1. The Next Extraordinary Marketing Opportunity Lindsay R. Resnick Chief Marketing Officer

2. "Health reform could benefit the insurance industry dramatically by generating billions of dollars of new revenue and millions of new customers . Harris Interactive Game Changer Retailization of healthcare “ Insurers will compete head-to-head as health insurance exchanges open up a $60 billion market in 2014 reaching an estimated $200 billion by 2019 and covering 28 million people.” PricewaterhouseCoopers PwC Health Research Institute “ The health insurance industry is moving from wholesale to retail . A direct-to-consumer sales process significantly changes the customer mix insurers are used to dealing with.” PNC Healthcare © 2011 KBM Group CONFIDENTIAL & PROPRIETARY

3. Market Transformation Customer Connection Marketing Remix User Experience Opportunity Pathway

4. If opportunity doesn't knock, build a door (MB)

5. Medicare Medicaid 1960 1970 1980 1990 2000 2010 HMOs PPOs CDHPs Medicare Advantage Part D PPACA History of Transformation Assess – Benefits – Cost U.S. health care spending is $2.7 trillion going to $4.6 trillion in 2020 (20% GDP) Average health care costs for families insured through their employer is $19,393 $3,280 Employee out-of-pocket $4,728 Employee contribution $11,385 Employer contribution

6. Health Care Reform Marketplace churn Patient Protection and Affordable Care Act (PPACA) 10-years, $940 billion, 32 million covered © 2011 KBM Group CONFIDENTIAL & PROPRIETARY 2011 2016 Scenario A 2016 Scenario B Employer 160 150 115 Individual 18 11 25 Uninsured 50 20 26 Medicaid 40 53 56 Medicare 45 58 58 Exchanges 0 24 36

10. Previously Uninsured Pre-Ex Timebombs Abandon Employees Opt-Out Employees Individual Shoppers Newly Subsidized Medicaid Qualified Newly Medicaid Medicare Boomers Medicare Switchers New Market Segments Seize opportunity, buffer risk Product Diversification Risk Profiles Compliance Maze Administrative Complexity Provider Network(s) Customer Experience Brand Position Marketing Outreach Distribution Channels LifeTime Value SEGMENTS IMPLICATIONS

11. Fish where the fishes are

14. EXAMPLE: Digital Segmentation * Digital Devices Digital Destinations * Digital Neighborhoods 2.0 Why consumers chose the digital devices they use Will they re-purchase and/or upgrade Who are early technology adopters vs. more conservative consumers What are their digital activities: professional, entertainment, education, buying, bill paying KNOW YOUR DIGITAL COMMUNITY By knowing digital attitudes and behaviors across range of technologies and devices marketers can deliver customized messages to customers via their most preferred digital media.

15. What matters today are conversations with & among consumers (LW)

17. Customers are in control. They’re talking about you, reviewing you, and price checking you. They have a choice and they determine your value… so listen to them and engage in their conversation! © 2011 KBM Group CONFIDENTIAL & PROPRIETARY Marketing Remix Wherever, whenever, however

18. LOW ENGAGEMENT Push advertising One-way, top-down Broadcast/print/outdoor Brand-focused Mass marketing ENGAGEMENT Push messaging Interactive Email/search/banner Brand-response Mass-to-segment HIGH ENGAGEMENT Customer dialogue Always-on, digital-only Social/mobile/video “ Me” content focused Narrowcast 20% consumers trust advertising… 80% consumers trust other consumers Conversational Marketing Offline to online continuum

19. UR UX SUX

21. Consumer Experience by Industry Customer Experience Index, 2011: Health Insurance Plans, April 29, 2011

23. HIGH ENGAGEMENT LOW ENGAGEMENT End-to-End UX Create bridge of relevant connections Superior UX is a marketing tool extraordinaire! © 2011 KBM Group CONFIDENTIAL & PROPRIETARY Knowledge Consistency Transparency Informed Active Trusting

24. Big ideas precede big achievement

25. Plan For Uncertainty Transformation yields opportunity © 2011 KBM Group CONFIDENTIAL & PROPRIETARY

27. - Define what you stand for - Establish why you are different - Articulate your unique value proposition Clutter-Buster Differentiate Brand In commoditized and standardized markets… Who are your “best” most profitable customers ? What are your comparative marketplace advantages? Why do you get beat in sales situations? © 2011 KBM Group CONFIDENTIAL & PROPRIETARY Give your “ best potential ” customers a reason to convert to your brand and always have a pathway to loyalty.

29. Customer Interaction Navigation resource and decision support If we ask customers to shop for benefits and engage in clinical decision-making, they need to be educated and supported about how to make smart economical individualized choices. Educate and guide your customers Provide information on price & quality Reward healthy behavior & choices Reinforce purchase with after-sale sale

30. Marketing Remix From monologue to dialogue Data – from acquisition to retention to ROI, use informatics to optimize marketing Different – break-through brand position and superior customer experience Direct – accountable creative supporting retail healthcare selling channels Digital – high engagement, socialized marketing to keep pace with customer trends © 2011 KBM Group CONFIDENTIAL & PROPRIETARY Identify opportunity and fine-tune relationships by listening to and joining customer conversations

31. Lindsay R. Resnick Chief Marketing Officer Phone 773.372.4961 Email [email_address] Web KBMGhealth.com Blog lindsayresnick.com Twitter @ ResnickLR Questions Comments Observations Opinions