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  • 1. Burton-Taylor INTERNATIONAL CONSULTING LLC Product Segmentation Sample Lower-tier Variable Annuity and Life Insurance Illustration Software Product The slides presented here are extracts from larger presentations, consequently some will appear out of context. They are presented only as indicative samples of Burton-Taylor Market Intelligence, Strategic Planning or Revenue Generation activity. The data shown may not be representative and should not be used in decision making.Knowledge Inspires SM © 2007 Burton-Taylor International Consulting LLC
  • 2. Variable Annuity Premiums Grew 17% in 2006 Broker-Dealers and wirehouses drove VA sales increase, even with limited or poor illustration capability. Most fixed annuity distributors saw growth, but banks held the sector back. Annuity Distribution Channels & Growth – US - $236.20 billion pa $160.6b $75.6b 100% 100% Banks + 15-20% Other Wirehouses Before & + 1-5% 80% Wirehouses 80% defining your Regionals & product Regionalssegmentation Broker-opportunities, + 1-5% Dealers B-T’s Add: Advanced 60% + 20-25% 60% decision dataTM helps Broker- Dealers + 17% Banks - 10-15% - 5%your companyrecognize the expanding 40% 40% segments ofyour market... Captive + 1-5% Agents 20% Captive 20% + 5-10% Agents IMOs & Independent + 1-5% Agents …as well as those which 0% 0% are constricting growth. Variable Annuity Fixed Annuity US$ Page 2 Knowledge Inspires SM Burton-Taylor INTERNATIONAL CONSULTING LLC Add: Advanced decision dataTM market analysis Burton-Taylor International Consulting LLC © 2007 Burton-Taylor International Consulting LLC
  • 3. Broker-Dealers Earn Over $10b Revenue Annually Annuities and insurance sales account for 35% of US Broker-Dealer annual commissions. Improved illustration capabilities directly translate to improved revenue and closing rates for Broker-Dealers. Broker-Dealer Revenue & Market Share – US - $10.44 billion pa $2.83b $2.82b $2.61b $1.07b $0.62b $0.49b 100% Other B-T provides Other the ability to Other NFP Securities Other Other “deep dive” Other 80% AXA Advisors ING Financial NYLife into your Linsco/Private potential market Woodbury opportunities, Mutual Service Summit ING Financial Partners MML Wach allowing your Walnut Street Securities H.D. Vest Financial Services FNI CA First Command Financial Planning Wachovia Securities Financial INVEST Financial CF 60% SII Investments Park product and NYLife Securities Financial Network Investment FSC Securities Northwestern SA AIG BYA FSC Securitiesstrategy teams AIG Financial Advisors Cambridge Investment Research Commonwealth Financial Network Mutual Royal All Choice Financial Network Investment Investors C to clearly AXA Advisors AIG Financial Advisors InterSecurities NFG FSC Securities NYLife Securities Great American LaSalle St. MH isolate Mutual Service Wach Commonwealth Financial Network National Planning UPFS potential Securities America Woodbury Financial Services First H.D. Vest Financial Services M Holdings products and Commonwealth Financial Network Securities America Allied IF 40% Princor Financial Services customers… Royal Alliance Associates AIG Financial Advisors Sigma Royal Alliance Associates ING Financial Partners Financial Network Investment AXA Advisors LPL MIS MML Investors Services MML Investors Services Raymond James Financial Services Royal Alliance Associates FA Securities America Raymond James Financial Services First Command SSN 20% Northwestern Mutual Investment AXA Advisors RJ RJ Raymond James Financial Services Linsco/Private Ledger Linsco/Private Ledger NFP Linsco/Private Ledger SFS 0% 20% 40% 60% 80% 100% Mutual Funds Fees Annuities Securities US$ Insurance Alternative Add: Advanced decision dataTM market analysis Burton-Taylor International Consulting LLC Page 3 Knowledge Inspires SM Burton-Taylor INTERNATIONAL CONSULTING LLC © 2007 Burton-Taylor International Consulting LLC
  • 4. Ten Broker-Dealers Account for 50% of VA Revenue Two-thirds of total US Broker-Dealer annuity & insurance commission revenue is generated from variable annuities, and 25% of that is generated by only 3 firms. These 3 firms currently have no custom illustration capability. …and recognize Broker-Dealer Revenue & Market Share – Annuity & Insurance – US - $3.68 billion pa where new product segmentation $2.49b $1.06b $0.12b will lead to 100% $0.01b new opportunities for your clients Other Other O and new revenue for Other your firm. 80% Mutual Service NYLife Securities Cen AIG Lincoln Investment Walnut Street Securities Linsco/Private Ledger Sum Park Avenue Securities ING HD Vest Financial Network Investment Woodbury Financial Services FC ICA CF Investacorp MML Investors Services MFS 60% NFP LPL SII Investments Commonwealth Financial Network Northwestern Mutual Investment Svcs FSC Securities HDV InterSecurities Commonwealth NYLife Securities Great American Advisors National Planning INV Woodbury Financial Services Securities America M Holdings Securities First Command 40% AIG Financial Advisors LPL ING Financial Partners MML Investors Services AXA Advisors FNI Royal Alliance Associates Raymond James Financial Services FNI First Command Financial Planning 20% AXA Advisors RJ Mutual Service NFP Securities Linsco/Private Ledger 0% 20% 40% 60% 80% 100% Variable Annuity Life & DI FA US$ LTC Add: Advanced decision dataTM market analysis Burton-Taylor International Consulting LLC Page 4 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC © 2007 Burton-Taylor International Consulting LLC
  • 5. US Broker-Dealers Employ Over 37,500 FA’s Linsco/Private Ledger’s top 250 producers are twice as productive as those of North-Western Mutual and MML Investment Services. Improved illustration capabilities can improve productivity at less profitable firms. Understanding how your proposed solutions will Broker-Dealers Selling Annuities & Insurance – Top 13 - US help your clients succeed… 7,000 $700,000 Average Annual Production of Top 250 Financial Advisors 6,000 $600,000 5,000 $500,000 Number of Financial Advisors 4,000 $400,000 3,000 $300,000 2,000 $200,000 1,000 $100,000 0 $0 Linsco/ Raymond AXA North- Royal Securities MML Common- NFP Financial AIG FSC First Private James Advisors Western Alliance America Inv Svcs wealth Securities Network Financial Securities Command Ledger Mutual Financial Inv Advisors Financial Inv Svcs sell annuities don’t sell annuities Top 250 average production US$ Add: Advanced decision dataTM market analysis Burton-Taylor International Consulting LLC Page 5 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC © 2007 Burton-Taylor International Consulting LLC
  • 6. Major US Wirehouses Employ Over 84,000 FA’s Trust levels are dropping across the industry, as a whole. Illustration capabilities bring transparency and understanding to an opaque market, and help to raise levels of trust. …as well as understanding Financial Advisors Selling Annuities – Big 5 Wirehouse & 8 Major Regionals - US how your client’s clients will benefit 18,000 raises the credibility of your product segmentation 16,000 strategy and 5.0 confirms for you that the 14,000 opportunities are valid. Number of Financial Advisors 12,000 4.0 Level of Trust, 1-5 10,000 3.0 8,000 6,000 2.0 4,000 1.0 2,000 0 0 Merrill Smith MS Wachovia UBS AG Edward HR Hilliard JMS Raymond RBC Dain Stifel Lynch Barney Dean Edwards Jones Block Lyons James Rauscher Nicolaus Witter sell annuities don’t sell annuities trust TM Add: Advanced decision data market analysis Burton-Taylor International Consulting LLC Page 6 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC © 2007 Burton-Taylor International Consulting LLC
  • 7. Premiums Will Track a 6.2% CAGR Through 2009 IT spend, as a percent of premiums, is shifting from accident and health to annuities. Life spend is growing. Both offer prime opportunity for new revenue generated by a lower-tier alternative for the mass-market representative. After using B-T’s Add: Advanced Life/Health Premiums by Line - $518 billion pa – Information Technology Spend by Line - US decision dataTM to clearly $600b measure, target and Annual IT Spend by Product Line, as a Percent of Premiums confirmopportunities to segment $500b product lines… Accident and Health Annual Premiums by Product Line 5.0% $400b Life 4.0% $300b 3.0% Annuities $200b 2.0% $100b 1.0% $0 0.0% 2003 2004 2005 annuities life accident and health US$ Add: Advanced decision dataTM market analysis Burton-Taylor International Consulting LLC Page 7 Knowledge Inspires SM Burton-Taylor INTERNATIONAL CONSULTING LLC © 2007 Burton-Taylor International Consulting LLC
  • 8. Lower-tier Product Expands Addressable Market Illustration spend, in the annuity space, will grow from $53m to $68m over the next 3 years, raising the opportunity for a lower-tier (hosted) illustration solution and expanding the addressable market 95%. Illustration Software Spend & Revenue Growth – Mass-market Illustration Product - US $80m A mass-market illustration product will drive revenue from existing markets, $70m and create new ones where illustration wasn’t affordable in the past. Information Technology Illustration Spend Annuity $60m Illustration Spend A mass-market illustration product will Annuity Illustration expand the illustration addressable $50m Spend market by $26m at release, and grow it to $54m by 2009. Annuity Addressable $40m Illustration Market A mass-market illustration product will Spend gain a 38% share of the US annuity Addressable illustration spend and a 5% share of the $30m Market distribution desktops over the next 3 years. $20m Addressable Mass-market Market Illustration Product …Burton-Taylor (Carrier) helps your company $10m Mass-market clearly define your Illustration Product most profitable (Carrier) product $0 Mass-market Illustration Product (Distribution) segmentation and 2007 2008 2009 quantify your return. Assumes technology spend matches market growth of 6.2% CAGR Assumes Illustration spend matches current rate of 0.52% of technology spend US$ Add: Advanced decision dataTM market analysis Burton-Taylor International Consulting LLC Page 8 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC © 2007 Burton-Taylor International Consulting LLC
  • 9. Burton-Taylor International Consulting LLC Other available Burton-Taylor reports: ► Bloomberg v Reuters News - Analysis of Fixed Income Services, April 2010 • Burton-Taylor delivers the first ever fixed income comparative analysis of the two largest financial news services. The report is sufficiently detailed as to allow fixed income news users and market participants to make better informed, more confident and more appropriate purchase decisions, and to allow news providers to make more competitive product requirement and specification decisions, which could result in greater profitability for both. The report includes qualitative and extensive quantitative comparison of international, regional and local fixed income content, coverage depth and coverage breadth by fixed income instrument type between Bloomberg News and Reuters News. Download Sample Slides and the Information Kit ► China Financial Market Data/Analysis Market Share & User Requirements 2010 - Key Competitors, Detailed User Needs - Portfolio Managers, Researchers, Sales & Traders • The mainland China financial information market has grown at a 29.5% CAGR since 2003, yet remains opaque. Burton-Taylor reveals the mainland China market data vendor share, as well as detailed user needs analysis and satisfaction ratings for Portfolio Managers, Researchers and Sales & Traders. This comprehensive report will allow market data/analysis providers, users or industry analysts to clearly understand 2010 competitive positioning in mainland China. The analysis also enables market participants to quickly determine the most important content/capabilities to serve the China market and to measure levels of satisfaction for the economic data, equity data, company & fundamental data, news and capabilities currently being delivered to the Portfolio Managers, Researchers and Sales & Traders in the country. Download Sample Slides and the Information Kit ► Financial Market Data/Analysis Global Share & Segment Sizing 2010 - Key Competitors 2005-9, Segment Sizing 2007-9 • Burton-Taylor delivers a comprehensive analysis of market data supplier share, user segmentation and vendor demographics. The analysis is sufficiently detailed as to allow market data/analysis providers or industry analysts to clearly understand competitive positioning currently, historically, globally, regionally and within individual user segments, and to enable market data/analysis users to make better informed, more confident and more appropriate purchase decisions. Download Sample Slides and the Information Kit Page 31 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC Confidential – Do Not Reproduce © 2010 Burton-Taylor International Consulting LLC
  • 10. Burton-Taylor International Consulting LLC Other available Burton-Taylor reports (continued): ► Bloomberg v Reuters News - Analysis of International Services, April 2009 • Burton-Taylor delivers the first ever comparative analysis of the two largest financial news services. The report is sufficiently detailed as to allow global market participants to make better informed, more confident and more appropriate purchase decisions, and to allow news providers to make more competitive product requirement and specification decisions, which could result in greater profitability for both. The 80 page report includes qualitative and extensive quantitative analysis of international and regional content, daily and hourly volume, 3rd party redistribution, coverage breadth, coverage depth and commentary comparison between Bloomberg News and Reuters News. Download Sample Slides and the Information Kit ► Found: US$2 Billion in Hidden Demand - Global Financial Information Survey - Revenue, Sharing & Piracy Estimates, June 2009 • Burton-Taylor measured the global spend on financial information and analysis at US$23 billion, exit 2008. According to a new B-T survey of 80 executives at market data vendors and client companies, there is an additional US$8 billion in pirated usage from ID/Password sharing and from internet scraping. The industry experts estimate that roughly one-fourth of users sharing IDs/Passwords would purchase if tools were available to enable information companies to accurately and affordably target and approach them. These users represent US$2 billion in current, hidden, addressable demand that requires no new product development, no new staffing and no significant investment to secure. This Burton-Taylor report details the findings of the survey and suggests remediation action to capture the revenue. Request the Free Report (using code PIRACY2009) For a list of all available Burton-Taylor reports, please visit the Research area of Burton-Taylor.com. Page 32 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC Confidential – Do Not Reproduce © 2010 Burton-Taylor International Consulting LLC
  • 11. Burton-Taylor International Consulting LLC The following companies have purchased reports or services from Burton-Taylor International Consulting LLC: ► AdmitOne Security ► Summit Partners ► Bain & Company ► SunGard ► Baseline Management ► TheMarkets.com ► Battery Ventures ► Thomson Reuters ► Bloomberg LP ► UBS ► Boston Consulting Group (BCG) ► VantagePoint Venture Partners ► CapMan ► Xignite ► Credit-Suisse ► Dow Jones ► Over a dozen private equity, investment ► Dun & Bradstreet and consulting firms from around the world, ► First State Investment Advisors who have asked to remain anonymous ► Goldman Sachs ► Interactive Data Corporation (IDC) ► Lehman Brothers ► Lone Pine Capital ► Markit ► News Corporation ► PricewaterhouseCoopers ► Point Carbon ► Quick ► RBS ► Sanborn Consulting ► Scout Analytics Page 30 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC Confidential – Do Not Reproduce © 2010 Burton-Taylor International Consulting LLC
  • 12. Burton-Taylor International Consulting LLC Burton-Taylor’s trademarked Hourglass AnalysisTM provides a proven, structured yet customizable business consulting approach that helps companies clearly target new opportunities, define new strategy, and plan new actions to maximize growth. Find your new customers Finding new opportunities offering the Sector Research highest return and lowest underlying risk is never easy. B-T excels at enabling companies to target opportunities directly and confidently. Customer Research Shape your new strategy Charting how, when and where to BU/Company Strategy invest, to generate maximum value and capitalize on the most profitable options, is like navigating a maze. B-T helps companies map the most direct paths to significant growth Service/Product Strategy Capture your new revenue Crafting compelling messages and Sales Plans defining actions that result in shorter sales cycles can be a challenge. B-T are skilled din helping companies build plans that quickly and profitably capture new revenue. Marketing Plans Hourglass AnalysisTM Burton-Taylor International Consulting LLC Page 33 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC Confidential – Do Not Reproduce © 2010 Burton-Taylor International Consulting LLC
  • 13. Burton-Taylor International Consulting LLC B-T helps companies clearly see their target markets, their competitive environment and their opportunities. We help them see their paths of greatest reward and least resistance, and we help them define specific actions that ensure the future they see today is the one they profitably achieve tomorrow. B-T’s Hourglass AnalysisTM process provides a proven, structured yet customizable, business consulting approach that helps companies clearly target new opportunities, define new strategy, and plan new actions to maximize growth. While accomplished in the Americas, Europe and Asia, and with a strategic approach that remains generalist, B-T has developed substantial expertise in the global information, insurance, financial services and software industries, with deep focus in North America, China, India and Asia. B-T completes custom research, varying in size from small single product or market detail reports to large global industry and competitor sizing and profiles. B-T provides outsourcing, filling temporary and long-term resource gaps, or manages special projects, by providing expert management to companies who are experiencing headcount or budget constraints. To learn more about how Burton-Taylor International Consulting LLC can help your company improve performance through improved Market Intelligence, Strategic Planning and Revenue Generation activities, please call +1 646 201-4152, email: questions@burton-taylor.com or visit www.burton-taylor.com. Burton-Taylor International Consulting LLC, 1319 Thornapple Drive, Mezzanine Level, Osprey, Florida 34229-2301 +1 646 201-4152 Page 34 Knowledge Inspires SM Burton-TaylorINTERNATIONAL CONSULTING LLC Confidential – Do Not Reproduce © 2010 Burton-Taylor International Consulting LLC