Saltzman 03 17 15 ver final (3) Copy

THE FUTURE OF DISTRIBUTION

EVERY DAY MATTERS.®

BANNER. WILLIAM PENN.

SALTZMAN BD ROUNDTABLE March 19, 2015 Steve Saltzman Saltzman Associates Grant Andrew VP, New Market Development Legal & General America

ADVENTURES IN BD SELLING.

13.4 14.3 13.5 11.6 12.1 12.4 13.1 13.6 13.9 14.5 15.1

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

(Ann

ualiz

ed P

rem

ium

) Bill

ions

As Reported Forecast

Source: LIMRA 4th Quarter 2012 preliminary results ($12 Billion in Life Sales is based on LIMRA projecting 30% of the sales)

274 million life insurance policies in force! Statistics portal

Legal & General America – For internal use only. Not for use with the public.

FLAT LIFE SALES. 2

(Stockbroker, Banks/ savings, etc.)

Agency Building

34% $4,080,000,000

Banks/ Savings Institutions 1%

$120,000,000

Brokerage 38%

$4,560,000,000

Direct Response 5% $600,000,000

Home Service 1% $120,000,000

MLEA 8% $1,080,000,000

PPGA 8% $960,000,000

Stockbroker 2% 240,000,000

Worksite Marketing 2% 240,000,000


Note: $12 Billion in Life Sales is based on LIMRA projecting 30% of the sales LIMRA's Retail Individual Life Insurance Sales in the U.S., Second Quarter 2013

TOTAL LIFE SALES – $12 BILLION.

3

• Core Brokerage Agencies $4-5 Billion

• Career $5-6 Billion (PPGA, Worksite, Home Services)

• D2C Agencies $600 • BDs $1-2 Billion • P&C, Healthcare,

Other ?

2004 161,955

25%

2004 165,024

25%

2004 102,689

15%

2007 99,461 16%

2004 98,416 15%

2004 129,071

20%

149,187 24%

2007 163,409

25%

2007 162,271

25%

2007 89,121 92,963

15%

2007 123,441

19%

2010

2010 163,814

26%

2010 97,792 16%

LIMRA Census of US Sales

2010

14%

2010 120,692

20%

Independent B/D - 15%

5% Decline

Affiliated-25% (Non-registered, includes P&C)

7% Decline

Independent Agents-25%

(Non-registered) 8% Decline

Career-15% (Registered

reps / Affiliated)

9% Decline

Bank & Wire-house - 20% 6% Decline

Total Salesforce 2004: 657,155 2007: 641,545 2010: 620,606 6% Decline

5


LIMRA’s Census of US Sales Personnel and Cerulli Associates,8/30/2011

4

SALES FORCE - 35% BDs.

IMPLICATIONS.

• Flat Sales with 274M inforce policies • Life sales of $1-2B for BDs vs. $4-5B for Independent Brokerage • BDs reps number 35% vs. Independents reps number 25% • Underwriting matters- 40% preferred (see appendix for details) • Paramed matters- 41% of the cases (see appendix for details)

Legal & General America – For internal use only. Not for use with the public. 5

WOMEN. 51% of population 85% of consumer purchases 60% of wealth in US 90% of income reinvested in family

CULTURES.

SOCIAL MEDIA.

GENERATIONS.

Source:

Target 78% of US 82M Gen X 79% online 76M Gen Y 87% online, least likely to change

carriers, use advisors least

79M Boomers 56% online, 50% research online- use advisors most

157M Facebook 500M Twitter 259M LinkedIn 1B YouTube

15 M Asian 28% higher median household income. Over 50% have B.A. vs. 28% nationwide. Tech savy, most online.

51M Hispanic 39M African American 24M on internet, 49% smartphones

12-32M GLBT 320M Americans, 82% live in cities Source: Wikipedia 2012 and 2013 and LIMRA 2009, 2010, 2013 LIMRA Life Insurance Ownership Across the Generations August 2011

Source: Wikipedia 2012 and 2013 Source: THENEXTWEB.COM 2012


CONSUMER EXPECTATIONS. Automotive Autotrader.com

KBB.com • Product, price, functionality, safety ratings • Store locations, financing, etc.

Property & Casualty

eSurance.com Progressive.com

Online multicarrier quotes, online applications, mobile claims assessment, snap shot, etc

Financial Services

eTrade.com schwab.com

Online analytics, total portfolio review, goal alignment, trade execution, trending, etc.

Banking WellsFargo.com Chase.com

Online statements, scanning deposits, bill payment online, Mortgages online (online everything)

Marketing Fidelity.com ING.com eHarmony

• My green path to retirement • What’s my number and orange dollars • Making matches

Autotrader.com, kbb.com, progressive.com, etrade.com, schwab.com, wellsfargo.com, chase.com, fidelity.com, ing.com, eharmony.com, Dec 2014

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• Simple, straightforward communication that demystifies the sales process, costs, and reasons

• Marketing that is educational and easy language and messages to understand (honest, warm, and common sense)

• Focus on financial and retirement planning, tools, budget management, and how life insurance is affordable

• Listen to concerns, goals, and tailor response to audience- talk to me and not at me, and demonstrate compassion

• Highlight brand, use same age of people, lifestyle, etc and wording appropriate in ads for each market

8 Legal & General America – For internal use only. Not for use with the public.

CONSUMER EXPECTATIONS.

IMPLICATIONS. Legal & General America – For internal use only. Not for use with the public. 9

• Service choice matters - online chat, online services, access via phone, face to face

• Charge differently based service levels • Easier and quicker is what consumers

know and expect • Approach is key with consumers

Business Channel

Client Segment and Origination

Focused Life Products

Reps Education and Sales Training Requirements

Reps Preferred Submission & Fulfillment Method

Reps Preferred Support

Career agents, Out-brokerage and Ind. reps

• Super Affluent to Emerging Markets (All)

• New and Existing clients

Term, WL, UL and SUL

• CE training • More complex sales ideas

• Full paper apps with full medicals

• Paper delivery

• Concierge/ case mgmt and marketing

• Illustrative concepts

Wire Houses, Banks &CPA

• Super Affluent to Affluent

• Existing clients

Term, UL, WL, VUL, and SUL

• CE training • One pager client profiles/ sales

ideas

• Term drop ticket • Informals/ full app for

permanent • eDelivery/ epay

• Point of sale • Sales desk • Lapse notices • Cash values

Independent Broker/Dealer

• Affluent • New and Existing

clients

Term, UL, and VUL

• CE training • One pager client profiles/ sales

ideas

• Term drop ticket • Full paper/ eApp for

permanent • eDelivery/ epay

• Sales desk • Lapse notices • Cash values

Direct Marketers

• Middle Markets • New Clients

Term • Product and underwriting niches

• “How to sell” training

• STP with DM proprietary systems

• eDelivery/ epay

• Case mgmt and underwriting

• Lapse notices

P&C, Healthcare

• Emerging Markets to Middle Markets

• New and Existing Clients

Term • Basic sales education • Basic one pager client profile/

sales ideas

• Drop ticket • eDelivery/ epay

• Sales desk • Lapse notices

BGA Differentiators BGA Support Market Segments


BGA GROWTH OPPORTUNITY.

CROSS SELLING.

Suggestive Marketing Similar clients purchased?

Bundling Up-selling Something to drink?

Complete Line Marketing Head-to-foot apparel!

Upscale Marketing Shoes to match your outfit?

On-boarding Bundling Do you need?

HOW DOES IT APPLY TO LIFE INSURANCE?

• Client process reviews.

• Mortgage refinancing and term insurance.

• Right amount.

• Want to add an LTC rider?

• Cost of Living rider?

• Complete insurance product line.

• Complimentary products and riders.

• Products for retirement.

• Annuities, LTC, IUL etc.

• Client satisfaction reviews.

• Proactive on-boarding calls.

• What else does the client need?

11

Carrier

Direct To Consumer

Middle Markets New Clients

Independent Broker Dealers

Affluent Markets New / Existing Clients

P & C Healthcare

Middle / Emerging Markets New / Existing Clients

CROSS DISTRIBUTION AND SEGMENTATION.

Career Independent Distribution

Super Affluent / Emerging Markets New / Existing Clients

Wirehouses Banks CPAs

Super Affluent / Affluent Markets Existing Clients

BGAs MGAs


Carrier

BGA IMPLICATIONS. Legal & General America – For internal use only. Not for use with the public. 13

• The growth of larger BGAs that can support cross business segments and consolidation of smaller BGA offices will continue

• BGAs are positioned to cross sell with the policy holders

• IMOs are starting to create best in service class by segments, support business segmentation, and leverage expertise within memberships

• Carrier are supporting segmentation with some IMOs and BGA offices

1. P&L to the BD- income diversification (ie. life insurance sales increase when investment decreases)- though less than 1% of current BDs revenue - small today but large upside

2. Next generation - Develop a relationship with the spouses and beneficiaries to avoid an outgoing cash flow with the death of the client

3. Stickier clients - Higher client retention, avoid losing clients to other insurance companies (North Western Mutual, New York Life, Mass Mutual, etc.) and other investment companies

4. Higher client satisfaction - One non-stop shop, cradle to grave, and avoid potential fiduciary responsibility issues for both clients and FAs

5. Know your clients - Have the opportunity to learn more about your clients, goals, aspirations, better risk management, and larger portion of wallet (consolidation of assets, etc.)


WHY LIFE INSURANCE SALES MATTER TO BDS.


NOTE: Assumes the BGA’s are aware of our product and underwriting niches; fully understand how to work within the BDs (have sales desks, POS, etc.); and understand our BD value proposition

Topic / Tools

Why should you discuss insurance with your clients?

Who do your clients think is managing their goals?

What are your clients future needs and goals?

Where to focus to help your clients avoid disaster?

When and How do you discuss their goals and needs?

Step

1. Understand the importance of insurance

2. Client and advisor Education

3. Client fact finding With advisor/ POS

4. Advisor preparation/ solutions research

5. Initial and future client sales meetings - total portfolio review

Client Background Information

Why people need insurance

The advisor and client need to understand the purpose, the amount, the types, the process, and uses of insurance to meet their goals

All of your clients have similar needs, risks, and goals

Review your clients goals, portfolio, and solve their problems

Review your client's goals and solution recommendations: quarterly/ annually

Producer Sales Ideas/ Materials

Reasons to sell and buy life insurance for BDs, P&C, Healthcare, CPAs, etc.

Purpose and uses of life insurance, how much and type, and Life process (application, paramed visit, underwriting, policy delivery, payment, etc-60-90 days).

Fact finders for goals, assets, etc. To help with overall planning

Match goals with solutions that are available (sales ideas)

Review fact finders for changes in goals, plans, gaps, Review files/ data mine life events etc. And complete policy reviews Make final sales recommendation

Producer Sales Training

Talking points-Basics for initial client meeting

Client and Advisor Seminars on Life insurance-How much, types, etc.

Fact finder process Sales idea review and data mining

Portfolio (policy) reviews with client (sales process seminars)

Marketing Distribution

Website Microsite Email/ blog/avatar Mailing inserts Social media





15

FA MARKETING LIFECYCLE.


PREDICTIVE PROFILING.

Sales idea

Portfolio review/query eventually predictive

Selling script Understand goals/ needs/ benefits

Application or note for file

HOW DOES IT APPLY TO LIFE INSURANCE?

• Annuity Max • IRA Stretch • Policy/

beneficiary reviews

• Annuities? • IRAs? • Existing

policies/ trusts?

• Use cash/ payment stream to purchase Insurance

• Determine if client has life insurance, trust, estate plans?

• Client educated

• Address next generation risk

• Retain clients • Retirement/

healthcare (VUL, LTC, etc.)

• Increase client satisfaction

• Minimize future beneficiaries/ trust concerns

Suggestion accepted or rejected

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.moneychoice.org/faq/investment-portfolio/&ei=4H33VKPcIcqqgwSa24CIBA&bvm=bv.87519884,d.eXY&psig=AFQjCNE4G9N0TiU01GAo6nV_AXXUf2AakA&ust=1425592165978805

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.clipartpanda.com/categories/light-bulb-idea-clip-art&ei=Un73VO74MMPBggTI64H4CA&bvm=bv.87519884,d.eXY&psig=AFQjCNHrzRgr0ftBMEXBKIhbdX39RVvNsw&ust=1425592251545470

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.123rf.com/photo_19046176_the-words-yes-and-no-on-a-toggle-switch-lever-for-you-to-decide-or-choose-whether-you-accept-or-reje.html&ei=On_3VMeEGYaqgwToq4GYAw&bvm=bv.87519884,d.eXY&psig=AFQjCNG_OKrFWqEpn-w6MjBTNJx_IHXxjg&ust=1425592513225342

FUTURE FA/ CONSUMER SELLING PROCESS.


1. Fiduciary Responsibility

2. Risk Mgmt 3. Next Generation 4. Family/ Dependants/

Legacy

1. Annual savings 2. Retirement date 3. Inflation, return

assumptions, etc. 4. Retirement

income

1. Review plans 2. Review

assumptions 3. Discuss changes/

risks 4. Discuss insurance

1. Green, Yellow, Red-Retirement

2. Adjust plans 3. Purchase risk

mitigates like insurance

Note: Different process, comp, pricing, etc.

17

Why Buy and Sell Life

Insurance Financial Planning

Annual Financial Planning Review

Gap Analysis/ Solutions

Predictive Profiling Selling Script

Suggestion Accepted/ Rejected

Application or Note for

File

Quarterly client meetings

Annual client meetings

FUTURE END TO END SELLING PROCESS.


Marketing, Product, and Underwriting

Application Fulfillment

Compliance Review

Easy and Fast

1. Fully underwritten

2. Simplified issue

3. Predictive modeling

1. Data gatherings (records-medical, financial, lifestyle, MVR, etc.)

2. Tele-interview 3. Paramed

1.Prdictive/ Profiling

2.eSignature 3.eDelivery 4.ePay 5.eStatements

1. Face2Face 2. Tele-interview 3. Kiosk 4. Online/

Website

Note: Different process, comp, pricing, etc.

18

Manufacturer Intermediary Distribution Consumers

THE BIG PRINT. Legal & General America life insurance products are underwritten and issued by Banner Life Insurance Company, Urbana, MD and William Penn Life Insurance Company of New York, Garden City, NY. Banner products are distributed in 49 states and in DC. William Penn products are available exclusively in New York; Banner does not solicit business there. Not for public distribution. For agent/broker use only. 15-092


APPENDIX. 20

NUMBER OF POLICIES BY UW CLASS - DATA.

21

2006 2007 2008 2009 2010 Average %

Preferred Best NS 382,229 859,755

987,710 1,174,214 604,758 801,733 24.5%

Preferred Other NS 191,223 498,914

591,839

721,104 320,894 464,795 14.2%

Preferred Other SM 62,242 139,847

131,412 118,442 58,596 102,108 3.1%

Standard NS 397,592 1,283,088 1,527,812 1,650,419 872,066 1,146,195 35.0%

Standard SM 142,555 337,849

359,462

276,606 135,586 250,412 7.6%

Substandard 52,340 102,731

172,365

263,935 135,923 145,459 4.4%

Other 203,853 374,171

292,407

553,043 407,425 366,180 11.2%

Totals 1,432,034 3,596,355 4,063,006 4,757,763 2,535,247 3,276,881 100.0%


U.S. Individual Life Insurance Sales Survey Supplement Underwriting Class by Product - Aggregate Participant Results U.S. 2006-2010

UNDERWRITING BY TYPE OR PROCESS - DATA.

22

2006 2007 2008 2009 2010 2011 Average %

Guaranteed Issue 139,067 154,443 58,131

110,473 380,838 295,636 189,765 6.8%

Simplified Issue 115,837 331,198 370,377

482,669 651,133 320,831 378,674 13.5%

Non Medical 304,039 675,229 648,798

791,121 926,041 529,511 645,790 23.0%

Paramed 453,398 1,088,910 1,266,371

1,515,470 1,666,754 911,401 1,150,384 41.1%

Full Medical 77,873 154,909 127,633

118,132 170,456 116,451 127,576 4.6%

Other 71,653 274,985 294,919

530,191 549,384 138,437 309,928 11.1%

1,161,867 2,679,674 2,766,230 3,548,054 4,344,605 2,312,267 2,802,116 100.0%


Individual Life Insurance Annual Sales Supplement - Underwriting Type Results-2006-2010

Documents

Saltzman 03 17 15 ver final (3) Copy