ABIA Annual Conference October 8-10, 2003

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  • Let us start by giving a brief background of how and why banks and insurance agencies have been working together to become successful partners. The Financial Modernization Act, also known as the Gramm-Leach-Bliley Act, opened the door wider for banks to offer more financial services. This law enabled companies in the banking, insurance and securities industries to affiliate under one holding company but stipulated that banking transactions and the sale of insurance and securities be physically separated. This legislation paved the way for banks and insurance agencies to establishing joint ventures and partnerships. There are many reasons why these partnerships are successful - bank and agency views of selling insurance in a bank environment are similar - they bring complementary assets to insurance marketing - selling insurance through the bank platform is a meaningful fee income generator which motivates and drives the bank/agency partnership
  • ABIA Annual Conference October 8-10, 2003

    1. 1. ABIA Annual Conference October 8-10, 2003 <ul><ul><li>Fee Income Optimism through Integrated Marketing Programs </li></ul></ul>Presented By: Nasim Ali, Executive Vice President Marketing & Sales, SBLI USA Gene Schaefer, Senior Vice President, New York Community Bank Jim Potter, Director of Insurance, GreenPoint Bank
    2. 2. SBLI was established in 1934 by Justice Louis D. Brandeis NYCB has been selling life insurance products since 1936 GreenPoint Bank has been selling life insurance products since 1955 History
    3. 3. SBLI was born out of a need for low-cost life insurance for middle- to low-income households Savings Banks were seen as a viable alternative to insurance companies. History
    4. 4. Platform Sales Gene Schaefer, New York Community Bank
    5. 5. NYCB was the 18th bank in New York to open an SBLI Department. NYCB is a $12.4 billion thrift, with 108 offices in New York & New Jersey and is the sixth largest bank in the nation based on its market cap. ($4.1 billion as of June 30, 2003) The Bank currently employs: - 300 Insurance Licensed Representatives - 120 Dedicated Reps (Series 6) - 40 Investment Specialists (Series 7) Success Story on the Platform
    6. 6. Third Party Products Include: - Life Insurance - Accident & Health Insurance - Annuities (Fixed & Variable) - Mutual Funds - Accidental Death A Success Story on the Platform
    7. 7. Key Points for Success - CSR model vs. Dedicated Agent Model - Bank Senior Management Commitment - Integrated Marketing Program - Insurance Company Support - Wholesaling to CSR - Training - Having the right partner
    8. 8. A One Stop Shop - A Financial Supermarket - 25 to 30% of non-deposit fee income can come from financial services A Success Story on the Platform
    9. 9. - Executive Buy-In/Accountability - Team Leading & Coaching - Compensation - Incentives - Referral Program - Goals and Tracking Keys To Success: Services
    10. 10. - Who are your customers? - What products should you offer? - What Strategic Partner to have? - Who should staff your branches? - Should you offer Annuities? Before You Sell You Should Know: Services
    11. 11. MYTH : Selling Insurance, Annuities and Mutual Funds may hurt deposit growth or cause disintermediation. FACT : Selling financial products builds brand awareness and established the bank as a financial resource center.
    12. 12. - Platform, Dedicated, or Hybrid - Set-up costs - Training & Advice - Licensing Issues - Sharing the risks - Administrative burdens: customer service, policy issuance, claims admin Buy, Build or Rent a Sales Force
    13. 13. <ul><li>Insurance Management reports through Retail Banking </li></ul><ul><li>License all CSRs and Branch Managers </li></ul><ul><li>Branch Managers report to District Managers </li></ul><ul><li>Establish Premium Goals for each Branch Manager </li></ul><ul><li>Introduce incentive compensation </li></ul><ul><li>Reward and recognition program </li></ul><ul><li>Minimum monthly goal per licensed CSR </li></ul>Key Points
    14. 14. Direct Marketing & Telemarketing Jim Potter, GreenPoint Bank
    15. 15. GreenPoint Insurance <ul><li>GreenPoint Bank </li></ul><ul><li>GreenPoint Mortgage </li></ul><ul><li>GreenPoint Credit </li></ul>
    16. 16. Why Utilize Direct Marketing? <ul><li>Provides incremental revenue </li></ul><ul><li>Expands “insurance” brand awareness </li></ul><ul><li>Provides ability to target “hard to reach” customers </li></ul><ul><li>Allows targeted “life event” marketing </li></ul>
    17. 17. Forms of Direct Marketing <ul><li>Solo targeted solicitation </li></ul><ul><li>Product Insert </li></ul><ul><li>Telemarketing </li></ul><ul><li>Lead generator </li></ul><ul><li>Internet </li></ul><ul><li>Statement Messaging </li></ul><ul><li>Statement Solicitation </li></ul>
    18. 18. Strategies for Success <ul><li>Align programs with distribution channels and customer demographics </li></ul><ul><li>Offer a variety of products </li></ul><ul><li>Access the carrier’s knowledge of what works and what doesn’t </li></ul><ul><li>Utilize “life event” marketing </li></ul><ul><li>Utilize “hot list” marketing techniques </li></ul>
    19. 19. Strategies for Success <ul><li>Track who buys – develop models for future campaigns </li></ul><ul><li>Develop contact management database </li></ul>
    20. 20. Paving the way to Profitable Partnerships Nasim Ali, SBLI USA
    21. 21. Life Insurance Industry Facts: Uninsured Americans <ul><li>31% of U.S. households have no life insurance protection. </li></ul><ul><li>Over 40% of all Americans (104 million people) have no life insurance coverage. </li></ul><ul><li>The basic life insurance need is estimated to be $5 trillion. </li></ul>Source: LIMRA, LOMA, ACLI
    22. 22. Life Insurance Industry Facts: Uninsured Americans <ul><li>The percent of households that do not have any type of life insurance has been increasing </li></ul><ul><li>The percent of people who do not own life insurance has been increasing also </li></ul>Source: LIMRA
    23. 23. Life Insurance Industry Facts: UNDER-insured Americans <ul><li>80% of Americans who are insured are dramatically UNDER-insured.* </li></ul><ul><li>Households with life insurance coverage have far less coverage than they need. The median amount for all adults estimated at just over $30,000. </li></ul>* “…$250,000 [is the] minimum per household average many [life] insurance consultants recommend.’ See Stephen Advokat, “The Facts of Life.”
    24. 24. Target Audience <ul><ul><li>Consumers </li></ul></ul><ul><ul><ul><li><$80K HH Income </li></ul></ul></ul><ul><ul><ul><li>(Low to moderate income segment earning $75,000 or less HH income comprises 77.4%* of the U.S. households .) </li></ul></ul></ul><ul><ul><ul><ul><li>Women </li></ul></ul></ul></ul><ul><ul><ul><ul><li>African American </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Hispanic </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Asian </li></ul></ul></ul></ul><ul><ul><ul><ul><li>South Asian </li></ul></ul></ul></ul><ul><ul><ul><li>Those with no life insurance or who are underinsured </li></ul></ul></ul><ul><ul><ul><li>Heads of family or households </li></ul></ul></ul><ul><ul><ul><li>The underserved and neglected </li></ul></ul></ul><ul><ul><ul><li>“ The people who make America work.” </li></ul></ul></ul>Source: 2000 US Census
    25. 25. Paving the Way to Profits <ul><ul><li>Profitable partnerships </li></ul></ul><ul><ul><li>The Financial Modernization Act - Gramm-Leach-Bliley has paved the way for marketing insurance products/services through partnerships with banks and agencies </li></ul></ul><ul><ul><li>We now have a path leading us directly to the customer. </li></ul></ul><ul><ul><li>THERE IS AN OPEN MARKET TO PENETRATE </li></ul></ul><ul><ul><li>+ </li></ul></ul><ul><ul><li>THERE IS A VEHICLE WITH WHICH TO DO IT </li></ul></ul>
    26. 26. Banks Can Fill the Void <ul><li>Banks are trusted by consumers </li></ul><ul><li>Banks are the Brick and Morter </li></ul><ul><li>Banks already posses the infrastructure to distribute financial services products </li></ul>Banks are well positioned to capitalize on this open area in the market
    27. 27. <ul><ul><li>Multi-channel Distribution </li></ul></ul><ul><ul><ul><li>Bank Platform </li></ul></ul></ul><ul><ul><ul><li>Direct Mail </li></ul></ul></ul><ul><ul><ul><li>Telemarketing </li></ul></ul></ul><ul><ul><ul><li>Internet </li></ul></ul></ul><ul><ul><ul><li>Branding / Advertising </li></ul></ul></ul>SBLI USA Integrated Marketing Plan
    28. 28. <ul><ul><li>Simple Products that are Easy to Purchase </li></ul></ul><ul><ul><li>Tailored and positioned for each specific distribution channel </li></ul></ul><ul><ul><li>Internet: </li></ul></ul><ul><ul><ul><li>Thank You AD&D / SeniorLife </li></ul></ul></ul><ul><ul><ul><li>Lead Generation for Term & Whole Life </li></ul></ul></ul><ul><ul><li>Direct Marketing - Mail or Telemarketing: </li></ul></ul><ul><ul><ul><li>Simple Issue Term / Thank You Customer Advantage Term / Employee Group Life / Group Mortgage / SeniorLife / Thank You AD&D / SBLI USA Saver’s Club </li></ul></ul></ul><ul><ul><li>Face-to-Face: </li></ul></ul><ul><ul><ul><li>Whole Life / Underwritten Term </li></ul></ul></ul><ul><ul><ul><li>Simple Issue Term / SeniorLife / Juvenile Term </li></ul></ul></ul>Integrated Marketing Plan
    29. 29. Things to Consider <ul><li>When Comparing Life Insurance Companies Consider: </li></ul><ul><li>Value & Affordability </li></ul><ul><li>Quality Products </li></ul><ul><li>Products that are easy to buy and simple to understand. </li></ul>
    30. 30. Consider: Customer Service <ul><li>Remember the importance of: </li></ul><ul><li>Access - a company must make use of new technologies to reach the customer. </li></ul><ul><li>Personal touch - friendly, knowledgeable service is key. </li></ul><ul><li>Ease - convenient hours of service; fast and reliable service. </li></ul>
    31. 31. Consider: Banking Experience <ul><li>Questions to ask: </li></ul><ul><li>Is your life insurance company actively seeking partnerships? </li></ul><ul><li>Does the life insurance company understand the bank culture? </li></ul><ul><li>Do they provide training and customer support programs for bank-licensed agents? </li></ul>
    32. 32. Require: Compliance and Due Diligence <ul><li>Remember the importance of: </li></ul><ul><li>A company’s regulatory history </li></ul><ul><ul><li>assess compliance record </li></ul></ul><ul><ul><li>review “Blue Book” </li></ul></ul><ul><li>Due Diligence, while providing valuable services to the customer, offers many advantages </li></ul><ul><ul><li>increased customer retention </li></ul></ul><ul><ul><li>cross-selling opportunities </li></ul></ul>
    33. 33. A Successful Relationship Q&A

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