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Old Economy Meets New at

LEESBURG, Va. - The Old Economy is meeting the New Economy in this sleepy Virginia town where the headquarters of America Online, MCI, Exodus and high-tech Internet start-ups nestle amid rolling green hills, bales of fresh hay and the estates of Virginia blue bloods., a company offering no-load, low cost annuities online, based in a renovated 1890 barn which is part of quaint Market Station, a train station converted into a shopping center, is one of the new breed in the neighborhood.

The setting provides an appropriate analogy for what is trying to accomplish - to make customers see an old product in a new light.

"An annuity is a great product idea, but it has never been brought to the general population," said Shane Chalke, president and CEO of in an interview recently at the company's headquarters. "We are trying to make annuities modern and easy to own. Take the very fact that you have to apply for an annuity - you don't walk into Starbucks and apply for a cup of coffee."

It is only because of tradition that it is done that way, said Chalke, 43, who spoke about his vision for annuities in a first floor conference room of the barn, flooded with sunshine. is attempting to make the language of annuities more familiar and to simplify the process of buying and owning an annuity so that it is more like mutual funds or stocks, Chalke said.

"Annuities are a very powerful investment product that just happens to be sold by the insurance industry," Chalke said.

"Traditionally, variable annuities have been built for the people that sell them, not the people who buy them," said Steve Dunlap, vice president for the independent financial advisor channel at "After an annuity is sold, the insurance company has no contact with the customer, except through the quarterly statement. Usually, a variable annuity is treated like an insurance policy, which an insurance company sells and then forgets about. We treat an annuity like an investment, like a tax-deferred mutual fund account. As such, it needs to have the same functionality online." The insurance part of the product is incidental; the tax deferral aspect is more important, he said.

This idea informs several avenues of AnnuityNet's business.

The company runs a consumer website,, which sells annuities directly to consumers online., launched in July, is a website for financial advisors which allows fee-based independent financial advisors to serve annuity policyholders' accounts directly. AnnuityNet also has formed partnerships with several companies, including Bank One and TD Waterhouse, to develop "Annuity Centers" on their websites that offer the same products available on but with the individual companies' names on them. The company is now looking into forming partnerships with commission-based advisors, licensing technology to them for use in selling their own products. is able to offer and service annuities through these various channels with the speed and dexterity of a small, efficiently-run start up company. Altogether, there are 30 employees stationed in the barn. Including a call center staff provided by a third party and development contractors, the company employs approximately 50 people, Dunlap said.

"The fact that we are a small company makes it easier to get things done," said Kristina Meyer, vice president of partner development. "It also proves you don't need to have hundreds of people on staff to do a lot of business." Insurance companies are stunned at how fast AnnuityNet moves, she said.

"What used to take three months to bring to market now takes eight weeks," Dunlap said. "Speed to market has dramatically increased."

In 1983, Chalke founded his first company, Chalke Inc., in Chantilly, Va. and developed the PTS (profit testing system) software - an analytical risk management package that is now used in 80 percent of U.S. insurance agencies to track policies. In 1995, Chalke Inc. merged with Security Software & Consulting of Windsor, Conn. Chalke's next vision was to develop an annuity marketplace which would make the products simpler to buy and own. As an actuary and product designer, Chalke was familiar with annuities and sought to change their image.'s open and relaxed office environment reflects Chalke's ambition to change the image of annuities.

Chalke said he chose AnnuityNet's headquarters in Leesburg, approximately 15 miles west of Dulles Airport in northern Virginia, in order to give employees an unusual work environment.

"I wanted people to have a workplace a little more unique and more funky than a three-story cinderblock building," Chalke said. Leesburg is still located close enough to the technology center in Reston, Va. to attract and retain tech employees.