B t product-segmentation_sample

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

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 Regionals
segmentation 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 company
recognize the
expanding
40% 40%
segments of
your market...
Captive
+ 1-5%
Agents

20% Captive 20%
+ 5-10%
Agents
IMO's &
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

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 Securities
strategy 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


Burton-Taylor
INTERNATIONAL CONSULTING LLC © 2007 Burton-Taylor International Consulting LLC

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


Burton-Taylor

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 $0
Linsco/ Raymond AXA North- Royal Securities MML Common- NFP Financial AIG FSC First
Private James Advisors Western Alliance America Inv Svcs wealth Securities Network Financial Securities Command
Ledger Mutual Financial Inv Advisors Financial
Inv Svcs sell annuities don’t sell annuities Top 250 average production
US$


Burton-Taylor

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


Burton-Taylor

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
confirm
opportunities
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$


Burton-Taylor

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$


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• Burton-Taylor delivers the first ever fixed income comparative analysis of the two largest financial news
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 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
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► 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
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