx and more. Learn more at m25vc.com.
