BENCHMARKING STUDY LIFE INSURANCE OPERATIONS EXPENSE ...public.deloitte.com/media/0305/TOCs/LIONS_04_TOC_Appendices.pdf · BENCHMARKING STUDY LIFE INSURANCE OPERATIONS EXPENSE SURVEY

BENCHMARKING STUDY

LIFE INSURANCE OPERATIONS EXPENSE SURVEY

(LIONS)

December 2004

11 Oak Street, Suite 400 Cresskill, NJ 07626-2256

TABLE OF CONTENTS

© 2004 TCi Consulting & Research, 11 Oak Street, Suite 400, Cresskill, NJ 07626-2256 (800) 834 -1786 Page i Proprietary and Confidential

List of Charts...............................................................................................ii

I. INTRODUCTION.......................................................................................1

II. EXECUTIVE SUMMARY ........................................................................3 KEY FINANCIAL METRICS A. Adjusted Line of Business Expense..........................................................................11 B. Total Operations Expense.........................................................................................15 C. Total Operations and Total New Business and Customer Service IT Expense ............................................................................................................19 BUSINESS PROCESSES A. New Business (NB) Operations and Total New Business IT Expense.....................24 B. Customer Service (CS) Operations and Total CS IT Expense .................................27

III. SURVEY FINDINGS................................................................................33

IV. APPENDICES .........................................................................................125

APPENDIX A – TCi LIONS 2004 GLOSSARY.........................................................126 APPENDIX B – TCi LIONS 2004 COMPREHENSIVE LIST OF DETAILED DATA TABLES (also TABLE OF CONTENTS FOR TABLES PUBLISHED IN THIS REPORT)....................................................178

V. END NOTES............................................................................................200 © 2004 by TCi Consulting & Research. All rights reserved. No part of this report may be reproduced

in any form or by any means without permission in writing from the copyright owners.

LIST OF CHARTS

© 2004 TCi Consulting & Research, 11 Oak Street, Suite 400, Cresskill, NJ 07626-2256 (800) 834 -1786 Page ii Proprietary and Confidential

A. Adjusted Line of Business (LOB) Expense...........................................................11

Chart 1 - Trend: Adjusted LOB Expense per Inforce Policy.................................12 Chart 2 - Trend: Adjusted LOB Expense per $1,000 Total Annual Premium.......13 Chart 3 - Trend: Adjusted LOB Expense per $1,000 Total Inforce Face Amount ................................................................................................14

B. Total Operations Expense ......................................................................................15

Chart 4 - Trend: Total Operations Expense per Inforce Policy .............................16 Chart 5 - Trend: Total Operations Expense per $1,000 Total Annual Premium ..................................................................................17 Chart 6 - Trend: Total Operations Expense as a Percent of Adjusted LOB Expense........................................................................18

C. Total Operations and Total New Business and Customer Service IT Expenses ..............................................................................................................19

Chart 7 - Trend: Total Operations and Total New Business and Customer

Service IT Expense per Inforce Policy ................................................20 Chart 8 - Trend: Total Operations and Total New Business and Customer

Service IT Expense per $1,000 Total Annual Premium ......................21 Chart 9 - Trend: Total Operations and Total New Business and Customer

Service IT Expense as a Percent of Adjusted LOB Expense...............22

D. Business Processes...................................................................................................23

Chart 10 - Trend: New Business Operations Expense and Total New Business IT Expense per $1,000 Total First Year Premium...............................24 Chart 11 - Trend: New Business Operations and Total New Business IT Expense per Written Applications .......................................................25 Chart 12 - Trend: Customer Service Operations and Total Customer Service IT Expense per $1,000 Total Annual Premium ...................................27 Chart 13 - Trend: Customer Service Operations and Total Customer Service IT Expense per Inforce Policy .............................................................28 Chart 14 - Trend: Customer Service Operations and Total Customer Service IT Expense as a Percent of Adjusted LOB Expense............................29 Chart 15 - Trend: Customer Service Operations and Customer Service IT IT Expense per Customer Service Transactions ..................................30

APPENDIX A – TCi LIONS 2004 SURVEY GLOSSARY

© 2004 TCi Consulting & Research, 11 Oak Street, Suite 400, Cresskill, NJ 07626-2256 (800) 834 -1786 Page 127 Proprietary and Confidential

1035 Exchange The exchange of life policies and annuity contracts where one policy or contract is surrendered and the surrender value is transferred to another policy or contract on a tax-deferred basis. If the two policies or contracts are issued by different companies, this is called an external exchange; if they are issued by the same company, it is called an internal exchange. External exchanges from your company to other companies are reported as Disbursements-Transfers of Assets - Out. External exchanges from other companies to your company are reported as New Business - Transfers of Assets - In. Internal exchanges between annuity contracts are reported as New Business - Internal Exchanges. Internal exchanges between life policies and annuity contracts are reported as Disbursements-Surrenders/Withdrawals and New Business-New Issues. 5498 Form A form required by the IRS to be released to all IRA, SEP, Simple and Roth IRA clients showing the amount of tax year contributions received. Abandoned Call Rate The percentage of incoming calls connected to the call center that are either disconnected or hung up by the caller before reaching a CSR or being resolved by the IVR regardless of the length of time before being disconnected or hung up. Absolute Assignments See Assignments. Activity Based Management (ABM) ABM is a management approach that uses activity based costing (ABC), budgeting, and analysis in making strategic business decisions. It requires that business be defined down to the activity level and that activity transaction volumes and cost drivers be identified and tracked as key components of an Activity Based Management model. A Support or Indirect Expense that includes reconciliation, application of premium remittances, support functions, internal controls, both product and general ledger. Exclude corporate financial reporting. Actuarial Support The services of corporate actuaries in designing new products, setting premiums, recommending dividends and calculating reserves. Such services are excluded from Operations Staff and Expense. IT support for such activities to the extent that they are allocated to a line of business are reported as Other Business Support. Accounting A Support or Indirect Expense that includes reconciliation, application of premium remittances, support functions, internal controls, both product and general ledger. Exclude corporate financial reporting.

GLOSSARY TCi LIONS 2004 SURVEY GLOSSARY



Address Changes See Returned Mail. Adjusted Line of Business Expense The result of adjusting Total Line of Business Expense for Capitalization/Amortization, Adjustments to Expenses, Field Related and Extraordinary Expenses. Adjustments to Expenses Adjustments needed to lines 23 and 24 of the Annual Statement (Blue Book) Analysis of Operations to arrive at general operating expenses for the business represented in the survey. For example, subtract out expenses for a subsidiary whose products are not reflected in the survey but whose expenses are included in the Blue Book. Administrative Decline See New Business Application Count - Declines. After Call Work Time Also known as "wrap up time,” this time is usually tracked in a Call Center environment. It is the time either automatically allocated to the CSR or that the CSR chooses to take, to finish up the call they just handled. Typically, this time is used by the CSR to finish keying data on a system or anything that can be done to complete transaction processing where the caller is not needed. Age of Insured The average age of the insured for all life policies issued and paid for in the survey year. Include the age of the base insured only, i.e. ignore the age of any rider insureds such as spouse or children. For joint life, include the equivalent issue age. Exclude disability insurance, long-term care, industrial business, COLI, and reinsurance assumed. Agent Compensation System Expense A subset of Field Support expense incurred for the maintenance, enhancement and development of systems that provide agent compensation processing. Includes systems for the administration of bonuses, commissions or overrides. Allocation Methodology A code indicating the method(s) used to allocate Expenses and FTE staff counts to particular data cells in the survey. The first five codes have the following specific meanings: 1 = Based upon actual activity or transactions. 2 = Based upon work measurement (i.e. Time and Motion Study). 3 = Based upon LOB pro-rates. 4 = Based upon ABC model. 5 = Based upon best business judgment. The remaining three codes are undefined, allowing a participant space to indicate a methodology different than ones specified in 1 through 5.



Allocations Changes A request by the customer of a variable life policy or a variable annuity contract to change how future deposits and excess premiums are allocated among the available investment account choices. Alternate 3rd Party A company that distributes your company's products that is not owned within your parent company's corporate structure (e.g. Charles Schwab). Amortization The portion of expenses for a given accounting period deferred through Capitalization and included in operating expenses (line 23 of the Blue Book). Annual Premium See Total Annual Premium. Annualized Premium See First Year Annualized Premium. Application Data Entry Once an application has been completed, the data on the application must be entered into an electronic system for underwriting and issue. This application data entry may take place in the corporate operations unit, in a remote operations unit, in a sales office or at a kiosk. In some cases the applicant may enter the data in an interactive communication via the Internet. For the purposes of this survey, the staff employed and expenses incurred in application data entry is an Operations Expense. To the extent that application data entry is a function of the operations unit, the staff and expense will already be included in operations expense. However, if the data entry function starts, or is completed, in a sales office, at a kiosk or over the Internet, the staff and expense may not be routinely captured in operations expense. In such cases, they must be independently determined and added as Direct Operations Expense. Application Development Expense A subset of Information Technology (IT) Expense which is directly associated with the delivery of IT products and services to the customer. Application Development Expense includes In-house staff expenses such as salary and benefits, consultant costs such as contract programmers and analysts, outsourcing and other (e.g. training, data center and data communications) expenses related to the delivery of application systems. Application Development Expense is also reported separately by System Function (i.e. Maintenance, Enhancement, and Development) and by Information Technology (IT) Business Function. Apps Declined See New Business Application Count.



Apps Issued See New Business Application Count. Apps Suspended See New Business Application Count. Apps Withdrawn See New Business Application Count. Apps Written New Business applications submitted for review by the company. Do not count the submission of preliminary papers as a written application. For Life, Written is the sum of Withdrawn, Declined, Suspended and Issued. Include applications written for New Issues, Transfers of Assets-In and Internal Exchanges. For Annuities, suitability evaluation and the decision to accept/reject the application distinguishes Written from Issued. APS The abbreviation for Attending Physician Statement. See Underwriting Requirements. Assignments The legal transfer of property, rights or interest to another person. An assignment is Absolute if it cannot be revoked or Contingent if it is dependent upon the happening of an event (e.g. a grandchild's twenty-first birthday). Assumed Reinsurance See Reinsurance Ceded/Assumed. Audit Corporate level internal and external auditors are excluded from Operations Staff and Expense. Quality Control Audits are included in Operations as Quality Review functions. Automated Setup The Disbursement process of setting up a policy on the system for automatic payments. The periodic payments generated by the system in accordance with the plan are not counted as Cash Disbursement transactions but related expenses are included in Cash Disbursements Operations Expense. Automated Underwriting The use of expert systems or other automated tools to underwrite cases having certain characteristics and meeting pre-defined criteria.



Automatic Call Distributor (ACD) Primarily utilized in Call Centers, an ACD distributes incoming toll free calls to CSR's. The typical distribution is to route the call to the CSR who has been available the longest or, if all CSR's are on a call, the next CSR who becomes available to take a call. The ACD may also use Skill Based Routing and Load Balancing to assign incoming calls.

Automatic Reinsurance See Reinsurance Ceded/Assumed. Banks Producers at financial institutions providing alternative distribution channels for the sale of life and annuity products. This includes banks, savings and loans, credit unions, thrifts, etc. Bar-Coding Technology that facilitates the automatic interpretation and recording of information through the use of scanning equipment. An example is the use of a product code in supermarkets. A printed strip of vertical bars of varying widths, groups of which represent decimal digits and are used for identifying commercial products or parts. Bar codes are read by a bar code reader and the code interpreted either through software or a hardware decoder. Beneficiary Changes A sub-process of Policy/Contract Administration, Beneficiary Changes is a customer initiated change to the designation of persons or organizations (beneficiaries) to receive policy/contract proceeds upon the death of the insured. Billing Change Change in method of billing going from direct bill (billing coupon) to systematic (bank draft) to list bill (an employer withdraws dollars from employee paycheck and submits to company for premium payment) or no bill (customer does not want to be billed as in a variable policy where policy account value is sufficient to carry the cost of insurance for a period of time without payment). Blockage Rate This is the percentage of time where all available lines for a given toll free number are taken up with calls where the customer is speaking with a CSR, waiting to speak with a CSR, when customers are interacting with a IVR or when some lines are taken "out of service" because of line problems or on purpose because of staff shortages. When this happens, customers trying to call the toll free number will receive a busy signal and are thus "blocked" from getting into the Call Center. Blood/Urine Specimen/Saliva (BUSS) A battery of tests performed on samples of Blood, Urine and Saliva obtained from the applicant/insured. See Underwriting Requirements.



Bluetooth The technology that facilitates the interconnection of portable devices such as personal assistants, notebook computers and cell phones with home and business devices. This technology requires a special transceiver chip that allows for short-range wireless connection. Brokers Producers for life insurance and annuities who do not have an exclusive contract with a company or an obligation to represent a company exclusively. A brokerage contract provides no overriding commission on personally produced business and minimal or no production is required to retain the brokerage contract with the company. Brokers pay the bulk of their own expenses; companies engaged with brokers pay commissions and expense allowances.

Business Conduct Activities that monitor and report on corporate level efforts to maintain equitable stands of business conduct between company employees, especially sales representatives and customers. For example, assuring that all advertising material fairly presents the coverage and obligations assumed by the company. Related staff and expense are excluded from Operations Expense. Business Transactions The Life Line of Business transactions are defined as New Business and Customer Service. New Business Customer Service: Policy Changes Claims (Death Claims, Living Benefits and Disability Waiver) Policy Administration Policy Statements Cash Disbursements Call Center Operations Remittances (Premium Billing and Collection) BUSS See Blood/Urine Specimen/Saliva.



Call Center Operations A sub-process of "Business Transaction,” Call Center is defined as a function where incoming customer service calls are received from either external customers or Distribution Channels. The Call Center may be a totally separate organization within a company or it may be a part of an existing customer service organization such as Customer Services. Expenses should include IVR telecommunication charges and exclude Information Technology maintenance, enhancements, development and equipment leasing. Characteristics are as follows: 1. There are CSR's taking calls from customers although they may not be dedicated 100%. 2. Call Centers receive incoming customer service calls on single or multiple toll free numbers. 3. Incoming calls are distributed to CSR's via an ACD Automatic Call Director. 4. Call statistics, CSR performance and Call Center performance statistics are tracked by the phone system. Call Volume For reporting purposes, this is the number of incoming service calls, tracked by the phone system, that are answered by either CSR or IVR. Capitalization Certain expenses incurred in one accounting period (such as the development costs of major IT applications) and normally included on line 22 of the Blue Book, which a company is allowed to defer (spread over several accounting periods). The spreading of expenses over several accounting periods is called Amortization. Career Agency Career agencies are headed by an agency manager. Sales and service are provided by full time agents who devote the bulk of their time to selling one company's products, are provided training, financing and supervision by the company and need to meet minimum production requirements to maintain a full time contract. Career agents and agency managers are employees of the insurance company who are directly supervised by the company. Case Management A process for optimizing the work associated with business transactions often combined with imaging technology as part of business process reengineering. See Imaging (Workflow) Technology. Cash Disbursements See Disbursements. Cash Disbursement Requirement Identifies whether a signature, form, fax or phone call is required to initiate a cash disbursement transaction.



Cash Disbursement Staff Operations personnel performing cash disbursement transactions. Cash Disbursements with Manual Valuation Percent of cash disbursement transactions requiring manual processing. Cash Value Quotes As they relate to correspondence are included in Policy Administration Correspondence. Call Center Cash Value Quotes do not get counted as a transaction; however, they are counted as a call. Ceded Reinsurance See Reinsurance Ceded/Assumed. Claims A sub-process of Business Transactions, Claims includes the following: Death Claims Living Benefits Disability Waiver Count the number of policies as the transaction count for the contestable and non-contestable business. For the Annuities Line of Business Death Claims are counted as Cash Disbursements. Classification Indicates the percentage of policies that are issued with a standard (unrated) or substandard (rated) risk evaluation. Clean Application Those annuity applications with no outstanding requirements that would prevent the production of a valid contract for delivery. Client Data Base (CRM, CIF) The technology that facilitates Customer Level Processing. Client Information Data unique to the client such as height, weight, gender or age. It is distinguished from Other Information about groups to which the client may belong such as family history or occupational statistics. Client-Server A computer platform with multiple components that operate over a common network. The client is the requesting machine; the server is the supplying machine.



Collateral Assignments See Assignments. Commissions Support Area that supports the payment of commissions (i.e. agency related expenses, field compensation administration). Exclude commission payments. Completed The completion of transactions in the Call Center by the CSR includes Talk Time and After Call Work Time. It does not include any work time by the Support Staff. Compliance See Sales Practices/Compliance. Compliance Regulatory A Support or Indirect Expense that includes people in operations implementing policy and annuity regulations. Exclude state compliance and litigation. Computer Telephony Integration (CTI) A technology used in customer call centers for intelligent call routing and to provide a "screen pop" feature to the customer service representatives. An example of a CTI application may include customer calls that are routed through an IVR (Interactive Voice Response) application. Callers are asked to enter a policy or contract number. Based on the number entered, the customer database is searched for a record identifying the customer on the phone. The caller is presented choices as to the kind of representative they wish to speak with. At the time the call is received by a customer service representative, a screen of data about the caller and the contract is delivered to the call taker's desktop (screen pop). Also, there is a software telephone application on each representative's desktop that enables them to perform any phone function with their PC. Confirmation Notices Required to verify financial transactions on variable products, such as fund transfers and changes in net premium allocations. Confirmation Notices can also be sent for non-variable products that are not necessarily financial in nature, such as beneficiary and owner changes, address changes, loans, etc. Conservation The attempt to conserve business and retain funds in a company by offering alternative products, billing methods, features or other options at the time a policy is to be terminated. For transactions, count the number of policies. For expenses include billing or collection, automated cash value notices and policy level interactive expenses. Market conservation functions (company comparisons, running illustrations, and special promotions, such as anniversary dates), are excluded.



Conservation Only Product A life insurance or annuity product that was designed specifically for and is only offered to customers through a conservation process. Conservation Specialist Conservation Specialist is a home office employee who works in a separate conservation unit. Consolidated Statements Documents communicating information to clients that combine information for more than one product relationship between the specified client and the company. The combined information may include data on two or more products for the same Line of Business (e.g. a fixed annuity and a variable annuity) or for different Line of Business (e.g. variable annuity and permanent life insurance). Consultants A subset of Application Development Expense, Consultants includes Fixed Fee and Management Consultants, Technical Contractors (Programmers and Analysts) and Other Part Time Help. For Contract Programmers, Analysts and Other Part Time help (include expense and FTE Count). For Fixed Fee and Management Consultants (include expense but not FTE count). See In-house Staff Count for FTE count calculation. Content-Based Retrieval The technology that facilitates without human intervention the accessing of a broad range of media such as audio, images, text and video. Contestable Claims Claims that are questionable as to how they are covered by the terms of the policy or contract. Corporate Complaint Handling and Resolution Activities related to the receipt of, control over and response to complaints from customers and the general public, whether received directly by the company or referred by a state insurance department. Related staff and expenses are excluded from Operations Expense. Corporate Human Resources Human Resource activities related to setting enterprise level standards/policies and reporting on a corporate basis. Related staff and expense are excluded from Operations Expense. Corporate Insurance General property and liability insurance, including self-insurance, for company owned property and officer/director protection. Related staff and expense are excluded from Operations Expense.



Corporate Other Services This is a catchall for activities that are not otherwise listed. Related staff and expense are excluded from Operations Expense. Corporate Overhead A portion of expenses otherwise excluded from operations and IT expense, which is allocated to the line of business on a prorated basis. Corporate Overhead up to and including the Vice-President of Operations is included as an operations expense. Corporate Overhead above the level of Vice-President of Operations is excluded from operations expense. Corporate Pension Plan The staff and expense involved in maintaining the Corporate Pension Plan, including any relations with third party administrators, are excluded from Operations Expense. Cost of Underwriting Requirement The portion of the total New Business expense associated with the underwriting requirements procedure. See Underwriting Requirements. Credit Card A card imprinted with the owner's name, account number and account expiration date, and encode with digital data that can be read by sliding the card through an electronic reader. The card represents a line of credit the owner has arranged with the Company that issued it. In effect each purchase is a pre-authorized loan from the issuing company to the card owner which must be repaid at a later date, usually with interest on the outstanding balance.

Credit Card Remittance Number of payments and expense associated with credit card remittances. Include expenses associated with initial setup, ongoing maintenance and exception processing. Count as Payments the number of contract records updated. Credit Reports Used in the underwriting process to evaluate the suitability of coverage and the customer's ability to meet financial obligations. See Underwriting Requirements. Credit Union Staff and Expense incurred in running a company owned and operated Credit Union. Related staff and expense are excluded from Operations Expense.



Customer An authorized policy owner (customer) who can access and add, delete or change certain data in the policy master file from a kiosk or over the web-based internet. For example, the owner of an inforce policy who accesses the insurance company web site via an internet enabled Personal Computer and changes the Fund Allocation. Customer and Product/Tax Reporting A Support or Indirect Expense that includes 1098, 1099, 5498, fair market value, net cost questions, cost bases, and people that deal with tax or product issues/questions at the contact level, tax reporting issues to client. Exclude corporate tax processing and premium tax. Customer Level Processing The ability to provide and accept information to/from the customer on a consolidated basis. For example, providing one premium statement for due premiums on all of the customers policies; or accepting one check and automatically applying the proceeds to the due premium on each of the customer policies. Customer Service A sub-category of Business Functions, Customer Service is the Operations or Information Technology function, associated with the care and maintenance of existing life policies and annuity contracts. Customer Services include: Claims Policy/Contract Administration Policy Changes

Policy/Contract Statements Call Centers

Cash Disbursements Conservation Remittance Customer Service Representative (CSR) This is one of the titles used to describe employees who are responsible for handling incoming external customer and field representatives service calls received in a Call Center. Customer Service Support Staff Operations personnel supporting CSR's. Customer (Web-based) Transactions Transactions that are completed by the customer over the Internet without speaking to or involvement of a person in the company.



Data Center Expense A subset of Infrastructure Expense, Data Center Expense includes all IT Expenses for the operation of a Data Center attributable to the Life or Annuity Line of Business. Included are all expenses required to keep the mainframe (e.g. CPU costs, hardware, software, people, rent etc.) up and running. Data Communications Expense All relevant IT expenses associated with the telecommunications environment for the entire LOB. Data Mining The activity of collecting, validating and analyzing data from disparate systems to achieve insights using a set of software tools employing statistical analysis, pattern matching, presentation and other advanced techniques. Data Warehouse A repository of information within a company that draws much of its data from transaction processing systems but provides a number of additional capabilities. Typically, a data warehouse is comprised of a collection of data bases which contain well organized and reconciled sets of data with common definitions that are accessible to a wide number of individuals within the organization. Also included are user-friendly tools to access, analyze and present the data, regular processes to update the information from transaction systems, appropriate data security and elimination of data duplication. Death Benefit Quotes See Inquiries. Death Claims Payments to beneficiaries designated by the customers upon death of the insureds. For life, the business sub-process involving review and payment or rejection of claims for such payments. For annuities Death Claims are included as Contract Administration transactions. The customers upon death of the insureds. Debit Card A card imprinted with the owner's name, account number and account expiration date, and encode with digital data that can be read by sliding the card through an electronic reader. Each purchase is electronically deducted from the card owner's account at a financial institution. Declined See Apps Declined.



Desktop Expenses See Data Communication/Desktop Expense. Development A sub-category of Application Development System Function, Development encompasses all activities related to the first time installation of a new system or technology. Examples include the following: Replacement of existing system Installation of Vendor software for the first time Introduction of a new service such as a Help Desk or call center Introduction of a new technology Direct Expense Expenses for activities that are germane to (i.e. an integral part of) a function and are exclusively within the domain of that function, e.g., underwriting salaries and underwriting requirement expenses. Direct Response Business produced without face to face contact between the buyer and the agent or other company representative. This includes buyer-initiated purchases made in response to direct home office offerings through mail, media advertising or telemarketing. Disability Waiver The claims transaction that causes the waiver of due premiums when an insured becomes disabled. During the period of disability, the insurance policy remains inforce. (See Claims). Disbursements For Annuity: Customer Service transactions involving cash leaving the company:

Partial Withdrawals Full Withdrawals Systematic Withdrawals Minimum Distributions Transfers of Assets - Out Death Claims Loans Free Looks

Other For Life: Customer Service transactions involving cash leaving the company:

Dividend Withdrawals Surrenders (Full and Partial) Loans Matured Endowments

Other



Display Technologies Include digital-ink and light-emitting polymers. An example of their use is in hands-free mobile applications. Distributed Processing The concept of decentralizing information processing (distributed data processing) and databases (distributed database) through the installation of computers at multiple locations. A distributed database may be further partitioned or replicated between multiple computers or locations. A local area network keeps track of where the data is so that the distributed nature of the system is not apparent to users. The local area network is designed so that a single program can run simultaneously at various locations. Distributed processing is distinguished from local processing that local processing needs are handled by a single data processing location/database. Distribution Channel Channel through which life insurance and annuities are sold. See entries for Banks, Brokers, Career Agency, General Agency, Independent Agents, Direct Response, Internet/Kiosk, Alternate 3rd Party, Wholesale, Retail and Customer. Dividend Option Changes A sub-process of Policy Administration, Dividend Option Changes is customer initiated changes in the way policy dividends are disbursed/applied. See Dividends. Dividend Quotes See Inquiries. Dividend Withdrawals See Dividends. Dividends Amounts of money returned to owners of participating life insurance policies when actual mortality, interest and expenses were more favorable than anticipated in setting the premiums for the policies. The owners are usually given the options of taking the dividends as cash payments, using them to reduce premiums due on the underlying policies, using them to purchase paid-up additional insurance (PUA) or leaving them with the insurance company to accumulate with interest (DWI). At some later date, the owners may decide to withdraw all or part of the DWI or to surrender the PUA for the accumulated cash value. These withdrawals of DWI and surrenders of PUA are counted as Dividend Withdrawal transactions and the related expenses are included in Disbursement Operations Expense. Duplicate Policies/Contracts (Certificate of Full Policy) A sub-process of Policy/Contract Administration, Duplicate Policies/Contracts is a customer initiated request for the issuance of inforce policy/contract documentation, usually because the originals were lost or destroyed.



E-Cash E-Cash is a system of digital money that is purchased from a bank and used with merchants who accept them. To purchase this digital money it requires the user to down load the "digital coins" from a participating bank and a payment is made by uploading the "digital coins" to a participating vendor. Each transaction is encrypted for utmost security measures. e-Service Use of the Internet to conduct business electronically with little or no human involvement. Services include presale support, applying for life insurance and annuities, customer services and e-mail. Presale support includes such services as gathering Customer Specific Data, providing Needs Analysis/Solutions, generating leads and facilitating agent licensing/application. Applying for insurance/annuities and customer services may be either financial or non-financial. For example, changing the Fund Allocation on an existing annuity contract is financial. Education Expense See Training Expense. EKG The abbreviation for Electrocardiograph, a medical diagnostic tool used in the underwriting process to evaluate the applicant's suitability for coverage. See Underwriting Requirements. Electronic Fund Transfer (EFT) Remittance Include expenses associated with initial setup, ongoing maintenance and exception processing of EFT remittances. Count as Payments the number of contract records updated. Electronic Fund Transfer Stops Similar to stop payments on checks, Electronic Fund Transfer (EFT) Stops are notices that reverse automatic EFT payments if they have not been fully processed. Electronic Signature A digital code that can be attached to an electronically transmitted message that uniquely identifies the sender. Like a written signature, the purpose of an Electronic (Digital) Signature is to guarantee the identity of the individual sending the message. (See Digital Certificates.) Enhancement A sub-category of System Function, Enhancement encompasses all activities related to the augmentation of existing business systems functionality. Examples include the following: Navigation improvements - Graphical User Interface (GUI) Performance tuning Revisions to existing systems Discretionary upgrades (with new functionality) Product enhancements



Exception Processing Percent of Remittance Payments not processed automatically/electronically (i.e. on the first attempt), including EFT rejects, Lock Box referrals and Credit Card problems, should be included in the appropriate column according to how they were initially processed and should not be counted as payments, Internal or otherwise, when they are resolved. Such payments require manual processing and/or setup for electronic reprocessing. Executive Overhead A Support or Indirect Expense that should be included in this survey up through vice president of operations and their support staff. Expedited Claim Process An abridged claims payment process that waives some of the normal documentation and claims evaluation in the interest of expediting payment to the beneficiaries/claimants and reducing costs. The Expedited Claim Process is used for straight forward, small proceed claims where the cost of normal processing would more than offset any potential savings to the company. Expense The cost incurred when a product or service is delivered to the customer. Expense Allocation Methodology See Allocation Methodology. Expense Drivers Factors that may have an impact on an organization's operating expenses including business practices, technology and geographic location. Expert System An interactive computer program that helps users with problems that would otherwise require the assistance of human experts; a program that represents the computer as an expert on a certain topic. Expert systems capture knowledge in rules that can be communicated to others as solutions or advice. The programs often simulate the reasoning process used by human experts in certain well-defined fields such as insurance underwriting. Extraordinary Expenses Extraordinary Expenses are one-time, non-recurring expenses incurred in a reporting cycle for activities such as those related to consolidating a center; severance, counseling, stay pay, lease write-offs, capital equipment write-offs, employee relocations to existing sites, incremental training of new employees in new site, general moving expenses. These expenses may be charged directly to the operations or as a corporate allocation. These one-time, non-recurring expenses are highlighted as a deduction in the calculation of Adjusted Line of Business Expense and excluded from all other aspects of the survey.



Face Amount of Paid Insurance Base life insurance face amount for policies issued and paid for in the survey year. Exclude riders, dividend additions, other special provisions, industrial business, COLI and reinsurance assumed. Include increases in base face amount that involve the same selling effort as other new business. Include the initial face amount for policies that have guaranteed future changes in death benefit, such as decreasing term, jumping juvenile, and endowment life insurance. Facilities A Support or Indirect Expense that does not include corporate or vacant space. Facultative Reinsurance See Reinsurance Ceded/Assumed. Fee For Service Indicates whether a fee is charged to initiate the transaction. Field Compensation Commissions, overrides and salaries paid to personnel assigned to a company's sales offices and engaged in the function of selling and servicing the company's products. Field Infrastructure Cost Annual cost (whether leased or amortized) of the infrastructure provided for the field. Includes hardware, software, LANs, routers etc. Field Related Expenses Distribution system expenses that must be deducted in order to fairly compare total line of business expenses across companies with different distribution systems. Generally this will include sales office expense, field compensation, and field expense allowances that have not already been subtracted as Adjustments to Expenses. For General Agency companies, these expenses are usually in the Annual Statement's line 7.1 (called "Agency Expense Allowance") of Exhibit 5, and include such expenses as general agent overrides, new general agent and new agent subsidy programs, and various production bonuses.



Field Support A sub-category of Information Technology (IT) Business Function. Field Support includes: Agent Compensation Administration Agent Desktop Support Captive Underwriting Data Contact Management Home Office Marketing Illustrations Licensing Administration Marketing Systems Needs Analysis PC/LAN Infrastructure Policy Service by Agents Recruiting System Technology Help Desk Finance A Support or Indirect Expense that includes local financial management (i.e. resources that support operations budgeting, planning, and reporting). Financial Transactions that impact the accumulation or distribution of contract values. An example of a Financial Contract Administration Financial transaction is a change in Fund Allocations. Financial Management A sub-category of Information Technology (IT) Business Function. Financial Management includes: Actuarial/Pricing Bill Payment and Accounting Conversion to GAAP (if small amount, otherwise should be listed as an extraordinary expense). Financial Reporting Financial Support Systems Planning and Budgeting Vouchers for associate expenses (accounts payable) First Call Resolution The percentage of calls resolved to the caller’s expectations. No follow-up with the caller is required on the first and only call. See Referrals/Handoffs.



First Notice of Death The first notice of death is an important part of the Death Claim process. A Company first hears about the death of a person insured by one of its life insurance policies or annuity contracts when a beneficiary calls to claim the proceeds. The call usually comes to the Call Center on one of the toll free numbers. Most Call Centers are not equipped to process such claims, so the Customer Service Representative gathers as much information as possible during the call and refers the case to the Claims Department for processing. The Claims Department contacts the caller to complete the Death Claim. First Year Annualized Premium For life policies issued and paid for in the survey year, include the total first-year premiums that policyholders would expect to pay if all policies remained in force for one year. Premium includes base premiums, cash extras, waiver of premium, riders and other special provisions. Include non-automatic premium increases that involve the same selling effort as other new business. For universal life policies, include the planned periodic or billed premium but exclude excess premiums paid above that amount. For all policies, include single premiums at 10 percent of the collected amount and include only where a single, lump-sum premium payment covers the entire cost of the policy. For all policies, exclude internal 1035 exchange dump-ins. External 1035 exchange dump-ins should be included only if they are used as a single premium as described previously, and then they should be counted at 10 percent of the dump-in amount. Free Look Period An amount of time (usually between 10-30 days) during which an insured may examine a newly issued insurance policy and if not satisfied, return it to the company for a full refund. Full Medical Exam A report on the review by a qualified physician of the applicant/insured's medical history, test results and physical condition. See Underwriting Requirements. Full Surrender The voluntary termination of a policy by its owner before it becomes payable by death or maturity. For example, the cash surrender of a Permanent policy. Full Time Equivalent (FTE) Only filled positions are counted (i.e. exclude budgeted positions not filled). Count full-time employees as 1.0 and part-time employees as 0.5. Do not count Temps in FTE Count, but include their cost in Expenses. Fund Allocation Change A request by the customer of a variable life policy or variable annuity to change how future remittances are allocated among the available investment account choices.



Fund Transfer A request by the customer of a variable life policy or variable annuity contract to transfer all or part of his/her existing account balance from one investment account choice to a different investment account choice (e.g. transfer funds from the fixed interest account to one or more of the separate accounts). General Agency General agencies are headed by an individual referred to as a general agent (GA). The GA is appointed by the insurance company and has the status of an independent contractor. Usually expenses allowances are paid to GA's by insurance companies to cover GA expenses such as rent, clerical assistance, travel, postage, etc. The GA is responsible for the financial management of the agency. Agents in the agency are typically employees of the GA not the insurance company.

General Correspondence See Inquiries. General Product/Policy Inquiries See Inquiries. Handle Time This is the total time tracked, typically in a Call Center environment, that it takes a CSR to completely handle a call. This total time would consist of the time the CSR spent actually talking to the customer (Talk Time) which includes Hold Time, and the time they spent wrapping up the call (After Call Work Time). Handoffs See Referrals/Handoffs. Hardware Expense A type of expense related to computer equipment including PCs, Printers, Modems, Routers and Servers, as well as any maintenance or depreciation associated with them. Desktop equipment, like PCs, Printers and Modems, is usually charged directly to Operations. Infrastructure equipment, like Routers and Servers, is initially charged to IT and subsequently allocated to Operations based on services provided. Hold Time The length of time a caller is placed on hold during the phone conversation with a CSR. In some Call Centers, this time is included as a part of Talk Time. If this time is tracked separately, it must be combined with Talk Time for reporting in this survey. Householding Combining all communications going to a specified postal address regardless of the client names on the respective policy or contract.



Human Resources A Support or Indirect Expense that includes time to do the recruiting, training, benefits, payroll administration (to the extent that it supports operations). Exclude corporate administration. Illustrations Graphic, numeric and verbal presentations to customers displaying the accumulation of annuity/policy values and payout information relative to the cost of the life insurance policies and annuity contracts. Illustrations are tailored to specific applicants and are used by insurance companies and their Distribution Channels in presenting information to potential customers. Imaging (Workflow) Technology A collection of technologies that permit the capture of text and graphic information as images, the storage of it in a data base and the presentation of it to business users in combination with other information at particular stages in a business process to improve the timeliness, efficiency and quality of the work effort case management. Workflow is a separate process of optimizing the work associated with business transactions. It is often combined with imaging technology as part of business process reengineering. Incomplete Applications Examples of Incomplete Applications are: incomplete medical or family history, wrong version of the application was submitted, producer is not licensed in the state of signing, and risk resident state, if different, state replacement disclosure form is missing, no beneficiaries are listed, or the relationship to the insured is not stated, replacement questions are not answered, etc. Independent Agents Full time insurance agents not affiliated with a single company whose primary source of income is from commissions and expense allowance dollars paid for the sale of insurance products. Indirect Expense The operations expense for activities that are ancillary in nature and attributable to more than one function or activity. The activities may be in either centralized or decentralized sites. Examples of activities to be included are accounting, commissions support, regulatory compliance, customer and product tax reporting, executive overhead, facilities (not including corporate or vacant space), local financial management, human resources, mail distribution, microfilm imaging and retrieval, output production, quality control, postage associated with remittances and contract statements, records management, and help desk. Indirect expenses to be excluded are actuarial support, agent compensation, auditing, business conduct/sales practices, sales regulatory compliance, consumer relations, corporate complaint handling and resolution, corporate human resources, corporate insurance, corporate overhead, corporate pension plan services, credit union, legal/law expenses, licensing, marketing (including printing of prospectus material), model office, post retirement expenses, product development and purchasing.



Individual Life Products Include products that are underwritten and serviced as individual life insurance. If there are products that are individual according to this definition but are reported in the Group Life column of the Blue Book, include them in the survey and adjust the reported expenses accordingly. Individual Life Products are classified as: Permanent Term Universal Second-to-Die Variable Universal Interest Sensitive Variable Life Industrial Life Exclude AD & D disability insurance, long term care health and annuities as Individual Life Products. Industrial Life An Individual Life Product, Industrial Life is life insurance on which a premium is collected on a weekly, bi-weekly, or monthly basis, usually at the home of a customer. The face value of the policy is usually $1,000 or less. (Note: Do not include this type of product in any response in the questionnaire). Inforce Face Amount See Total Inforce Face Amount. Inforce Policy Count The number of active premium-paying and paid-up individual policies at year end excluding disability insurance, long-term care, industrial business, COLI, and reinsurance assumed. Do not count riders separately. Count joint life policies as one policy. Information Technology (IT) Business Function IT costs should be allocated to the following major business functions. Include contract programmers and analysts in both costs and counts. Management consultants working on a fixed price basis should be included only in costs. New Business Customer Service Distribution (incl. Field Support & Sales Practices/Compliance) Other Business Support (Incl. Financial Management) Information Technology (IT) Expense Total direct and indirect charges for information technology split by Life and Annuity lines of business. IT Expenses are further separated into Application Development Expense and Infrastructure Expense.



Exclude the following expenses from Information Technology Expenses: Corporate Human Resources Corporate Insurance Corporate Pension Plan Corporate Services Credit Union Facilities Services related to Corporate and vacant space Legal/Law Expenses Operations Expenses for systems activities included in the business organizations (Shadow IT), e.g. Operations Help Desk. Post Retirement Expenses Infrastructure Data centers, networks, email, Internet, servers, and application development, maintenance and enhancements related to those areas. Infrastructure Expense A subset of Information Technology (IT) Expense, Infrastructure Expense includes IT expenses that are not directly associated with the delivery of IT products and services to the customer. Included are expenses for data center, data communications and desktop services including hardware and software expenses. Also included is the cost of System Programmers to maintain the infrastructure applications and Other Infrastructure Expenses such as staff training.

In-house Staff Count The average number of operations staff employed during the survey year. An acceptable approximation for the average is: (year-end count + beginning year count)/2. Include only filled positions in the count, i.e. exclude budgeted positions not filled. Count full-time employees as 1.0 and part-time employees as 0.5. In-house Staff Expense A subset of Application Development Expense, In-house Staff Expense includes salary and overtime, benefits (including Life, Health and Disability insurance and Pension Plans) and payroll taxes for employees.



Inquiries Centralized correspondence for general inquiries, tax inquiries, quotes and complaints. Doesn't include correspondence resulting from another transaction. For example: Three letters written to complete a transaction should be counted as one transaction, not three. Four quotes going out as one piece of correspondence are only counted as one transaction. Included in Inquires are: Death Benefit Quotes Dividend Quotes Loan Quotes E-Service Inquiries General Product/Policy Inquiries General Correspondence Intelligent Call Routing (ICR) This is the technology typically found in a Call Center environment. The routing of an incoming call to the Interactive Voice Response (IVR) system or to a Customer Service Representative (CSR) is based upon CSR skills and availability, IVR prompt responses and standard routing rules. Interactive Application An electronic application that prompts information completion by the use of dialogue boxes, drop down lists and other interactive aides. Interactive Voice Response (IVR) Interactive Voice Response (IVR) is used to electronically (i.e. without human intervention) provide services or process transactions based on information spoken (Voice Recognition) by the customer or entered on the telephone key pad. It also has the capability of transferring a customer to a CSR automatically or when selected by the customer. This technology is usually integrated into the phone system and used to be superior to a Voice Response Unit (VRU) before VRU technology changed. Now, both IVR and VRU are used interchangeably to reference the same technology. Interest Sensitive An Individual Life Product, Interest Sensitive is permanent insurance that credits cash values with current interest rates. Interfund Transfer See Fund Transfer. Internal Remittance Payment Method The processing of manual payments (e.g. cash, check) in-house including scanning of turnaround documents.



Internet The Internet is a collection of networks that allows for data communication, access to dispersed information and electronic commerce. The growth in popularity of the Internet can be attributed to the World Wide Web (the Web). The Web is a graphical way of publishing information on the Internet. Each site, or location, on the Web is composed of a network of graphical pages which often contain links to other sites. Internet Processing Use of the Internet in the processing of electronic commerce. Internet Web Page See Web Page. Intranet Networks internal to the company using the connectivity capabilities of the Internet rather than proprietary or dial-up access. Among these uses are: electronic mail, telephone and e-mail directories, on-line capture of customer application data, central document libraries, company newsletters and other internal communications, meeting schedulers and the usual product descriptions and company information. Other uses can include software distribution and links to suppliers of products and information. Issued When a company accepts the risk and an offer is made to the applicant in the form of a policy or contract. (Excludes reissues.) For Life, Issued equals Written minus Withdrawn minus Declined minus Suspended. For Annuity, Issued equals New Issue plus Transfers of Assets-In plus Internal Exchanges. IT Allocated Expense The portion of Information Technology (IT) Expense which has been allocated to each of the Lines of Business. Also refers to the allocation of IT Expenses to IT business and system functions. Kiosk A self-service, Internet-linked, station located in a public area such as a shopping mall or a supermarket. Consumers can access information, make requests, or increasingly transact business. Lap App Electronic Applications Applications which allow the sales representative to enter application data remotely. Laptops Issued in the Field A class of easily transported Personal Computers made available to Sales personnel for use in accessing customer information, developing sales presentations (I.e. illustrations) and capturing applicant data.



Legal/Law Expenses Staff and Expense incurred for legal advise, representation and settlements, whether in-house or on retainer. Such staff and expense are excluded from Operations Expense. Licensing Staff and Expense incurred for the acquisition and maintenance of corporate licenses to sell insurance in states where the company conducts business. Such staff and expense are excluded from Operations Expense. Line of Business (LOB) Expense See Total Line of Business Expense. Living Benefits Early payout of anticipated death benefits from a rider attached to an existing policy or from a separate policy. The purpose is to allow the terminally ill insured an additional source of funds to pay medical bills and/or purchase other items. Load Balance Load Balancing is used to make the most effective use of CSR's and provide the best level of service possible when more than one Call Center handles the same type of calls on the same toll free number. This can be achieved in a number of different ways, depending upon the technology available. In some Call Centers, access to the AT&T network is available where someone in the Call Center can go into a network and make changes to the way calls are routed or the number of calls routed. For example, if you have one toll free number going into two locations who typically each handle 50% of the calls and one day you find that half of the CSR's in one location are ill, you can change the routing of 50/50 to 25/75. Another way to load balance is through look ahead interflow where the phone system sends the call to the location who is best able to Handle it the fastest based on wait time and other parameters. Loan Quotes See Inquiries. Loans Amounts borrowed by customers from insurance companies at rates of interest specified in most life policies and some annuity contracts, using the cash or accumulation value of the policies or contracts as collateral. If the insured dies or surrenders the policy/contract with a loan balance still to be repaid, the insurance company deducts the balance, plus accrued interest, from the proceeds of the death claim or cash surrender.



Lock Box Remittance A deposit collection service offered generally by banks where a company's customers mail payments to a central location such as a P.O. Box. The bank coordinates the opening, processing, and depositing of the remittances on behalf of the company. Remittances that cannot be automatically handled by the bank are referred for Exception Processing by the company. Typically, the bank charges the company a per item fee. Lock Box expense also includes costs associated with the setup, ongoing maintenance and Exception Processing. Each remittance should be counted as either automatic or exception, but not both. Mail Room Centralized mail facilities for the handling of incoming, outgoing and internal mail pickup and delivery. Maintenance A sub-category of System Function, Maintenance encompasses all activities related to staying in business, i.e. the day-to-day support and operation of existing business system functionality (non-discretionary). Examples include the following: Replace obsolete technologies (non-discretionary) Regulatory changes Routine maintenance Dividend Scale Changes Management Information/Reporting Manual Payment The remittance payment by cash, check or other instrument. See Internal Remittance Payment Method. Marketing The functions associated with the process of selling the company's products. Matured Endowments A type of permanent life insurance that provides a death benefit payable to specified beneficiaries if the insured person dies during the specified term of the policy or a lump sum payment to the owner of the policy if the insured person is living at the end of the specified term of the policy. For example, assume that a $10,000 twenty-year matured endowment is taken on the life of John Jones, who is the owner of the policy while his wife Mary Jones is the beneficiary. If John dies during the twenty-year period, the insurance company pays $10,000 to Mary. If John is alive at the end of the twenty-year period, the insurance company pays $10,000 to John. Of course the insurance company sets a premium rate sufficient to cover both contingencies. Matured Endowments are often handled differently for smaller cash payments than for larger cash payments. Companies usually have threshold amount for determining which procedure to follow.



Medical Declines See Declines. Medical Staff Physicians (MD's, DO's), Nurses and other medical technicians. Micrographics Centralized printing and duplicating facilities that handle bulk processing. Miscellaneous Expenses Includes such Operations expenses as: Books & Periodicals Business Entertainment Complaint Handling and Resolution within the unit Conferences Dues Individual Employee Activities Employee Recognition Express Mail Form & Print Material Furniture and Equipment: Purchases, Rental and Maintenance Occupancy (Rent) Office Supplies Postage Services & Administrative Fees Settlements from administrative losses. Sundries/Miscellaneous Expenses Travel Model Office A standard for office arrangements that is established and maintained at the corporate level. Related staff and expense are excluded from Operations Expense. MVR The abbreviation for Motor Vehicle Report. See Underwriting Requirements. Name Changes A sub-process of Policy/Contract Administration, Name Changes is a customer initiated change to the insured's name as it appears on the Policy/Contract and in the company records. For example, a woman could change her name when she gets married or divorced. Natural Language Processing (NLP) Natural Language Processing or NLP will allow a computer system to understand human language through natural language command and control. It will allow the user to have a conversation with a computer system as if the computer system is another human being.



New Business Application Count For Life, the number of New Business applications/policies will be reported in the following categories: Written: The application and all preliminary papers are submitted for review. (For Life: Written equals Withdrawn plus Declined plus Suspended plus Issued.) Withdrawn: Client/Agent cancels application. Declined: Company declines risk for medical or administrative reasons. Suspended: Count of apps pending (e.g., awaiting requirements) on 12/31 of the data year less count of apps pending on 1/1 of the data year. Issued: Company accepts the risk and an offer is made to the applicant, (excludes reissues). (For Life: Issued equals Written minus Withdrawn minus Declined minus suspended.) (For Annuity: Issued equals New Issue plus Transfers of Assets-In Plus Internal Exchanges.) Paid: Applicant accepts the offer, remits the initial premium/deposit and the policy/contract is placed inforce. Reissued: An issued Policy/Contract is reworked without an underwriter. New Business Expense The Operations and IT expenses associated with the New Business process, including expenses for Underwriting Requirements. IT New Business Expense includes: Electronic Application Development Policy Issue Suitability Teleunderwriting Underwriting New Hires Employees who were hired during the survey year. Non-Contestable Claims Claims that are not questionable as to how they are covered by the terms of the policy or contract. Non Financial Examples of Non-Financial Contract Administration Transactions include Name Changes, Address Changes, Beneficiary Changes and Inquiries. Non-Rated See Rated.



Not Processed Call Center transactions for which information is gathered by the CSR but the transaction is handed off to be completed by someone else. Number of Calls Per Day See Call Volume. Occupancy Rate A measurement of the availability of a CSR for a given time period. Once & Done This is terminology commonly used in a Call Center environment. There are many different definitions of once and done, but the one utilized for this survey is as follows: The percentage of transactions or inquires that can be handled, in their entirety, by a CSR. This includes Talk Time and After Call Work Time, but does not include any transactions or inquiries that must be referred to another area for additional processing regardless of whether the customer will actually be contacted by that area. An example of this might be an address change that cannot be done over the phone for some reason but must be referred to another area for processing. The CSR advises the caller the address will be changed and refers it to the appropriate area and no additional communication is needed with the customer. However, the address change was not completed by the CSR and the CSR cannot be absolutely sure that the change will take place. Therefore, it is not once and done. This also would not include any forms that must be sent to a customer to finalize their transaction. An example of this might be a beneficiary change where the caller must complete a form and return it before the transaction is processed. Operations Operations consists of the following business processes and the Department or Service Center where they are completed: New Business Customer Service Policy Changes Claims Policy Administration Policy Statements Cash Disbursements Conservation Call Center Operations Remittances Note: Transactions that are not completed by the Customer or by the Distribution Channel are assumed to be completed in Operations.



Operations Expense Total Direct Expense and Indirect Expense for operations. Operation Expense should be reported by Business Transaction. Operations Expense includes: In-house Staff Outside Help Hardware Software Telecommunications Voice Training/Education Expense Miscellaneous Support or Indirect Expense Exclude the following expenses: Actuarial Support Agent Compensation Audit - Exclude both internal and external corporate auditor expenses. Business Conduct/Sales Practices Compliance (Sales Regulatory) Consumer Relations Corporate Complaint Handling and Resolution Corporate Human Resources Corporate Insurance Corporate Overhead Corporate Pension Plan Services Corporate Other Services Credit Union IT Systems and Data Communications and Data Center Expenses IT Support (dedicated staff e.g., testers, coordinators and writers included in IT Expense). Legal/Law Expenses Licensing Marketing including printing of prospectus material Model Office Post Retirement Expenses Product Development Purchasing



Operations Staff The job categories of operations personnel are as follows: New Business: Underwriting/Suitability Staff Medical Staff Other Direct Support Staff Application Data Entry Staff Customer Service: Policy Change Staff Claims Staff Policy/Contract Administration Staff Cash Disbursements Staff Call Center Staff Conservation Staff Remittance Staff Other Application Development IT Expense Miscellaneous IT expenses related to Business Applications. Includes Data Center, Data Communication and Desktop expenses applicable to those Business Applications. Also includes Data Center Expenses - CPU and other mainframe charges applicable to application delivery, Data Communication Expenses - Telecommunication charges applicable to application delivery and Desktop Expenses - PC/LAN and other support expense applicable to application delivery, e.g., help desk. See Other Expense. Other Direct Support Typically staff in the New Business, or policy underwriting and issue, department who are not underwriters or medical staff. Functions performed include data entry, mail processing, case preparation, quality review, MIB coding, policy preparation, and/or filing. Other Distribution Channels Other methods for selling life insurance and annuities etc. Other Infrastructure Expense A subset of Infrastructure Expense, Other Infrastructure Expenses are miscellaneous IT expenses (e.g. staff training) not related to business applications maintenance, enhancement or development.



Other IT Support A sub-category of Information Technology (IT) Business Function. Other IT Support includes: Administrative Support Human Resources Other Life Some examples are multiple life and first-to-die. Exclude Disability Insurance, Industrial Business, Long-term Care, Reinsurance Assumed, BOLI (Banked Owned Life Insurance) and COLI (Company Owned Life Insurance) if not an integral part of your Individual Operations process. Other Policy Changes Changes to the terms of a policy or the underlying facts reported by the applicant, such as an Age Correction, that require the involvement of an underwriter to reevaluate the risk and to adjust the premium. Additional Underwriting Requirements may be requested as part of the reevaluation process. The most common Policy Changes are Term Conversions and Reinstatements. This line item may also be used for consolidated Policy Changes if the participant is unable to breakout Term Conversions and Reinstatements from Other Policy Changes. Outbound Call Retention Unit A function of Conservation that contacts customers and/or beneficiaries by phone when a cash disbursement or policy cancellation has been requested. The purpose of the contact is to suggest alternatives and to encourage the customer/beneficiary to leave the funds with the company. Output Production A Support or Indirect Expense that includes annual mailings, client reports, outsource vendors. Outside Help See Consultants. Outsource, Outsourced, Outsourcing Outsourced is defined as the complete control of the deliverable of an Operation or IT function, system or service by an outside contractor or Third Party Administrator (TPA). Examples include Field support for PC maintenance and installations; hardware acquisitions and maintenance for the field and non-field. Outsourcing Expense A subset of Application Development Expense, Outsourcing Expense is defined as the complete control of the deliverable for an IT function, system or service by an outside contractor. Examples include Field support for PC maintenance and installations; Hardware acquisitions and maintenance for the field and non-field.



Ownership Changes A sub-process of Policy/Contract Administration, Ownership Changes are customer initiated changes in the person or organization that has legal title to a policy or contract (ownership). Paid Applicant accepts the offer, pays the initial premium and the policy is placed inforce. See New Business Application Count. Paid-up Additional Insurance (PUA) See Dividends. Paramed An abbreviated medical exam by a medical technician (Paramedic) in place of a Full Medical Exam by a qualified physician. See Underwriting Requirements. Partial Surrender The withdrawal of accumulation funds paid to the company in excess of premiums required to keep the policy inforce. For example, the disbursement of cash from the accumulation part of a Universal policy. Pattern Recognition An important field of computer science concerned with recognizing patterns particularly visual and sound patterns. This technology is central to optical character recognition (OCR), voice recognition, and handwriting recognition. Payment Frequency Changes For life policies, premiums are paid at regular intervals. For some annuities, deposits are also required at regular intervals. Payment Frequency Changes are requests from the customer to change the interval for such premiums and deposits. PC/LAN The arrangement of interrelated Personal Computers, routers, servers and other desktop technology within an office, building or neighborhood into a network that permits the sharing of files, printers, applications and other resources. Pen-Based Computing The use of a stylus with a hand held or other computer. Incorporates handwriting recognition features. A common example is the PDA or Personal Digital Assistant (Handspring and Palm Pilot). Percent of Calls Resolved See First Call Resolution and Referrals/Handoffs.



Periodic Payment A Cash Disbursement generated by a computer application based on an Automated Set-up plan established by Policy Administration. The periodic payment is not counted as a Cash Disbursement transaction but related expenses are included in Cash Disbursements Operations Expense. Permanent An Individual Life Product, Permanent includes any traditional cash-value life insurance policy such as whole life, limited pay, and modified life. Personal Identification Number (PIN) The assignment of a PIN provides customer with the ability to execute transfers, allocations and other transactions through the IVR system. It also provides customers with access to their account values and fund performance via the Internet. Policies Paid Applicant accepts the offer of insurance described in the policy, pays the initial premium and the policy is placed in the insurer's book of business as an inforce policy. Exclude policies that are subsequently surrendered during the Free Look Period. Policy Administration Requirement Indicates whether a policy administration transaction requires a form, signature, fax or phone call to effect the transaction. Policy Administration Staff Operations personnel responsible for Policy Administration Transactions. Policy Administration Transactions The Customer Services business process which includes the following: Beneficiary Changes Name Changes Assignments Ownership Changes Mode Changes Dividend Options Changes Duplicate Policies Allocation Changes Fund Transfers Other Policy Administration transactions



Policy Changes A sub-process of Business Transactions, Policy Changes are complex manual transactions handled outside legacy systems that include: Term Conversions Reinstatements Changes - Underwriting required Changes - No underwriting required Other Policy Changes such as an Age Correction Note: Exclude automatic reinstatements within the non-forfeiture period of six months. Policy Statements For example, comprehensive policy statements that are sent out yearly or quarterly. These statements would include all information pertaining to the policy i.e. current premium, cash value, all current details about the policy. Policy Statements are not triggered by a policy transaction. Counts should include any duplicates sent to field offices or sales representatives. Expenses include printing, handling, postage, staff costs for validation and envelope stuffing, and any other related expenses. They are usually generated automatically. Post Retirement Expenses Ongoing expenses incurred for individuals who have retired from active employment with the company. For example, severance, benefits and pension payments. Such expenses are excluded from Operations Expense. Postage Charges by the US Postal Service for the delivery of outgoing and certain incoming mail whether stamped, metered or post-paid. Proactive The opposite of Reactive. Reactive is responding to an event after it has occurred. Proactive is responding to an event before it has occurred. For example, trying to reinstate a policy that has lapsed is reactive, while trying to keep inforce a policy that is about to lapse is proactive. Product Development Introduction of a new product or rider type not currently sold by the company or a significant change in product design/feature. Product Development Expenses Expenses related to the introduction of a new product or rider type not currently sold by the company or a significant change in product design/features. Such expenses are excluded from Operations Expense. IT expenses may arise from the modification of an existing system or the implementation of a new system. Such expenses are included in IT Expense as Other Business Support.



Production An Information Technology term meaning the system or application is in active use by the customer. Professional Development Seminars, conferences and certification programs that improve or update general knowledge in an area of study. Also included are college programs (degree, certificate and non-curricula) that expand an individual's general knowledge. For example, the Life Office Management Association (LOMA) certification program that tests general knowledge of life insurance subjects and the series of seminars/conferences they offer on emerging topics related to life insurance. Purchasing A centralized procurement function that consolidates material and supply requirements throughout the enterprise and negotiates supply agreements with suppliers. Related staff and expense are excluded from Operations Expense. Quality Control See Quality Review. Quality Review The examination of transactions and documentation to assure accuracy. The examination also ensures that the transactions are completed as efficiently as possible while maintaining the desired level of customer satisfaction. The examination encompasses recalculation of values, checking for receipt of necessary documentation, etc. Quality Reviews, often called quality audits, are usually done on a random sample basis (i.e. a quantity less than 100% is examined), but in certain critical areas may include all transactions/documents. Rated All policies are rated as part of the Underwriting and Issue process. However, policies issued with a rating of Standard or better are for the purpose of this survey considered Non-Rated, while policies issued with a rating less than Standard are considered Rated. Reactive The opposite of Proactive. Reactive is responding to an event after it has occurred. Proactive is responding to and event before it has occurred. For example, trying to reinstate a policy that has lapsed is reactive, while trying to keep inforce a policy that is about to lapse is proactive. Records Management The process of filing and retrieving applications, underwriting, change, claims and settlement documentation.



Referrals/Handoffs Percentage of calls handled where the service request is not completed during the initial client/agent contact. Represents calls that are handed off or transferred to another area. See First Call Resolution. Reinstatement The resumption of coverage under a policy which has lapsed. Reinsurance Ceded/Assumed An agreement between two or more insurance companies to share the risk of loss from a single policy or group of policies. Under the agreement the insurer that issued the policy is said to cede all or a part of the underwritten risk and the reinsurer is said to assume that risk. If the decision by the reinsurer is based on specific policy information presented by the insurer, the reinsurance is Facultative. If the reinsurer agrees to assume the risk without underwriting review, the reinsurance is Automatic. Reissued An Issued Policy/Contract is reworked without an underwriter involvement. Remittance A sub-process of Business Transactions, Remittance is the operations process associated with the billing and collection of life premium or annuity deposits. Excludes Treasury and bank charges. Remittance payments may be processed through Electronic Funds Transfer (EFT), Lock Box or Credit Card. Payments not processed by one of these automatic means are considered Internal. Remittance Payment Method The methods tracked in this survey are: Credit Card Electronic Funds Transfer (EFT) Lock Box Internal Remote Printing of Forms The ability to print policy/contract application, claim or other required form on any printer rather than having the form sent through the mail from a centralized distribution point. Renewal The automatic continuation of an insurance policy's inforce status usually through the payment of a due premium.



Rescinds Are returns of initial premium. If the rescind is a result of a company taking a policy back (because of a misstatement in the application) then it is part of Policy Administration. Retail The combination of Career Agents, Independent Agents and Direct Response. For example, the total number of Beneficiary Change transactions completed by Career Agents, Independent Agents and Direct Response. Retaining Assets A retained assets account is a lump sum disbursement option that offers the beneficiary/claimant a checkbook from which payments can be drawn as needed. The beneficiary/claimant is in complete control of the account and can use the checks to pay bills, to transfer funds to an investment account or to close out the account. Such checking accounts are an alternative to the lump sum check. Costs related to their issue/setup are included as Disbursement Expenses but the issue/setups are not counted as transactions. The cost of maintaining the checking account after the initial issue and setup is outside the scope of this survey and is excluded. Retention Measures the rate at which death claim proceeds are retained in your company by being reinvested by the beneficiaries in other products. Returned Mail Returned Mail usually results from mailing policy/contract documents and other communications to the customer and having them returned as undeliverable. While Returned Mail usually results in an Address Change, it is more common that Address Changes are initiated by customer notice to the company either in writing or by phone call (often to the Call Center). Processing expenses related to Returned Mail and Address Changes are included in Operations Expenses where the activities occur. Returned Mail and Address Changes are excluded from all transaction counts except for incoming calls to the Call Center that are counted as Call Center transactions. Sales Leads or Sales Opportunities Sales Leads or Sales Opportunities are generated by CSR's in some Call Centers. The way this typically is handled in an inbound service environment is that the CSR's are trained to listen for specific needs expressed by the caller ("I am retiring soon and want to check on my cash value") or to recognize needs disclosed as a result of a service transaction ("I am getting married next month and want to change my beneficiary"). In these situations, the CSR approaches the customer about their Company being able to meet the need they may possibly have for additional products or services. Sales Office Data Entry See Application Data Entry.



Sales Office Data Entry Staff See Application Data Entry. Sales Office Expense Expenses incurred by the company's sales offices. For example, office space rent and equipment purchased by the company and provided for use in the sales office. Sales Practices/Compliance A sub-category of IT Business Functions. The Sales Practices/Compliance IT expenses include: Complaint Management, Complaint Tracking, Litigation Support and Replacement Detection. Screen Pops Refer to Computer Telephony Integration (CTI). Second-to-Die An Individual Life Product, Second-to-Die is permanent life insurance under which the face amount is payable upon the second death of two joint insureds. Includes fixed and flexible-premium survivorship contracts, whether they are SEC-registered and non-registered. Self Service See Direct Response/Self Service. Service Level Standard Service Level is a Call Center industry standard way of measuring the level of service being provided by customers. An example of a standard is the goal of answering 80% of incoming calls in 20 seconds or less. Some Call Centers try to achieve a higher standard while others choose a lesser standard. Signature Pad A retail point-of-sales (POS) peripheral devise designed to process electronic forms of payment and electronically capture signatures. Skill Based Routing This is technology typically found in a Call Center environment. The routing to a person is based upon their skill and the level of priority you would want the call to have. For example, you can route to skill 1, priority low or both skills. The routing is transparent to the customer. No interaction for them - it can be tied to a prompt selection.



Software Expense A type of Expense associated with the purchase, upgrade and maintenance of applications. Desktop software is usually charged directly to Operations. Infrastructure software is initially charged to IT and subsequently allocated to Operations based on services provided. SOP 98-1 A Statement of Position by the American Institute of Certified Public Accountants (AICPA) on Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. According to this SOP costs incurred in the Application Development Stage of a project’s life cycle should be capitalized. Such costs include payments to third parties for material and services, payroll and payroll related costs of in-house development staff and interest paid for development funding. The Application Development Stage includes:

- design of the software in accordance with the path chosen in the Preliminary Project Stage, including design of the software configuration and software interface,

- coding of the designed software, - installation of the software on appropriate hardware, and - testing (including parallel processing).

The Application Development Stage does not include: - conceptual formulation of alternatives, - evaluation of alternatives, - determination of the existence of needed technology, - final selection of alternatives, - training, - application maintenance, and - General/Administrative overhead.

Capitalization begins when the Preliminary Project Stage is completed; management implicitly, or explicitly, authorizes the project and commits funding; and it is probable that the project will be completed and the software will be used as intended. Capitalization should cease no later than the point at which a computer software project is substantially complete and ready for its intended use (i.e. after all substantial testing is completed). Amortization begins when capitalization ceases. While the SOP recommends straight-line amortization over the expected useful life of the software, it allows that there may be other systematic/rational bases that are more representative of the software’s use. Span of Control A measure of management efficiency that is calculated by dividing the number of managers into the number of employees managed. A high Span of Control does not necessarily mean management is more efficient. The value of the metric is in how your company compares to other similar companies.



Speech Recognition Speech Recognition allows for a computer system to recognize speech. This then allows for the computer system to perform a task based upon what was requested. Some of the tasks requested could be to translate language and type a letter. Speed to Answer This is the average amount of time a caller spends in queue waiting to be connected to a CSR. The queue waiting time begins when the IVR completes initial prompts/electronic messages and looks to pass the call to a CSR. It ends when a CSR picks up the call. Speed to answer is one of the measures of Customer Service Representative (CSR) effectiveness. It is usually one of the statistics developed and reported by the Automated Call Director (ACD). For consistency of reporting, it is important that a standard starting and ending point for measuring Speed to Answer be established and followed by all survey participants. Staff Count See Full Time Equivalent (FTE). Standard Risk The classification of a person applying for a life insurance policy who fits the physical, occupational and other standards on which the normal premium rates are based. Standard Service Level One of the measures of Call Center efficiency, the Standard Service Level is expressed as the percentage of incoming calls answered within a certain number of seconds. For example, the normal standard is 80% of incoming calls answered in 20 seconds or less.

Statement of Account It is generated at the request of the customer. Its main purpose is to communicate certain contract information, such as the current balance of the contract account. Substandard Risk The classification of a person applying for a life insurance policy who does not meet the requirements set for the standard risk. An additional premium is charged on substandard risks to provide for the probability that such a person will have a shorter life span than a standard risk.



Support or Indirect Expense Includes the following support activities in centralized and decentralized sites: Accounting Commissions Support Compliance Regulatory Customer and Product/Tax Reporting Executive Overhead Facilities Finance Human Resources Mail Room Micrographics Output Production Quality Control Postage Records Management Systems Support within Operations Organization (e.g. Help Desk resources) Surrenders When an inforce life insurance policy that has cash value is returned to the insurance company in exchange for the accumulated cash value, the policy is said to have been Cash Surrendered. If the surrender exhausted all of the accumulated cash value in the policy, it is a Full Surrender. If the surrender exhausted only part of the accumulated cash value, it is a partial surrender. Cash Surrenders are often handled differently for smaller cash payments. Companies usually have threshold amount for determining which procedure to follow. Suspended See New Business Application Count. System Functions A subset of Application Development Expense, System Functions are designated as Maintenance, Enhancement and Development.



System Maintenance/Support All activities related to staying in business, i.e. the day-to-day support and operation of existing business system functionality (non-discretionary). Examples include the following: Year 2000 (unless combined with new functions) Replace obsolete technologies (non-discretionary) Regulatory changes Routine maintenance Dividend Scale Changes Management Information/Reporting System Enhancements (Non-development and non-maintenance). All activities related to the augmentation of existing business systems functionality. Examples include the following: Navigation improvements - Graphical User Interface (GUI) Performance tuning Revisions to existing systems Discretionary upgrades (with new functionality) Product enhancements System Development All activities related to the first time installation of a new system or technology. Examples include the following: Replacement of existing system Installation of Vendor software for the first time Introduction of a new service such as a Help Desk or call center Introduction of a new technology System Programmers Expense A subset of Infrastructure Expense, System Programmers Expense includes expenses for database administrators, network maintenance staff and call center IT support staff. Systems Support See System Maintenance/Support. Talk Time This is the average amount of time a CSR actually spends speaking with a customer on the phone, including Hold Time. If Hold Time is tracked separately, Talk Time and Hold Time must be combined for reporting in this survey.



Technical Training Instruction in the technical skills needed to perform assigned activities in the Information Technology area. Telecommunication The transmission of sound waves (voice) and digital packets (data) over wire (e.g. copper, fiber optic, coaxial) or through space (e.g. satellite, microwave). Telecommunications includes the hardware (wires, switches, routers, etc.) used to carry and direct the transmissions and the software (programs, systems, coding, etc.) to translate the transmissions being sent and received. Also included are the tools used to monitor and manage the flow of transmissions. Teleservice (Call Center) The sub-process associated with the telephone call centers. Teleunderwriting The process in which someone other than the sales representative is responsible for collecting initial application underwriting data e.g., family and medical history, occupation, etc. Term An Individual Life Product Line that includes life insurance issued for a specific number of years or to a specific age with little or no cash value. Includes graded-premium life and modified term life. Term Conversion The exchange of term insurance for another plan of insurance at the option of the customer and without evidence of insurability. Third Party A sub-contractor or intermediary for one or both of the primary parties to an agreement, providing a service necessary for completion of the agreement. For example, a broker who gathers applicant information, presents it to several insurance companies from whom insurance offers are received and presented to the applicant is acting as a third party intermediary. A company, not affiliated with the insurance policy between an insurance company and its customers is a third party subcontractor. A subsidiary or other affiliate of one of the primary parties to the agreement is not considered a Third Party, but rather a part of the parent company.



Time Service For New Business, it is the average number of calendar days that elapse from the date underwriting receives (electronic or paper) the application information (underwriting process begins) to the date the policy is mailed to the producer or sales office for delivery. For Customer Service, it is the number of calendar days from the receipt of a transaction to its completion. The Goal is the performance objective the company would like to achieve for a given activity. The Actual is the performance the company actually achieves for that activity. The following Legend will be used in most instances: Day 0 Processed by the end of the day. Day 1 Processed by the end of the next calendar day. Day 2 Processed by the end of the second calendar day. Day 3 Processed by the end of the third calendar day. Day n Processed by the end of the nth calendar day (enter appropriate number). Time service results are more beneficial when reported by survey code and transaction type as opposed to average totals. Therefore, it is imperative that if participants do not know their actual time service they should take a sample and report their estimated time. Total Annual Premium First-year and renewal collected premium for life policies inforce during the survey year. Premium includes base and rider premiums, cash extras and waiver of premium. For universal life policies, include the planned periodic or billed premium but exclude excess premiums paid above that amount. For all policies, include single premiums at 10 percent of the collected amount and include only where a single, lump-sum premium payment covers the entire cost of the policy. For all policies, exclude internal 1035 exchanges. External 1035 exchanges should be included only if they are used as a single premium as described previously, and then they should be counted at 10 percent of the single premium amount. Total Inforce Face Amount The face amount of all individual life insurance inforce. See Annual Statement Exhibit of Life insurance line entitled "In force end of year" for column 4 Ordinary Amount of Insurance. Exclude the face amount of ordinary business not covered by this survey, such as reinsurance assumed, riders, benefits and special provisions.



Total IT Expense Total direct and indirect charges for information technology split by Life and Annuity lines of business. IT Expenses are further separated into Application Development Expense and Infrastructure Expense. The following expenses are excluded from Information Technology Expenses: Corporate Human Resources Corporate Insurance Corporate Pension Plan Corporate Services Credit Union Facilities Services Legal/Law Expenses Operations Expenses for systems activities included in the business organizations (e.g. Operations Help Desk) Post Retirement Expenses Total Line of Business Expense Annual Statement (Blue Book) Analysis of Operations by Lines of Business lines 23 (general insurance expenses) and 24 (taxes, licenses, and fees). Traditional Products Insurance plan providing for payment on the happening of an event (e.g. insured's death) of an amount specified in the policy. Training Instruction in the skills needed to perform assigned activities. Includes efforts to acquire, improve and update skills and knowledge. Training categories include: New Hires Technical Staff (Technical Training) New Products Professional Development Training Hours The annual number of hours of job-related training for Operations Staff. Training Expense A type of expense associated with the education and training of operations personnel.



Transactions Processed For each business sub-process, the annual transaction count completed by a Distribution Channel (Wholesale, Retail, Customer) or by Operations irrespective of where the transaction originated. The sum of Wholesale, Retail, Customer and Operations transaction counts equals 100% of completed transactions. Turnover Rate Voluntary replacements divided by the average staff per year, excluding rightsizing, downsizing or reorganization. See In-house Staff Count for a definition of average staff. Voluntary replacements are resignations, retirements and other employee departures for which the company seeks and finds replacements. Underwriting The process of evaluating the inherent risk involved in issuing a life insurance policy to a given applicant. Detailed functions include determination of requirements, requirement review, suitability review, case management and approval. Underwriting Requirements Information in addition to the data provided in the application that must be obtained, reviewed and accepted before a life insurance policy can be issued. Examples include:

Full Medical Exam BUSS MVR Paramed APS EKG Credit Reports X-ray

Universal An Individual Life Product, Universal is a flexible-premium permanent contract that credits cash values with current interest rates and premium payments, and deducts mortality and expense charges from the cash values. Variable Life An Individual Life Product, Variable Life is an SEC-registered, fixed-premium, permanent contract that houses cash values in a separate account. Cash values fluctuate depending on the performance of investments in the separate account.



Variable Universal An Individual Life Product, Variable Universal is an SEC-registered, flexible-premium, permanent contract that houses cash values in a separate account. Cash values fluctuate depending on performance of investments in the separate account. Voice Recognition Technology that enables a customer to speak responses to electronic inquiries instead of entering them on their telephone key pad. This is used with Interactive Voice Response (IVR) applications to eliminate keying errors and frustration for the customer. Voice Response Unit (VRU) See Interactive Voice Response (IVR). WebTops The function of a WebTop is to allow a user access to personal applications and documents through the use of devices other than a PC to assess the Internet. Web Page A document formatted in Hyper-Text Markup Language (HTML) on a server linked to the World Wide Web identified by a unique Uniform Resource Locator (URL). Wholesale The combination of Banks, Brokers and General Agents. For example, the total number of Beneficiary Change transactions completed by Banks, Brokers and General Agents. Wireless Web Technologies The technology that enables cell phones and hand held personal assistants to access the internet at any time for small tasks. Some of the capabilities currently available include sending and receiving e-mail or the checking of movie listings, plane schedules and stock quotes. Withdrawn See New Business Application Count. WorkflowTechnology See Imaging (Workflow) Technology. Work Site Marketing The marketing of insurance products using a customer's distribution system. An example includes the customer disseminating insurance marketing material directly to an employee on behalf of the insurance company.



Written See New Business Application Count. XML XML is a set of rules that allows for designing and structuring data through text format. Text format allows the user the access to the data without the program that designed it. X-ray A medical diagnostic tool used in the underwriting process to evaluate the applicant's suitability for coverage. See Underwriting Requirements.

APPENDIX B – TCi LIONS 2004 DETAILED DATA TABLE LIST


APPENDIX B

TCi LIONS 2004 COMPREHENSIVE LIST OF DETAILED DATA TABLES and

TABLE OF CONTENTS FOR TABLES PUBLISHED IN THIS REPORT NOTE: The Formal Report contains a subset of the Detailed Data Tables generated for participants in

the actual study. For non-participants, Appendix B serves as a Table of Contents for the detailed tables published in the

Survey Findings (Section III.) of this report. Tables that have a page number next to them are included in this report. Those without a page number were delivered only to participants in the study.

For participants in the study, Appendix B serves as both the Table of Contents for tables published in

the Survey Findings (Section III.), but it is also a cross-reference to the complete list of detailed tables delivered to them earlier in the year.

In this the Survey Findings (Section III.), the number in parenthesis in the table heading represents the section and table number of participants’ results. For example, in the following heading [Table 25 - Trend (I-34)], the “(I-34)” cross-references this table to the participants’ Detailed Data Table number, Section I, Table 34. “Table 25” is simply the sequential number assigned to the table for purposes of this report only.

TCi LIONS 2004 DETAILED DATA TABLE LIST - APPENDIX B


Part I. Overall Top View Metrics ...................................................................PAGE

Section A. Line of Business and Adjusted Line of Business Metrics Table 1 - Average Line of Business Expense ($ Millions) .........................................................37 Table 2 - Average Derivation of Total Line of Business - Adjustments, Field and Extraordinary Expense Table 3 - Line of Business Components as a Percent of Adjusted Line of Business Expense Table 4 - New Business and Customer Service Line of Business Components as a Percent of Adjusted Line of Business Expense Table 5 - Trend: New Business Operations Expense as a Percent of Adjusted Line of Business Expense................................................................................................37 Table 6 - Trend: Customer Service Operations Expense as a Percent of Adjusted Line of Business Expense ...................................................................................37 Table 7 - Trend: Total Operations Expense as a Percent of Adjusted Line of Business Expense ...............................................................................................................37

Table 8 - New Business and Customer Service Application IT Expense as a Percent of Adjusted Line of Business Expense ..................................................38

Table 9 - New Business and Customer Service Operations and Application IT Expense as a Percent of Adjusted Line of Business Expense........................38

Table 10 - Trend: New Business and Customer Service Infrastructure IT Expense as a Percent of Adjusted Line of Business Expense ..................................................38

Table 11 - Trend: Total Operations and New Business and Customer Service IT Expense as a Percent of Adjusted Line of Business Expense........................38

Table 12 - Trend: Product, Distribution and Other IT Expense as a Percent of Adjusted Line of Business Expense ...................................................................................39 Table 13 - Trend: Other Adjusted Line of Business Expense as a Percent of Adjusted Line of Business Expense ...................................................................................39 Table 14 - IT Expense Components as a Percent of Adjusted Line of Business Expense Table 15 - Trend: Grand Total IT Expense as a Percent of Adjusted Line of Business Expense ...............................................................................................................39 Section B. Total Annual Premium Metrics Table 16 - Average Premium Income by Life Product ($ Millions) .............................................40 Table 17 - Trend: Average Total Annual Premium ($ Millions) ..................................................40 Table 18 - Average Percent of Total Premium by Type of Policy Table 19 - New Business and Customer Service Line of Business Components per $1,000 Total Annual Premium Table 20 - Trend: New Business Operations Expense per $1,000 of Total Annual Premium......40 Table 21 - Trend: Customer Service Operations Expense per $1,000 of Total Annual Premium .................................................................................................40 Table 22 - Trend: Total Operations Expense per $1,000 Total Annual Premium ........................40



Part I. Overall Top View Metrics ...................................................................PAGE Section B. Total Annual Premium Metrics (Continued) Table 23 - Trend: New Business and Customer Service Application IT Expense per $1,000 of Total Annual Premium .......................................................................41 Table 24 - Trend: Total New Business and Customer Service Operation and Application IT Expense per $1,000 of Total Annual Premium..........................41 Table 25 - Trend: New Business and Customer Service Infrastructure Expense per $1,000 of Total Annual Premium .......................................................................41

Table 26 - Trend: Total Operations and New Business and Customer Service IT Expense per $1,000 of Total Annual Premium...................................................41 Table 27 - Trend: Product, Distribution and Other IT Expense per $1,000 of Total Annual Premium..............................................................................................................42 Table 28 - Trend: Other Adjusted Line of Business Expense per $1,000 of Total Annual Premium..............................................................................................................42 Table 29 - Trend: Adjusted Line of Business Expense per $1,000 of Total Annual Premium.....42 Table 30 - IT Expense Components per $1,000 of Total Annual Premium Table 31 - Trend: Grand Total IT Expense per $1,000 of Total Annual Premium.......................42

Section C. Inforce Policy Metrics Table 32 - Average Policy Counts by Life Product (Thousands) Table 33 - Trend: Average Inforce Policies (Thousands) .............................................................43 Table 34 - Percent of Total Policies by Type of Policy Table 35 - Average Premium per Inforce by Type of Policy Table 36 - Adjusted Line of Business Components per Inforce Policy Table 37 - Trend: New Business Operations Expense per Inforce Policy ....................................43 Table 38 - Trend: Customer Service Operations Expense per Inforce Policy ..............................43 Table 39 - Trend: Total Operations Expense per Inforce Policy ..................................................44 Table 40 - Trend: New Business and Customer Service Application IT Expense per Inforce Policy......................................................................................................44 Table 41 - Trend: Total New Business and Customer Service Operation and Application IT Expense per Inforce Policy ........................................................44 Table 42 - Trend: New Business and Customer Service Infrastructure Expense per Inforce Policy......................................................................................................44 Table 43 - Trend: New Business and Customer Service Total IT Expense per Inforce Policy .................................................................................................................45 Table 44 - Trend: Total Operations and Total New Business and Customer Service IT Expense per Inforce Policy .................................................................................45 Table 45 - Trend: Product, Distribution and Other IT Expense per Inforce Policy......................45 Table 46 - Trend: Other Adjusted Line of Business Expense per Inforce Policy.........................45 Table 47 - Trend: Adjusted Line of Business Expense per Inforce Policy ...................................46 Table 48 - IT Expense Components per Inforce Policy Table 49 - Trend: Grand Total IT Expense per Inforce Policy .....................................................46



Part I. Overall Top View Metrics...........................................................................PAGE

Section D. Inforce Face Amount Metrics Table 50 - Average Inforce Face Amount ($ Millions) Table 51 - Trend: Average Inforce Face Amount ($ Millions).....................................................46 Table 52 - Adjusted Line of Business Components per $1,000 Inforce Face Amount Table 53 - Trend: New Business Operations Expense per $1,000 Inforce Face Amount.............47 Table 54 - Trend: Customer Service Operations Expense per $1,000 Inforce Face Amount.......47 Table 55 - Trend: Total Operations Expense per $1,000 Inforce Face Amount ...........................47 Table 56 - Trend: New Business and Customer Service Application IT Expense per $1,000 Inforce Face Amount .............................................................................47 Table 57 - Trend: Total New Business and Customer Service Operation and Application IT Expense per $1,000 Inforce Face Amount.....................................................48 Table 58 - Trend: New Business and Customer Service Infrastructure IT Expense per $1,000 Inforce Face Amount ..............................................................................48 Table 59 - Trend: Total Operations and Total New Business and Customer Service IT Expense per $1,000 Inforce Face Amount .........................................................48 Table 60 - Trend: Product, Distribution and Other IT Expense per $1,000 Inforce Face Amount.......................................................................................................48 Table 61 - Trend: Other Adjusted Line of Business Expense per $1,000 Inforce Face Amount ...............................................................................................................49 Table 62 - Trend: Adjusted Line of Business Expense per $1,000 Inforce Face Amount............49 Table 63 - IT Expense Components per $1,000 Inforce Face Amount Table 64 - Trend: Grand Total IT Expense per $1,000 Inforce Face Amount..............................49 Section E. Total Operations Expense Metrics Table 65 - Average Individual Life Adjusted Line of Business Expense, Operations and Application IT Expense ($ Thousands) Table 66 - Trend: Average Life Operations Expense (Millions) ..................................................51 Table 67 - Average Life Operations Expense by Business Process ($ Thousands) Table 68 - Percent of Total Life Operations Expense by Business Process Table 69 - Trend: New Business Operations Expense as a Percent of Total Life Operations Expense.....................................................................................51 Table 70 - Trend: Policy Administration Operations Expense as a Percent of Total Life Operations Expense.....................................................................................51 Table 71 - Trend: Policy Statements Operations Expense as a Percent of Total Life Operations Expense ............................................................................................51 Table 72 - Trend: Policy Change Operations Expense as a Percent of Total Life Operations Expense.....................................................................................52 Table 73 - Trend: Claims Operations Expense as a Percent of Total Life Operations Expense ...............................................................................................................52 Table 74 - Trend: Disbursements Operations Expense as a Percent of Total Life Operations Expense ............................................................................................52 Table 75 - Trend: Call Center Operations Expense as a Percent of Total Life Operations Expense ............................................................................................52



Part I. Overall Top View Metrics ..................................................................PAGE Section E. Total Operations Expense Metrics (Continued) Table 76 - Trend: Remittance Operations Expense as a Percent of Total Life Operations Expense ............................................................................................53 Table 77 - Trend: Customer Service Operations Expense as a Percent of Total Life Operations Expense ............................................................................................53 Section F. Total Staff and Transactions Metrics Table 78 - Average Life Operations Staff by Business Process Table 79 - Percent of Total Life Operations Staff by Business Process Table 80 - Average Life Operations Transactions by Business Process Table 81 - Business Process Transactions as Percent of Total Annuity Operations Transactions Table 82 - Trend: Call Center Calls as a Percent of Total Life Transactions ...............................54 Table 83 - Trend: Call Center Calls as a Percent of Total Customer Service Transactions .........54 Section G. Total Processing Expense Metrics Table 84 - Trend: New Business Processing Expense ..................................................................55 Table 85 - Trend: Customer Service Processing Expense ............................................................55 Table 86 - Trend: Total Processing Expense ................................................................................55 Table 87 - Operations and IT Expense as a Percent of Total Processing Expense Table 88 - Trend: New Business Processing Expense as a Percent of Total Processing Expense.............................................................................................55 Table 89 - Trend: Customer Service Processing Expense as a Percent of Total Processing Expense.............................................................................................56 Table 90 - Trend: Total Operations Expense as a Percent of Total Processing Expense .............56 Table 91 - Trend: New Business and Customer Service Total IT Expense as a Percent of Total Processing Expense..................................................................56



Part II. New Business ........................................................................................PAGE Section A. New Business Staff Metrics

Table 1 - Average New Business Staff Table 2 - Trend: Average New Business Staff Count .................................................................57

Table 3 - New Business Percent of Staff by Activity Table 4 - New Business Staff Metrics.........................................................................................57 Section B. New Business Operations Expense Metrics

Table 5 - Average New Business Operations Expense ($ Thousands) Table 6 - Trend: Average New Business Operations Expense ($ Thousands) ...........................58 Table 7 - New Business Operations Expense as a Percent of Total Section C. New Business First Year Premium Metrics Table 8 - Average First Year Annualized Premium by Life Product ($ Millions) Table 9 - Trend: Average First Year Annualized Premium ($ Millions)....................................58 Table 10 - Percent of First Year Annualized Premium by Life Product Table 11 - New Business Metrics per $1,000 First Year Premium Table 12 - Trend: Underwriting Requirements Expense per $1,000 First Year Premium............59 Table 13 - Trend: New Business Staff and Underwriting Requirements Expense per $1,000 First Year Premium.................................................................................59 Table 14 - Trend: New Business Application IT Expense per $1,000 First Year Premium.........59 Table 15 - Trend: New Business Staff, Underwriting Requirements and New Business Application IT Expense per $1,000 First Year Premium ...................................59 Table 16 - Trend: New Business Staff, Underwriting Requirements and New Business Total IT Expense per $1,000 First Year Premium..............................................60 Table 17 - New Business Staff Expense per $1,000 First Year Premium Table 18 - Percent of New Business Life First Year Premium by Distribution Channel .............60 Section D. New Business Adjusted Line of Business Expense Metrics Table 19 - New Business Metrics as a Percent of Adjusted Line of Business Expense Table 20 - Trend: Underwriting Requirements Expense as a Percent of Adjusted Line of Business Expense ..................................................................................61 Table 21 - Trend: New Business Staff and Underwriting Requirements Expense as a Percent of Adjusted Line of Business Expense ...........................................61 Section E. New Business Total Annual Premium Metrics Table 22 - New Business Metrics per $1,000 Total Annual Premium Table 23 - Trend: Underwriting Requirements Expense per $1,000 Total Annual Premium ......61 Table 24 - Trend: New Business Staff and Underwriting Requirements Expense per $1,000 Total Annual Premium......................................................................62



Part II. New Business ........................................................................................PAGE Section F. New Business Inforce Policy Metrics Table 25 - New Business Metrics per Inforce Policy Table 26 - Trend: Underwriting Requirements Expense per Inforce Policy.................................62 Table 27 - Trend: New Business Staff and Underwriting Requirements Expense per Inforce Policy .................................................................................62 Section G. New Business Total Annual Face Amount Metrics Table 28 - Average Total Annual Face Amount Table 29 - New Business Metrics per $1 Million Total Annual Face Amount Table 30 - Trend: Underwriting Requirements Expense per $1 Million Total Annual Face Amount ..........................................................................................63 Table 31 - Trend: New Business Staff and Underwriting Requirements Expense per $1 Million Total Annual Face Amount ........................................................63 Section H. New Business Face Amount Metrics Table 32 - New Business Face Amount Averages Table 33 - New Business Metrics per $1 Million New Business Face Amount Table 34 - Trend: Underwriting Requirements Expense per $1 Million New Business Face Amount........................................................................................64 Table 35 - Trend: New Business Staff and Underwriting Requirements Expense per $1 Million New Business Face Amount ........................................64 Table 36 - Trend: New Business Application IT Expense per $1 Million New Business Face Amount........................................................................................64 Table 37 - Trend: New Business Staff, Underwriting and Application IT Expense per $1 Million New Business Face Amount .......................................................64 Table 38 - Underwriting Requirements per $ Million of New Business Face Amount Table 39 - Trend: Total Underwriting Requirements per $ Million of New Business Face Amount.......................................................................................................65 Section I. New Business Application Volume Averages Table 40 - Average New Business Application Activity - All Applications Table 41 - Trend: Average Applications Written..........................................................................65 Table 42 - Average New Business Application Activity - Under $100,000 Face Amount Table 43 - Average New Business Application Activity - $100,000 to $249,999 Face Amount Table 44 - Average New Business Application Activity - $250,000 to $499,999 Face Amount Table 45 - Average New Business Application Activity - $500,000 to $999,999 Face Amount Table 46 - Average New Business Application Activity - $1,000,000 to $4,999,999 Face Amount Table 47 - Average New Business Application Activity - $5 Million and Over Face Amount



Part II. New Business ........................................................................................PAGE Section J. New Business Written Applications Metrics Table 48 - New Business Metrics per Written Applications Table 49 - Trend: Underwriting Requirements Expense per Written Applications......................66 Table 50 - Trend: New Business Staff and Underwriting Requirements Expense per Written Applications...........................................................................................66 Table 51 - Trend: New Business Application IT Expense per Written Applications ...................66 Table 52 - Trend: New Business Staff, Underwriting Requirements and Application IT Expense per Written Applications .................................................................67 Table 53 - Trend: New Business Staff, Underwriting Requirements and Total New Business IT Expense per Written Applications..........................................67 Table 54 - New Business Staff Expense per Written Applications Table 55 - New Business Application Activity as a Percent of Written Applications Table 56 - Trend: Applications Issued as a Percent of Written Applications ...............................67 Table 57 - Trend: Applications Paid as a Percent of Written Applications ..................................67 Table 58 - New Business Applications Withdrawn as a Percent of Total Written by Face Amount Range Table 59 - New Business Applications Suspended as a Percent of Total Written by Face Amount Range Table 60 - New Business Applications Issued as a Percent of Total Written by Face Amount Range Table 61 - New Business Applications Declined as a Percent of Total Written by Face Amount Range Table 62 - New Business Applications Paid as a Percent of Total Written by Face Amount Range Table 63 - New Business Applications Written as a Percent of Total Written by Face Amount Range Table 64 - New Business Written Applications by Type of Decline - All Applications Table 65 - Trend: New Business Declines as a Percent of Written Applications.........................68 Table 66 - Distribution of New Business Written Applications by Type of Decline – Face Amount Under $100,000 Table 67 - Distribution of New Business Written Applications by Type of Decline – Face Amount $100,000 to $249,999 Table 68 - Distribution of New Business Written Applications by Type of Decline – Face Amount $250,000 to $499,999 Table 69 - Distribution of New Business Written Applications by Type of Decline – Face Amount $500,000 to $999,999 Table 70 - Distribution of New Business Written Applications by Type of Decline – Face Amount $1,000,000 to $4,999,999 Table 71 - Distribution of New Business Written Applications by Type of Decline – Face Amount $5,000,000 and over Table 72 - Average Written Applications by Type of Underwriting Requirement Table 73 - Underwriting Requirements by Type as a Percent of Written Applications Table 74 - Trend: Total Underwriting Requirements per Written Applications...........................68



Part II. New Business ........................................................................................PAGE Section J. New Business Written Applications Metrics (Continued) Table 75 - Trend: Full Medical Exam Requirements as a Percent of Written Applications.........68 Table 76 - Trend: BUSS Requirements as a Percent of Written Applications .............................68 Table 77 - Trend: MVR Requirements as a Percent of Written Applications ..............................69 Table 78 - Trend: Paramed Requirements as a Percent of Written Applications .........................69 Table 79 - Trend: APS Requirements as a Percent of Written Applications ................................69 Table 80 - Trend: EKG Requirements as a Percent of Written Applications ...............................69 Table 81 - Trend: Credit Report Requirements as a Percent of Written Applications..................70 Table 82 - Trend: X-ray Requirements as a Percent of Written Applications ..............................70 Table 83 - Trend: Other Requirements as a Percent of Written Applications ..............................70 Table 84 - Underwriting Requirements per Paid Applications by Face Amount Band Table 85 - Trend: Underwriting Requirements per Paid Application - Under $100,000..............70 Table 86 - Trend: Underwriting Requirements per Paid Application – $100,000 to $249,999 .........................................................................................71 Table 87 - Trend: Underwriting Requirements per Paid Application – $250,000 to $499,999 .........................................................................................71 Table 88 - Trend: Underwriting Requirements per Paid Application – $500,000 to $999,999 .........................................................................................71 Table 89 - Trend: Underwriting Requirements per Paid Application – $1,000,000 to $4,999,999 ...................................................................................71 Table 90 - Underwriting Requirements per Paid Application - $5,000,000 and Over .................72 Table 91 - Trend: Total Underwriting Requirements per Paid Application .................................72 Table 92 - Underwriting Requirements as a Percent of Written Applications – Under $100,000 Face Amount Table 93 - Underwriting Requirements as a Percent of Written Applications - $100,000 to $249,999 Face Amount Table 94 - Underwriting Requirements as a Percent of Written Applications - $250,000 to $499,999 Face Amount Table 95 - Underwriting Requirements as a Percent of Written Applications - $500,000 to $999,999 Face Amount Table 96 - Underwriting Requirements as a Percent of Written Applications - $1,000,000 to $4,999,999 Face Amount Table 97 - Underwriting Requirements as a Percent of Written Applications - $5 Million and Over Face Amount Section K. New Business Applications Issued Business Metrics Table 98 - New Business Staff Expense per Issued Application Table 99 - New Business Application Time Service - All Applications Table 100 - Trend: New Business Time Service Days - All Applications .....................................72 Table 101 - New Business Application Time Service - Under $100,000 Face Amount Table 102 - Trend: New Business Time Service Days Overall – Under $100,000 Face Amount............................................................................73



Part II. New Business ........................................................................................PAGE Table 103 - New Business Application Time Service – $100,000 to $249,999 Face Amount Table 104 - Trend: New Business Time Service Days Overall – $100,000 to $249,999 Face Amount...................................................................73 Table 105 - New Business Application Time Service – $250,000 to 499,999 Face Amount Table 106 - Trend: New Business Time Service Days Overall – $250,000 to 499,999 Face Amount.....................................................................73 Table 107 - New Business Application Time Service - $500,000 to 999,999 Face Amount Table 108 - Trend: New Business Time Service Days Overall - $500,000 to 999,999 Face Amount......................................................................................................73 Section K. New Business Applications Issued Business Metrics (Continued) Table 109 - New Business Application Time Service – $1,000,000 to $4,999,999 Face Amount Table 110 - Trend: New Business Time Service Days Overall – $1,000,000 to $4,999,999 Face Amount.............................................................74 Table 111 - New Business Application Time Service – $5,000,000 and Over Face Amount Table 112 - Trend: New Business Time Service Days Overall – $5,000,000 and Over Face Amount ....................................................................74 Table 113 - New Business paid and Reissued Application Activity as a Percent of Issued Table 114 - New Business Age of Insured and Quality Review Table 115 - Trend: Average Age of Primary Insured .....................................................................74 Table 116 - New Business Applications Issued as a Percent of Total Issued by Face Amount Range Table 117 - New Business Applications Paid as a Percent of Total Issued by Face Amount Range Table 118 - New Business Issued Cases by Classification - All Applications Table 119 - Trend: New Business Classifications as a Percent of Issued Applications .................74 Table 120 - Distribution of New Business Issued Cases by Classification - Face Amount Under $100,000 Table 121 - Distribution of New Business Issued Cases by Classification - Face Amount $100,000 to $249,999 Table 122 - Distribution of New Business Issued Cases by Classification - Face Amount $250,000 to $499,999 Table 123 - Distribution of New Business Issued Cases by Classification - Face Amount $500,000 to $999,999 Table 124 - Distribution of New Business Issued Cases by Classification - Face Amount $1,000,000 to $4,999,999 Table 125 - Distribution of New Business Issued Cases by Classification - Face Amount $5,000,000 and over



Part II. New Business ........................................................................................PAGE Table 126 - New Business Percent of Total Issues by Classification Table 127 - New Business Percent of Issues Non-Rated within Face Amount Ranges Table 128 - New Business Percent of Issues Rated within Face Amount Ranges Section L. New Business Applications Paid Business Metrics Table 129 - New Business First Year Premium and Face Amount Averages Table 130 - Trend: New Business First Year Premium per Paid Application ................................75 Table 131 - New Business Applications Paid as a Percent of Total Paid by Face Amount Range Table 132 - Trend: New Business Applications Paid as a Percent of Total Paid – Under $100,000 Face Amount............................................................................75 Table 133 - Trend: New Business Applications Paid as a Percent of Total Paid – $100,000 to $249,000 Face Amount...................................................................75

Table 134 - Trend: New Business Applications Paid as a Percent of Total Paid – $250,000 to $499,999 Face Amount...................................................................76 Table 135 - Trend: New Business Applications Paid as a Percent of Total Paid – $500,000 to $999,999 Face Amount...................................................................76 Table 136 - Trend: New Business Applications Paid as a Percent of Total Paid – $1,000,000 to $4,999,999 Face Amount.............................................................76 Table 137 - Trend: New Business Applications Paid as a Percent of Total Paid – $5,000,000 and Over Face Amount ....................................................................76 Section M. New Business Applications Suspended, Declined and Withdrawn Metrics Table 138 - New Business Applications Withdrawn as a Percent of Total Withdrawn by Face Amount Range Table 139 - New Business Applications Suspended as a Percent of Total Suspended by Face Amount Range Table 140 - New Business Applications Declined as a Percent of Total Declined by Face Amount Range Table 141 - Declines by Type of Decline Overall Table 142 - Medical Declines as a Percent of Total Declines within Face Amount Range Table 143 - Administrative Declines as a Percent of Total Declines within Face Amount Range Section N. Other New Business Metrics Table 144 - Reinsurance Table 145 - Percent of Total Underwritten External 1035 Exchanges by Face Amount Range Table 146 - Underwriting and Issue Business Process - Responsibility for Entering Initial Underwriting Application Data Table 147 - The Teleunderwriting Process Table 148 - Teleunderwriting Metrics Table 149 - New Products, Expert Systems, Online and Other New Business Metrics



Part III. Customer Service .................................................................................PAGE Section A. Customer Service Staff Metrics Table 1 - Average Customer Service Staff Table 2 - Trend: Customer Service Staff Count..........................................................................77 Table 3 - Customer Service Staff Metrics Section B. Customer Service Operations Expense Metrics Table 4 - Trend: Customer Service Operations Expense ............................................................78 Table 5 - Business Process Expense as a Percent of Customer Service Operations Expense Table 6 - Trend: Policy Administration as a Percent of Customer Service Operations Expense ...............................................................................................................78 Table 7 - Trend: Policy Statements as a Percent of Customer Service Operations Expense ...............................................................................................................78 Section B. Customer Service Operations Expense Metrics (Continued) Table 8 - Trend: Policy Change as a Percent of Customer Service Operations Expense ...............................................................................................................79 Table 9 - Trend: Claims as a Percent of Customer Service Operations Expense .......................79 Table 10 - Trend: Disbursements as a Percent of Customer Service Operations Expense ...............................................................................................................79 Table 11 - Trend: Call Center as a Percent of Customer Service Operations Expense ...............................................................................................................79 Table 12 - Trend: Remittance as a Percent of Customer Service Operations Expense ...............................................................................................................80 Section C. Customer Service Adjusted Line of Business Expense Metrics Table 13 - Customer Service Metrics as a Percent of Adjusted Line of Business Expense Table 14 - Trend: Customer Service Operations Expense as a Percent of Adjusted Line of Business Expense ...................................................................................80 Table 15 - Trend: Customer Service Application IT Expense as a Percent of Adjusted Line of Business Expense ...................................................................................81 Table 16 - Trend: Customer Service Operations and Application IT Expense as a Percent of Adjusted Line of Business Expense ..................................................81 Table 17 - Trend: Customer Service Operations and Customer Service Total IT Expense as a Percent of Adjusted Line of Business Expense ...........................................81



Part III. Customer Service .................................................................................PAGE Section D. Customer Service Total Annual Premium Metrics Table 18 - Customer Service Metrics per $1,000 Total Annual Premium Table 19 - Trend: Customer Service Operations Expense per $1,000 Total Annual Premium ....82 Table 20 - Trend: Customer Service Application IT Expense per $1,000 Total Annual Premium..............................................................................................................82 Table 21 - Trend: Customer Service Operations and Application IT Expense per $1,000 Total Annual Premium............................................................................82 Table 22 - Trend: Customer Service Operations and Customer Service Total IT Expense per $1,000 Total Annual Premium.......................................................82 Table 23 - Business Process Expense per $1,000 of Total Annual Premium Table 24 - Trend: Inforce Administration Cost per $1,000 Total Annual Premium.....................83 Section E. Customer Service Inforce Policy Metrics Table 25 - Customer Service Metrics per Inforce Policy Table 26 - Trend: Customer Service Operations Expense per Inforce Policy ..............................83 Table 27 - Trend: Customer Service Application IT Expense per Inforce Policy ........................83 Table 28 - Trend: Customer Service Operations and Application IT Expense per Inforce Policy......................................................................................................84 Table 29 - Trend: Customer Service Operations and Customer Service Total IT Expense per Inforce Policy .................................................................................84 Table 30 - Customer Service Transactions per Thousand Inforce Policies Table 31 - Trend: Inforce Administration Activity Level per Thousand Inforce Policies............84 Table 32 - Trend: Total Customer Service Activity Level per Thousand Inforce Policies Table 33 - Business Process Expense per Inforce Policy Table 34 - Trend: Inforce Administration Cost per Inforce Policy...............................................84 Section F. Customer Service Inforce Face Amount Metrics Table 35 - Customer Service Metrics per $1 Million Inforce Face Amount Table 36 - Trend: Customer Service Operations Expense per $1 Million Inforce Face Amount ...............................................................................................................85 Table 37 - Trend: Customer Service Application IT Expense per $1 Million Inforce Face Amount.......................................................................................................85 Table 38 - Trend: Customer Service Operations and Application IT Expense per $1 Million Inforce Face Amount ........................................................................85 Table 39 - Trend: Customer Service Operations and Customer Service Total IT Expense per $1 Million Inforce Face Amount....................................................86 Section G. Customer Service Transaction Metrics Table 40 - Trend: Average Customer Service Transactions .........................................................86 Table 41 - Customer Service Operations and IT Unit Costs Table 42 - Trend: Customer Service Operations Expense per Customer Service Transaction..........................................................................................................86



Part III. Customer Service .................................................................................PAGE Table 43 - Trend: Customer Service Application IT Expense per Customer Service Transaction..........................................................................................................87

Table 44 - Trend: Customer Service Operations and Application IT Expense per Transaction..........................................................................................................87 Table 45 - Trend: Customer Service Operations and Customer Service Total IT Expense per Transaction.....................................................................................87 Table 46 - Business Process Expense per Transaction Table 47 - Trend: Inforce Administration Unit Cost.....................................................................87 Table 48 - Customer Service Weighted Unit Cost Table 49 - Trend: Inforce Administration Weighted Unit Cost per Transaction ..........................88 Table 50 - Trend: Customer Service Operations Expense Weighted Unit Cost ...........................88 Table 51 - Customer Service Operations and IT Weighted Unit Costs

Part IV. Policy Administration Section A. Policy Administration Staff and Operations Expense Metrics Table 1 - Average Policy Administration Staff and Operations Expense Table 2 - Policy Administration Staff Metrics Section B. Policy Administration Adjusted Line of Business Expense, Premium and Face Amount Metrics

Table 3 - Policy Administration Operations Expense per Adjusted Line of Business Expense, Premium and Face Amount Table 4 - Trend: Policy Administration Operations Expense as a Percent of Adjusted Line of Business Expense ...................................................................................90 Table 5 - Trend: Policy Administration Operations Expense per $1,000 Total Annual Premium .................................................................................................90 Table 6 - Trend: Policy Administration Operations Expense per $ Million Inforce Face Amount.......................................................................................................90

Section C. Policy Administration Inforce Policy, Transaction and Quality Review Metrics Table 7 - Average Policy Administration Transactions by Type of Transaction Table 8 - Policy Administration Transactions as a Percent of Total Policy Administration Transactions Table 9 - Policy Administration Inforce Policy, Transaction and Quality Review Metrics Table 10 - Trend: Policy Administration Operations Expense per Inforce Policy .......................91 Table 11 - Trend: Policy Administration Unit Cost ......................................................................91

Table 12 - Trend: Policy Administration Activity per 1,000 Inforce Policies..............................91



Part IV. Policy Administration..........................................................................PAGE Section D. Policy Administration Transaction Origination, Time Service and Requirements Table 13 - Non-Financial Transactions Origination Table 14 - Financial Transactions Origination Table 15 - Total Policy Administration Transaction Origination Table 16 - Policy Administration Non-Financial Time Service Table 17 - Trend: Absolute/ Collateral Assignments Time Service .............................................92 Table 18 - Trend: Beneficiary Changes Time Service ..................................................................92 Table 19 - Trend: Dividend Option Changes Time Service..........................................................92 Table 20 - Trend: Duplicate Policies Time Service ......................................................................93 Table 21 - Trend: Inquiries Time Service .....................................................................................93 Table 22 - Trend: Name Changes Time Service ...........................................................................93 Table 23 - Trend: Ownership Changes Time Service ...................................................................93 Table 24 - Trend: Other Non-Financial Changes Time Service ...................................................94 Table 25 - Policy Administration Financial Time Service Table 26 - Trend: Allocation Changes Time Service....................................................................94 Table 27 - Trend: Inter Fund Transfer Time Service ....................................................................94 Table 28 - Trend: Other Financial Changes Time Service............................................................94 Table 29 - Policy Administration Transaction Requirements and Capabilities Section E. Conservation Table 30 - Conservation Organizational Structure Table 31 - Conservation Effort Described Table 32 - For Which Products is Conservation Attempted Table 33 - Face Amount Saved and Quality Review

Part V. Policy Statements Section A. Policy Statement Staff and Operations Expense Metrics Table 1 - Average Policy Statements Staff and Operations Expense Table 2 - Policy Statement Staff Metrics Section B. Policy Statement Adjusted Line of Business Expense, Premium and Face Amount Metrics Table 3 - Policy Statement Operations Expense per Adjusted Line of Business Expense, Premium and Face Amount Table 4 - Trend: Policy Statement Operations Expense as a Percent of Adjusted Line of Business Expense ...................................................................................96 Table 5 - Trend: Policy Statement Operations Expense per $1,000 Total Annual Premium..............................................................................................................96 Table 6 - Trend: Policy Statement Operations Expense per $ Million Inforce Face Amount.......................................................................................................96

Part V. Policy Statements .................................................................................PAGE



Section C. Policy Statement Inforce Policy, Transaction and Quality Review Metrics Table 7 - Average Policy Statement Transactions and Number of Pages Table 8 - Policy Statement Inforce Policy, Statement and Quality Review Metrics Table 9 - Trend: Policy Statement Operations Expense per Inforce Policy................................97 Table 10 - Trend: Policy Statement Unit Cost ..............................................................................97 Table 11 - Trend: Policy Statement Activity per 1,000 Inforce Policies ......................................97 Section D. Policy Statement Delivery Practices Table 12 - Policy Statement Distribution Methods - Agents vs. Clients Table 13 - Policy Statement Distribution Methods - Electronic or Paper to Agents Table 14 - Policy Statement Distribution Methods - Electronic or Paper to Clients Table 15 - Policy Statement Mailing Frequency Table 16 - Statement Consolidation and Householding Table 17 - Policy Statements Sent if No Activity

Part VI. Policy Changes

Section A. Policy Change Staff and Operations Expense Metrics Table 1 - Average Policy Change Staff and Operations Expense Table 2 - Policy Change Staff Metrics ........................................................................................98 Section B. Policy Change Adjusted Line of Business Expense, Premium and Face Amount Metrics Table 3 - Policy Change Operations Expense per Adjusted Line of Business Expense, Premium and Face Amount Table 4 - Trend: Policy Change Operations Expense as a Percent of Adjusted Line of Business Expense................................................................................................99 Table 5 - Trend: Policy Change Operations Expense per $1,000 Total Annual Premium .........99 Table 6 - Trend: Policy Change Operations Expense per $ Million Inforce Face Amount........99 Section C. Policy Change Inforce Policy, Transaction and Quality Review Metrics Table 7 - Average Policy Change Transactions by Type of Transaction Table 8 - Policy Change Transactions as a Percent of Total Policy Change Transactions Table 9 - Policy Changes Inforce Policy, Transaction and Quality Review Metrics Table 10 - Trend: Policy Change Operations Expense per Inforce Policy .................................100 Table 11 - Trend: Policy Change Unit Cost ................................................................................100 Table 12 - Trend: Policy Change Activity per 1,000 Inforce Policies........................................100



Part VI. Policy Changes .....................................................................................PAGE Section D. Policy Change Transaction Origination, Time Service and Requirements Table 13 - Policy Change - Term Conversion Transaction Origination and Time Service Table 14 - Trend: Term Conversion Time Service .....................................................................101 Table 15 - Policy Change - Reinstatement Transaction Origination and Time Service Table 16 - Trend: Reinstatement Time Service ..........................................................................101 Table 17 - Policy Change - Other Changes Transaction Origination and Time Service Table 18 - Trend: Other Policy Changes Time Service ..............................................................101 Table 19 - Total Policy Change Transaction Origination Table 20 - Policy Change Transaction Requirements and Capabilities

Part VII. Claims

Section A. Claims Staff and Operations Expense Metrics Table 1 - Average Claims Staff and Operations Expense Table 2 - Claims Staff Metrics Table 3 - Claims Operations Expense as a Percent of Total Claims Operations Expense Section B. Claims Adjusted Line of Business Expense, Premium and Face Amount Metrics Table 4 - Claims Operations Expense per Adjusted Line of Business Expense, Premium and Face Amount Table 5 - Trend: Total Claims Operations Expense as a Percent of Adjusted Line of Business Expense .........................................................................................102 Table 6 - Trend: Claims Operations Expense per $1,000 Total Annual Premium ...................103 Table 7 - Trend: Claims Operations Expense per $ Million Inforce Face Amount ..................103 Section C. Claims Inforce Policy, Transaction and Quality Review Metrics Table 8 - Average Claims Transactions by Type of Transaction Table 9 - Claims Transactions as a Percent ot Total Claims Transactions Table 10 - Claims Inforce Policy and Transaction Metrics Table 11 - Trend: Total Claims Operations Expense per Inforce Policy ....................................103 Table 12 - Trend: Death Claims Unit Cost .................................................................................104 Table 13 - Trend: Disability Waiver Unit Cost...........................................................................104 Table 14 - Trend: Total Claims Unit Cost Table 15 - Trend: Total Claims Activity per 1,000 Inforce Policies...........................................104 Table 16 - Claims Quality Review Section D. Claims Transaction Origination, Time Service and Requirements Table 17 - Death Claims Transaction Origination and Time Service Table 18 - Trend: Death Claim Time Service .............................................................................105 Table 19 - Disability Waiver Transaction Origination and Time Service Table 20 - Trend: Disability Waiver Time Service.....................................................................105 Table 21 - Total Claim Transaction Origination



Part VII. Claims....................................................................................................PAGE Section E. Claims Practices Table 22 - Contestable and Fraudulent Death Claim Data Table 23 - Claims Investigated by Special Investigation Unit Table 24 - Death Claims - Additional Services Offered Table 25 - Death Claims Processing - Proof of Death

Part VIII. Disbursements Section A. Disbursements Staff and Operations Expense Metrics Table 1 - Average Disbursements Staff and Operations Expense Table 2 - Disbursement Staff Metrics .......................................................................................105 Section B. Disbursements Adjusted Line of Business Expense, Premium and Face Amount Metrics Table 3 - Disbursement Operations Expense per Adjusted Line of Business Expense, Premium and Face Amount Table 4 - Trend: Disbursement Operations Expense as a Percent of Adjusted Line of Business Expense .........................................................................................106 Table 5 - Trend: Disbursement Operations Expense per $1,000 Total Annual Premium ........107 Table 6 - Trend: Disbursement Operations Expense per $ Million Inforce Face Amount .......107

Section C. Disbursements Inforce Policy, Transaction and Quality Review Metrics

Table 7 - Average Disbursement Transactions by Type of Transaction Table 8 - Disbursement Transactions as a Percent of Total Disbursement Transactions Table 9 - Disbursement Inforce Policy, Transaction and Quality Review Metrics Table 10 - Trend: Disbursement Operations Expense per Inforce Policy...................................107 Table 11 - Trend: Disbursement Unit Cost .................................................................................108 Table 12 - Trend: Disbursement Activity per 1,000 Inforce Policies .........................................108 Section D. Disbursements Transaction Origination, Time Service and Requirements Table 13 - Maximum Disbursements Allowed Without Signature by Type Table 14 - Dividend Withdrawal Transaction Origination and Time Service Table 15 - Trend: Dividend Withdrawals Time Service .............................................................108 Table 16 - Loan Transaction Origination and Time Service Table 17 - Trend: Loan Time Service .........................................................................................109 Table 18 - Matured Endowment Transaction Origination and Time Service Table 19 - Trend: Matured Endowment Time Service................................................................109



Part VIII. Disbursements ......................................................................................PAGE Table 20 - Surrender Transaction Origination and Time Service Table 21 - Trend: Surrender Time Service..................................................................................109 Table 22 - Other Disbursement Transaction Origination and Time Service Table 23 - Trend: Other Disbursement Time Service .................................................................109 Table 24 - Total Disbursement Transaction Origination Table 25 - Disbursement Transaction Requirements and Capabilities

Part IX. Call Center Section A. Call Center Staff and Operations Expense Metrics Table 1 - Average Call Center Staff and Operations Expense Table 2 - Call Center Staff Metrics Table 3 - Call Center Operations Expense as a Percent of Total Call Center Operations Expense Section B. Call Center Adjusted Line of Business Expense, Premium and Face Amount Metrics Table 4 - Call Center Operations Expense per Adjusted Line of Business Expense, Premium and Face Amount Table 5 - Trend: Call Center Operations Expense as a Percent of Adjusted Line of Business Expense..............................................................................................111 Table 6 - Trend: Call Center Operations Expense per $1,000 Total Annual Premium ............111 Table 7 - Trend: Call Center Operations Expense per $ Million Inforce Face Amount ...........111 Section C. Call Center Inforce Policy, Transaction and Quality Review Metrics Table 8 - Average Call Center Calls Table 9 - Call Center Calls as a Percent of Total Calls Table 10 - Trend: Percent of Calls Answered by Customer Service Representative..................112 Table 11 - Trend: Percent of Calls Handled Entirely by Interactive Voice Representative .......112 Table 12 - Call Center Inforce Policy and Quality Review Metrics Table 13 - Trend: Call Center Cost per Inforce Policy ...............................................................112 Table 14 - Trend: Call Activity per 1,000 Inforce Policies.........................................................113 Table 15 - Call Center Transaction Metrics Table 16 - Trend: Customer Service Representative Cost per Customer Service Representative Call .......................................................113 Table 17 - Trend: Customer Service Representative Cost per Customer Service Representative Minute ..................................................113 Table 18 - Trend: Call Center Operations Expense per Customer Service Representative Call .......................................................113 Table 19 - Trend: Call Center Operations Expense per Customer Service Representative Minute ..................................................114



Part IX. Call Center............................................................................................PAGE Table 20 - Trend: Call Center Operations Expense per Call.......................................................114 Table 21 - Trend: Call Center Operations Expense per Minute..................................................114 Section D. Customer Service Representatives Table 22 - Customer Service Representative Product Service Qualities Table 23 - Call Center Language Capabilities Table 24 - Customer Service Representative Product/Service Capability Statistics Table 25 - Trend: Customer Service Representative Turnover Rate ..........................................115 Table 26 - Trend: Customer Service Representative Training in Hours.....................................115 Table 27 - Trend: Customer Service Representative Tenure in Months.....................................115 Table 28 - Customer Service Representative Service Level Statistics Table 29 - Trend: Speed of Answer (Seconds) ...........................................................................116 Table 30 - Trend: Abandoned Call Rate .....................................................................................117 Table 31 - Trend: Average Handle Time ....................................................................................117 Section E. Physical/Technical Environment Table 32 - Call Center Physical/Technical Environment Qualities Table 33 - Customer Service Representative Call Volume Related Statistics Table 34 - Trend: Percent Customer Service Representative Calls Once & Done .....................117 Table 35 - Trend: Percent of Calls Referred ...............................................................................117 Table 36 - Trend: Percent of Calls Requiring Forms Sent ..........................................................117 Table 37 - Call Center Available Hours of Operation Table 38 - Call Center Percentage of Volume Answered by Day of Week Table 39 - Call Center Transactional Data

Part X. Remittance

Section A. Remittance Staff and Operations Expense Metrics Table 1 - Average Remittance Staff and Operations Expense Table 2 - Remittance Staff Metrics and Outsourcing Table 3 - Remittance Operations Expense as a Percent of Total by Payment Type Section B. Remittance Adjusted Line of Business Expense, Premium and Face Amount Metrics Table 4 - Remittance Operations Expense per Adjusted Line of Business Expense, Premium and Face Amount Table 5 - Trend: Remittance Operations Expense as a Percent of Adjusted Line of Business Expense..............................................................................................119 Table 6 - Trend: Remittance Operations Expense per $1,000 Total Annual Premium ............119 Table 7 - Trend: Remittance Operations Expense per $ Million Inforce Face Amount ...........119



Part X. Remittance ...........................................................................................PAGE Section C. Remittance Inforce Policy, Transaction and Quality Review Metrics Table 8 - Average Remittance Transactions by Type of Payment Table 9 - Remittance Transactions as a Percent of Total Remittance Transactions .................120 Table 10 - Remittance Inforce Policy and Quality Review Metrics Table 11 - Trend: Remittance Operations Expense per Inforce Policy.......................................120 Table 12 - Trend: Remittance Activity per 1,000 Inforce Policies .............................................120 Table 13 - Remittance Unit Cost by Type of Payment ...............................................................120 Table 14 - Trend: Remittance Processing Unit Cost...................................................................121 Table 15 - Exception Processing as a Percent of Remittance Operations Expense

Part XI. e-Service

Section A. e-Service Table 1 - e-Service Customer Initiated Activities Table 2 - e-Service Distribution Channel Activities Table 3 - e-Service Applying for Insurance Online Table 4 - Incentive for Internet Use and Service Level Table 5 - e-Service Quality Review

Part XII. General & Technology

Section A. General Organizational Practices Table 1 - Structure of Life Organization Table 2 - Servicing of Life and Annuity Table 3 - Average Number of Processing Sites Table 4 - Structure of Company Ownership Table 5 - Differentiated Services - New Business, Administration, Call Center, and Remittance Section B. Outsourcing Practices Table 6 - Outsourcing Plans Table 7 - Percentage of New Business Outsourcing Table 8 - Percentage of Policy Administration Outsourcing Table 9 - Percentage of Policy Statements Outsourcing Table 10 - Percentage of Policy Change Outsourcing Table 11 - Percentage of Claims Outsourcing Table 12 - Percentage of Disbursements Outsourcing Table 13 - Percentage of Call Center Outsourcing Table 14 - Percentage of Remittance Outsourcing Table 15 - Annual Turnover Rates for 2003



Part XII. General & Technology ........................................................................PAGE Table 16 - Span of Control by Business Function Table 17 - Percent Management by Business Function Section C. Use of Technologies by Business Function Table 18 - Use of Technologies in New Business Table 19 - Use of Existing Technologies in Customer Service Table 20 - Use of Existing Technologies in Product Development and Marketing Table 21 - Use of Existing Technologies in Distribution Section D. IT Expense Metrics Table 22 - Average New Business IT Expense Table 23 - Trend: Average New Business Application Development IT Expense.....................122 Table 24 - Trend: Average New Business Infrastructure IT Expense ........................................122 Table 25 - Trend: Average New Business Total IT Expense......................................................122 Table 26 - Average Customer Service IT Expense Table 27 - Trend: Average Customer Service Application Development IT Expense...............123 Table 28 - Trend: Average Customer Service Infrastructure IT Expense...................................123 Table 29 - Trend: Average Customer Service Total IT Expense................................................123 Table 30 - Average Product Support IT Expense Table 31 - Average Distribution IT Expense Table 32 - Average Other Business Support IT Expense Table 33 - Average Total IT Expense Table 34 - Trend: Average Application Development IT Expense ............................................123 Table 35 - Trend: Average Infrastructure IT Expense ................................................................124 Table 36 - Trend: Average Grand Total IT Expense ..................................................................124 Table 37 - New Business IT Metrics Table 38 - Customer Service IT Metrics Table 39 - Product Support IT Metrics Table 40 - Distribution IT Metrics Table 41 - Other Business Support IT Metrics Table 42 - Application IT Expense by Function as a Percent of Total Application IT Table 43 - Infrastructure Expense by Function as a Percent of Total Infrastructure Table 44 - Total IT Expense by Function as a Percent of Total IT Expense

V. END NOTES


V. END NOTES

In the introduction to this report, it was noted that the survey scope and data requirements were developed in a series of sessions with TCi managing and facilitating the development process. This process has proven to be an effective way to conduct survey analysis. Accordingly, a consortium was formed by the participants in this survey to continue the survey of Life Operations Expenses on an on-going basis.

The primary authors of this report are Darleen McNamara, Consultant, Michele B. Kata, Research Analyst and Kristen C. Howard, Senior Research Consultant of TCi Consulting & Research. Also contributing were Jack W. Tyniec, Managing Director, Anthony Caramanica, Emeritus Director of Research, Peter Bartholomew, Associate Director of Research, and Bonnie Reagan, Principal of TCi Consulting & Research. TCi is an independent leader in consulting and research to providers of life and annuities and is headquartered in Cresskill, New Jersey. TCi would like to thank all of the individuals who took time out from their busy schedules to participate in the development of this survey. In all, some twenty individuals attended one or more of these sessions to help make the process a success. Special thanks go to Stephanie Frawley, Corporate Vice President of New York Life for hosting the sessions. TCi also wishes to acknowledge the significant contributions of the following representatives and companies: • Scott Brown, Staff Financial Analyst, Allstate Financial • Darryl Caney, Director – Life Services, AXA Financial • Marti Schochenmaier, Operations Director, ING • Tom Hruska, Assistant Vice President, Jackson National Life • Susan Stetkis, Manager, Service Reporting, John Hancock

Financial • Larry Baum, Director, Benchmarking Unit, MetLife • Neil van Aartrijk, Senior Benchmarking Consultant, MetLife • Stephanie Frawley, Corporate Vice President - Individual

Policy Services, New York Life • Laura Gippert, Assistant Vice President - Finance,

New York Life • So Keung Lau, Director - Finance, New York Life

About the Consortium

Acknowledgments

V. END NOTES


• Stacie Purcell, Manager, Financial Planning & Analysis, Prudential Financial • Paul Wynne, Finance Officer, Sun Life Financial • Mary Schorr, Senior Manager – Finance, Sun Life Financial

As required by the Code of Standards of the Council of American Survey Research Organizations, we will maintain the anonymity of our respondents. No information can be released that in any way might reveal the identity of a respondent. Also, authorization from TCi is required for any publication of the research findings or their implications.

This report is distributed to consortium member companies who participated in the survey. The price for purchasing the report is $2,995 for consulting firms, and a 50 percent discount, or $1,495 for insurance companies. Further information and additional copies may be obtained from TCi Consulting & Research by calling (773) 342-2771.

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