1

ABIA Annual ConferenceOctober 8-10, 2003

Fee Income Optimism through Integrated Marketing Programs

Presented By:Nasim Ali, Executive Vice President Marketing & Sales, SBLI USAGene Schaefer, Senior Vice President, New York Community BankJim Potter, Director of Insurance, GreenPoint Bank

2

SBLI was established in 1934 by Justice Louis D. Brandeis

NYCB has been selling life insurance products since 1936

GreenPoint Bank has been selling life insurance products since 1955

History

3

SBLI was born out of a need for low-cost life insurance for middle- to low-income households

Savings Banks were seen as a viable alternative to insurance companies.

History

4

Platform Sales

Gene Schaefer, New York Community Bank

5

NYCB was the 18th bank in New York to open an SBLI Department.

NYCB is a $12.4 billion thrift, with 108 offices in New York & New Jersey and is the sixth largest bank in the nation based on its market cap. ($4.1 billion as of June 30, 2003)

The Bank currently employs: - 300 Insurance Licensed Representatives - 120 Dedicated Reps (Series 6) - 40 Investment Specialists (Series 7)

Success Story on the Platform

6

Third Party Products Include: - Life Insurance - Accident & Health Insurance - Annuities (Fixed & Variable) - Mutual Funds - Accidental Death

A Success Story on the Platform

7

Key Points for Success

- CSR model vs. Dedicated Agent Model- Bank Senior Management Commitment- Integrated Marketing Program- Insurance Company Support- Wholesaling to CSR- Training- Having the right partner

8

A One Stop Shop - A Financial Supermarket - 25 to 30% of non-deposit fee income can come from financial services

A Success Story on the Platform

9

- Executive Buy-In/Accountability - Team Leading & Coaching - Compensation - Incentives - Referral Program - Goals and Tracking

Keys To Success: Services

10

- Who are your customers? - What products should you offer? - What Strategic Partner to have? - Who should staff your branches? - Should you offer Annuities?

Before You Sell You Should Know:Services

11

MYTH: Selling Insurance, Annuities and Mutual Funds may hurt deposit growth or cause disintermediation.

FACT: Selling financial products builds brand awareness and established the bank as a financial resource center.

12

- Platform, Dedicated, or Hybrid - Set-up costs - Training & Advice - Licensing Issues - Sharing the risks - Administrative burdens: customer service, policy issuance, claims admin

Buy, Build or Rent a Sales Force

13

- Insurance Management reports through Retail Banking- License all CSRs and Branch Managers- Branch Managers report to District Managers- Establish Premium Goals for each Branch Manager- Introduce incentive compensation- Reward and recognition program- Minimum monthly goal per licensed CSR

Key Points

14

Direct Marketing & Telemarketing Jim Potter, GreenPoint Bank

15

GreenPoint Insurance

• GreenPoint Bank

• GreenPoint Mortgage

• GreenPoint Credit

16

Why Utilize Direct Marketing?

• Provides incremental revenue • Expands “insurance” brand awareness• Provides ability to target “hard to reach”

customers• Allows targeted “life event” marketing

17

Forms of Direct Marketing

• Solo targeted solicitation• Product Insert• Telemarketing• Lead generator• Internet• Statement Messaging• Statement Solicitation

18

Strategies for Success

• Align programs with distribution channels and customer demographics

• Offer a variety of products• Access the carrier’s knowledge of what works and

what doesn’t• Utilize “life event” marketing• Utilize “hot list” marketing techniques

19

Strategies for Success

• Track who buys – develop models for future campaigns

• Develop contact management database

20

Paving the way to Profitable Partnerships

Nasim Ali, SBLI USA

21

Life Insurance Industry Facts: Uninsured Americans

31% of U.S. households have no life insurance protection.

Over 40% of all Americans (104 million people) have no life insurance coverage.

The basic life insurance need is estimated to be $5 trillion.

0%10%20%30%40%50%60%70%

Households All Persons

No Life InsuranceNo Individual Life InsuranceNo Group Life Insurance

Source: LIMRA, LOMA, ACLI

22

Life Insurance Industry Facts: Uninsured Americans

The percent of households that do not have any type of life insurance has been increasing

The percent of people who do not own life insurance has been increasing also

0%

10%

20%

30%

40%

50%

Households People

Percent of Households/People With No Life Insurance

1984 1992 1998

Source: LIMRA

23

Life Insurance Industry Facts:UNDER-insured Americans

80% of Americans who are insured are dramatically UNDER-insured.*

Households with life insurance coverage have far less coverage than they need. The median amount for all adults estimated at just over $30,000.

* “…$250,000 [is the] minimum per household average many [life] insurance consultants recommend.’ See Stephen Advokat, “The Facts of Life.”

24

Target Audience Consumers

<$80K HH Income(Low to moderate income segment earning $75,000 or less HH income comprises 77.4%* of the U.S. households.)

– Women– African American– Hispanic– Asian– South Asian

Those with no life insurance or who are underinsured Heads of family or households The underserved and neglected “The people who make America work.”

Source: 2000 US Census

25

Paving the Way to ProfitsProfitable partnerships

The Financial Modernization Act - Gramm-Leach-Bliley has paved the way for marketing insurance products/services through partnerships with banks and agencies

We now have a path leading us directly to the customer.

THERE IS AN OPEN MARKET TO PENETRATE THERE IS AN OPEN MARKET TO PENETRATE

+ +

THERE IS A VEHICLE WITH WHICH TO DO ITTHERE IS A VEHICLE WITH WHICH TO DO IT

26

Banks Can Fill the Void

Banks are trusted by consumers

Banks are the Brick and Morter

Banks already posses the infrastructure to distribute financial services products

Banks are well positioned to capitalize on this open area in the market

27

Multi-channel Distribution

Bank Platform

Direct Mail

Telemarketing

Internet

Branding / Advertising

SBLI USA Integrated Marketing Plan

28

Simple Products that are Easy to PurchaseTailored and positioned for each specific distribution channel

Internet: Thank You AD&D / SeniorLife Lead Generation for Term & Whole Life

Direct Marketing - Mail or Telemarketing: Simple Issue Term / Thank You Customer Advantage Term / Employee

Group Life / Group Mortgage / SeniorLife / Thank You AD&D / SBLI USA Saver’s Club

Face-to-Face: Whole Life / Underwritten Term Simple Issue Term / SeniorLife / Juvenile Term

Integrated Marketing Plan

29

Things to Consider

When Comparing Life Insurance Companies Consider:

Value & Affordability Quality Products Products that are easy to buy and simple to understand.

30

Consider: Customer Service

Remember the importance of:

Access - a company must make use of new technologies to reach the customer.

Personal touch - friendly, knowledgeable service is key. Ease - convenient hours of service; fast and reliable

service.

31

Consider: Banking Experience

Questions to ask:

• Is your life insurance company actively seeking partnerships?

• Does the life insurance company understand the bank culture?

• Do they provide training and customer support programs for bank-licensed agents?

32

Require: Compliance and Due Diligence

Remember the importance of:

A company’s regulatory history

– assess compliance record

– review “Blue Book”

Due Diligence, while providing valuable services to the customer, offers many advantages

– increased customer retention

– cross-selling opportunities

33

A Successful Relationship

Q&A