Getting to the future first may empower a company to

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Getting to the future first may empower a
company to establish the rules by which other
companies will have to compete.

• -Gary Hamel
• Competing For The Future

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IDMF - 07

• John Harrison
• Insurance (40 Yrs)
• PC
• Life/AH
• DMKTG (35Yrs)
• Public/Private
• Athlete/Metrics
• No Job/Mentor
• 5 GKIDS (7-19)

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Insurance is a Promise

• Digitize the process improve profitability

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Insurance is a Promise

• Promise is delivered at claim time
• Its intangible
• Cant touch, feel, or see it
• Digitize the process Low cost technology
• Use Internet as a platform
• Leverage it with technology
• Speedup/simplify the process
• Improve Sales/Retention/Profitability
• Let me set the scene for our discussion

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Heres What Well Discuss

• DM Insurance Basics
• Healthcare Industry
• Health Insurance-Retail Revolution
• On-Line Market
• Straight Thru-Processing (STP)
• HBDC

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Where 1 of Insurance Premium Goes?

• Metric Driven-Regulated
• Fixed Costs
• Loss/Claims Reserve
• State Tax
• Claim Costs
• Variable Costs (2)
• Marketing
• Administrative
• Additional Profit

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Public Policy Drivers

• Shift from defined benefit to contribution
• Employer Based
• Consumer Directed
• Uninsured Population
• 47M People
• 15.8 of Population
• Healthcare Reform
• Federal
• States

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Retail Revolution - McKinsey

• Historically Employer provide Healthcare
• Wholesale
• Group Process/Systems
• Now Individuals make the decisions
• Retail
• What, Where, When and How
• By 2011 fate of 600B of premiums
• Who will succeed in the Retail Revolution

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Retail Revolution - McKinsey

• Product Innovation
• Integrated Product Portfolio
• Effective Productive Management
• Consumer Channels
• Direct Response
• Retail
• Affinity Marketing Relationships
• Financial Service Partners
• Work Site marketing

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IBM-Insurance 2020/Mega-Trends

• Active and informed multi-demographic consumers
  reward non-traditional companies
• Technology virtualizes the value chain lowers
  barriers to entry
• Mainstream insurance products are dynamic and
  provide more consistent performance
• Regulatory acceptance of affirmed industry
  standards broaden to global scales

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Insurance Value ChainLeverage it with
technology
Agent/Broker
Insurance Carrier
Insured
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Mega-Trends Force Industry to Innovate

• Old modes of thinking threaten ability to
  innovate
• Interlopers will disrupt traditional insurance
  operations
• Leadership will require experimentation in
  operating models, processes, products and
  customer relationships
• Strategic investment in innovation critical to
  success in 2020.
• Future Transition will take effort and intention

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Converging Media/Channels Trends

• Online/Offline/Electronic
• Wired/Digital Homes
• Online vs Radio
• Insurance Ad Spend by Media
• Consumer Behavior
• Social Networks

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Multiple Channels - Closed Loop Process
Back Office
Employees
Call Centers
Customer Information
Customers
Agents Brokers
Web eMail
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Todays solution

• Straight through processing (STP) can help direct
  marketers achieve All of the above by.
• Automating the quoting and application process to
  convert more scarce leads
• Helping call center agents sell more by managing
  the sales process more effectively and
  efficiently
• Creating an electronic data flow that reduces
  work steps and increases accuracy
• Creating a cost-effective new business process
  that supports the sale of lower face value
  policies at close to fully underwritten premiums
• STP can help differentiate you by delivering what
  customers want.

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Market Opportunity
There are an estimated 137 million potential
consumers for individual health insurance
Source U.S. Census Bureau, Bureau of Labor
Statistics
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Many Reasons for Growing Demand

• 47 million uninsured Americans
• 20 million Americans with individual health
  insurance
• Market dynamics driving growing demand
• Increasing cost of health care
• Inefficient methods of distribution
• Declining percentage of US employers offering
  health insurance
• 69 in 2000 vs. 59.7 in 2006
• Employers and consumers increasingly want control
  over individual health care costs
• Only 9 of private insurance coverage is obtained
  through direct purchase

2005 Annual Employer Health Benefits Survey by
the Kaiser Family Foundation
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Optimal Customer Experience

• Alternative to traditional and internet only
  insurance sales models
• Offers insurance customers the Power of Now on
  their own terms
• Immediate connection to knowledgeable live agents
  
• Choice, convenience and value
• No comparable alternative in online marketplace

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Operational Sales Team
HBDC closes insurance applicants with

• 105 Licensed insurance agents
• 43 Sales qualifiers
• 42 In-house verification agents
• 18 In-house customer service
• 18 In-house technologists
• 24 Other employees Total Employees 250

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Insurance Underwriter Relationships

• Insurers are re-emphasizing individual health
  insurance.
• Contracted with top carriers - have validated our
  business model
• Increasingly becoming a leading distribution
  partner and are well positioned to improve
  penetration with major carrier s

A Torchmark Company
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HBDCs Revolutionary Sales Cycle lt 1 Day/Hour
Traditional Sales Cycle Several Weeks

• HBDCs Model
• Prospect views multiple highly rated carriers
  online
• Prospects information sent electronically to
  proprietary dialing application
• Call from licensed, in-house insurance agent
  usually generated within 30 seconds
• Emphasis on agents sales talent by off-loading
  time consuming follow-up and customer service
  tasks to lower cost service specialists

• Traditional Model
• Agents pound pavement to generate new
  customers, usually limited to local community
• Process requires manual lead generation, cold
  calling, follow up and travel
• Agent typically represents only one or two
  carriers
• Numerous inefficiencies higher cost lead
  generation

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Underlying Click-2-Call Magic
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Changing The Industry
HBDCs proprietary technologies and processes
have created dramatic increases in productivity

• Top industry field-based agents submit
  approximately 400,000 of premiums annually
• Top HBDC agents submit up to approximately 6.0
  million of premiums annually (approximately
  120,000 weekly)

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Summary Digital/Integrated Solution

• Total technology solution
• Improve productivity-Call center Business
  processing
• More sales more often
• Improved placed and paid rate
• More sales closed
• More commissions paid faster
• Operational costs reduced by up to 75
• Reduction in errors and missing requirements
• Reduction in paper handling, mailing, and storage
• Increased competitive position
• Profoundly improves applicant experience
• Gain market share

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Realtime STP - Outsource
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Atiam (InsPro) Integrated-Modular System
Policy Administration
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Digitizing and Integrating the Process
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jharrison_at_keystoneequities.com 800. 715.9905
X6310 847.867.9759 Mobile www.keystoneequities.co
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