The document discusses the growing trend of online life insurance sales and argues that fraternal insurers should embrace online distribution to remain competitive. It notes that 85% of consumers now research insurance online and that the average agent age is 57, representing a disconnect with younger consumers. The document outlines Teachers Life's success in developing an online quoting, application, and purchase process that is faster, more scalable, and lower-cost than traditional methods. It proposes that Acceptiv and Teachers Life provide a turnkey solution for fraternals to launch online sales, including products, underwriting, administration and customer support.

1. Are Online Sales in Your Future?
(Hint: They Better Be)
Doug Baker
CEO, Teachers Life
Kevin Pledge FSA, FIA
CEO and Founder, Acceptiv

2. 1. The Market Today
2. Why sell online?
3. How does it work?
2
Agenda

3. A couple of notes before we start
Building a U.S. – Canada Wall…
3
It will only work in the summer…

4. And just remember…..
4
We’ve had practice climbing over things…….

5. How much personal protection life insurance (by policy
count) will be sold online 5 years from now by Fraternals?
50 – 59%
60 – 69%
70 – 79%
80 – 89%
90 – 100%
0 – 9%
10 – 19%
20 – 29%
30 – 39%
40 – 49%
5

6. Trend – Life Insurance Sold in US
6

7. Trend - Uninsured households
57% of families with children will have immediate financial
trouble if the primary wage earner died
30% of households have no life insurance
Insurance Gap - $20T in US, 1T in Canada
50% of households
believe they are
underinsured
7

8. Trend - Agents
85% of consumers research insurance online
Most consumers happy doing business online
Average age of agents now 57
- disconnect to young modern consumers
8

9. Life Insurance Industry - Barriers to Entry
Highly Regulated
Prudential oversight of insurance companies
Capital adequacy
Policyholder protection
Complex Infrastructure
Systems
Processes
Brand Reputation
LIFE INSURANCE IS SOLD NOT BOUGHT
9

10. It’s slightly different for Fraternals
Limited capital
Hostile acquisitions are not possible
Fraternals have a reason to do what we do (beyond profit)
But, we are still competing in the same market and
(most likely) for the same customers.
10

11. Why sell online?
Part 2
11

12. Willie Sutton
12
Reporter:
“Because that’s
where the money
is.”
Sutton:
“Why do you rob
banks.”

13. Teachers Life
Large players dominate the market – including the banks
Brand and Advertising can be lost, especially through
intermediaries
How can Teachers Life compete in this market?
Responsibility to members to offer best terms possible?
13

14. 14
2007 2008 2009 2010
o Member
portal
o Online product
launch
o Website
o Online Payment
o Document
Management
System
o Term 20 Online
2011
o New
Accounting
Software
System

15. 15
2012 2013 2014 2015
o New
Business
Continuity /
DR
o Expense
Point
(Mobile
Accounting
Software)
o Policy Admin
System
o New Policies &
Procedures
System
o Phone System
o New Online
Product
(T10-­30)
o New
Marketing
Website
o PCI Payment
Portal
o Continuous
Improvements to
Customer Journey
o Expanded Online (T-­10-­
40)
o New Online Portal for
Retirement Products
o New Marketing Website
and Fall Marketing
Campaign
o Provide TPA Services for
Other Insurers

16. The best thing about a small company -
it’s a small company. The worst thing…
Our Weaknesses are our Virtues
16
› Agility to respond – we had put ourselves into a
position to capitalize on the new online opportunity
› Decision-making
› The ‘cost’ of technology relatively speaking is within
the
reach of small organizations
› Strong partnerships – outsourcing is key
› Ability to ‘punch above our weight’

17. Advocates for a Modern Digital Strategy
17
PWC: Life Insurance 2020:
Competing for a future
“As customer expectations
become more exacting
and the supply chain
becomes more
fragmented, your business
will need to develop new
routes to market or risk
being cut out of the loop.”
Deloitte: 2013 Life Insurance
and Annuity Industry
Outlook
”Carriers looking to
overcome challenges
reaching the middle market
might consider developing
direct-to-consumer options
to bolster their agency
distribution system.”
Accenture: The Digital
Insurer
“The difference between
the front-runners and
those who are struggling
to keep up is, in many
cases, the engine that
drives them. Old,
outdated legacy platforms
are costly to maintain and
prevent insurers fromcompeting effectively against
those with modern, flexible systems. “
Capgemini: Trends in
Insurance Channels
“To remain competitive in
the marketplace, insurers
need to redesign their
business processes to speed
up the automation process
and also develop predictive
analytics and automated
underwriting solutions. “

18. 10 years ago you would not
dream of banking online – “it’s
not safe”
5 years ago few people would
buy groceries online
15 years ago Travel Agents would
claim that you cannot book
vacations online – “it needs a
personal touch and experience”
Digital Disruption – Other Industries
18

19. Disruption in Retail
19

20. The Trend is Online Distribution
Consumers are looking online to buy insurance:
§ 250,000 relevant Google searches every month in
Canada
§ 2.6m relevant Google searches every month in US
Opportunities:
§ Growth
§ Better customer experience
§ Low expenses = better price / higher profits
20

21. But … The Market Today
Full underwriting is complicated, involves multiple hand-off
and is hard to convert to an online process
Immediate issue in North America typically means
simplified issue:
§ Less underwriting = worse mortality experience
§ Claim underwriting = worse customer experience
21
➢ Higher premiums = disappointed customers
& higher lapse rates

22. How does it work?
Part 3
22

23. Typical Process
Indicative Quote
Underwrite
IssueOfferAdd’l Q’s
Modify Application
Apply
Underwrite
evidence
Further Questions
Indicative Quote Apply
UW at
claim!
Or Simplified Issue
23

24. Can we do better?
Metrics to beat:
Time to Issue 42 – 47 days*
Capacity Depends on number of agents
Cost $500 - $747** + commission
Sources:
* 2009 LOMA Service Turnaround Times Survey – Term Products: 47 days
**SOA 2010 Expense Study Average Per Policy $500 weighted, $747 unweighted
24

25. Yes, we can do better - Much better!
Indicative Quote Apply and UW
Buy
> 5,000x faster
∞ scalable
(85% of the time)
1/10 of the cost
Fully Underwritten
No fluids or additional
evidence
Cover up to $500k
Ave issue time 12 mins
25

26. 10 – 40 year term insurance, up to $500k
Coverage age range 18 - 70
Applied UK experience and P&C lessons
Simpler, yet more flexible than current products
No medical evidence referrals
Online, with offline support if needed
On cover in 15 minutes or less
Full UW + Lower cost = Lower premium
26
The Solution at Teachers Life

27. T10 - $19.10
Online Quote and Application
Basic auto and Manual Underwriting
T10 - $20.00
T20 - $26.04
Online Quote and Application
Basic auto and Manual Underwriting
T10 - $20.10
Online Quote and Application
Basic auto and Manual Underwriting
T10 - $20.30
T20 - $30.69
Online Quote
Manual Application and Underwriting
And price leadership…
MNS Age 40 $150K.Term Life Monthly Premium
* Based on Onvivo product designandpricing at May 2014
27
Insurance
T10 - $13.42
T20 - $21.08
Online Quote, Application and Buy
Automated underwriting immediate
decision including rating if applicable

28. Demo – Path to Purchase
28
Video is available at www.acceptiv.com/AFA2015

29. Our Turn Key Solution for Canadian Fraternals
A Complete Solution:
§ Full go to market solution for online fulfillment
§ Administration support
§ Product and underwriting
designed for online distribution
Faster, less costly, more agile:
§ Fast, economical solution
§ Benefit from Teachers Life
experience
§ Pay for results
29

30. Acceptiv / Teachers Life Solution
30
Acceptiv
§ New Business Process
customized to your brand
§ Underwriting Rules and
system
§ Product design and pricing
Your Reinsurer
Teachers Life
§ Administration System
§ Customer Service
VersaPay
PCI compliant payment
New Business Administration

31. Do we need to change?
Closing Thoughts
31

32. $20T
uninsured
New
Entrants?
Synergy
$2.7 b
Term
market
$14.5 b
Protection
market
32

33. Life Insurance Industry - Barriers to Entry
Highly Regulated
Prudential oversight of insurance companies
Capital adequacy
Policyholder protection
Complex Infrastructure
Systems
Processes
Brand Reputation
LIFE INSURANCE IS SOLD NOT BOUGHT
33

34. 34
Video is available at www.acceptiv.com/AFA2015

35. Any Questions?
35
www.acceptiv.com/AFA2015

36. Are Online Sales in Your Future?
Thank You
Doug Baker
dbaker@teacherslife.com
Kevin Pledge FSA, FIA
kevinpledge@acceptiv.com
www.acceptiv.com/AFA2015