ABIA Annual Conference

October 8-10, 2003

Fee Income Optimism through Integrated Marketing

Programs

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

1
History
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

2
History
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.

3
 Platform Sales
Gene Schaefer, New York Community Bank

4
Success Story on the Platform
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)
5
A Success Story on the Platform

Third Party Products Include:

- Life Insurance
- Accident & Health Insurance
- Annuities (Fixed & Variable)
- Mutual Funds
- Accidental Death

6
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

7
A Success Story on the Platform

A One Stop Shop

- A Financial Supermarket
- 25 to 30% of non-deposit fee income can
come from financial services

8
Keys To Success: Services

- Executive Buy-In/Accountability
- Team Leading & Coaching
- Compensation
- Incentives
- Referral Program
- Goals and Tracking

9
Before You Sell You Should Know:
Services
- Who are your customers?
- What products should you offer?
- What Strategic Partner to have?
- Who should staff your branches?
- Should you offer Annuities?

10
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.

11
Buy, Build or Rent a Sales Force

- Platform, Dedicated, or Hybrid

- Set-up costs
- Training & Advice
- Licensing Issues
- Sharing the risks
- Administrative burdens: customer service,
policy issuance, claims admin

12
Key Points

- Insurance Management reports through Retail Banking

- License all CSRs and Branch Managers
- Branch Managers report to District Managers
- Establish Premium Goals for each Branch Manager
- Introduce incentive compensation
- Reward and recognition program
- Minimum monthly goal per licensed CSR

13
Direct Marketing & Telemarketing
Jim Potter, GreenPoint Bank

14
 GreenPoint Insurance

• GreenPoint Bank

• GreenPoint Mortgage

• GreenPoint Credit

15
 Why Utilize Direct Marketing?

• Provides incremental revenue

• Expands “insurance” brand awareness
• Provides ability to target “hard to reach”
customers
• Allows targeted “life event” marketing

16
 Forms of Direct Marketing

• Solo targeted solicitation

• Product Insert
• Telemarketing
• Lead generator
• Internet
• Statement Messaging
• Statement Solicitation

17
 Strategies for Success

• Align programs with distribution channels and

customer demographics
• Offer a variety of products
• Access the carrier’s knowledge of what works and
what doesn’t
• Utilize “life event” marketing
• Utilize “hot list” marketing techniques

18
 Strategies for Success

• Track who buys – develop models for future

campaigns
• Develop contact management database

19
Paving the way to Profitable
Partnerships
Nasim Ali, SBLI USA

20
Life Insurance Industry Facts: Uninsured Americans

 31% of U.S. households have no 70%

life insurance protection. 60%
50%
40%
 Over 40% of all Americans (104
30%
million people) have no life
20%
insurance coverage.
10%
0%
 The basic life insurance need is Households All Persons
estimated to be $5 trillion.
No Life Insurance
No Individual Life Insurance
No Group Life Insurance

Source: LIMRA, LOMA, ACLI

21
Life Insurance Industry Facts: Uninsured Americans

 The percent of households that Percent of Households/People

do not have any type of life With No Life Insurance
insurance has been increasing
50%

 The percent of people who do 40%

not own life insurance has been 30%
increasing also 20%
10%
0%
Households People

1984 1992 1998

Source: LIMRA
22
 Life Insurance Industry Facts:
UNDER-insured Americans
 80% of Americans who are
insured are dramatically
UNDER-insured.*
 Households with life insurance
coverage have far less coverage
than they need. The median
amount for all adults estimated
at just over $30,000.

* “…$250,000 [is the] minimum per household average many [life] insurance
consultants recommend.’ See Stephen Advokat, “The Facts of Life.”

23
 Target Audience
 Consumers
 <$80K HH Income
(Low to moderate income segment earning $75,000 or less HH income
comprises 77.4%* of the U.S. households.)
– Women
– African American
– Hispanic
– Asian
– South Asian
 Those with no life insurance or who are underinsured
 Heads of family or households
 The underserved and neglected
 “The people who make America work.”

Source: 2000 US Census

24
 Paving the Way to Profits
Profitable partnerships
 TheFinancial Modernization Act - Gramm-Leach-Bliley has
paved the way for marketing insurance products/services through
partnerships with banks and agencies
 We now have a path leading us directly to the customer.

 THERE IS AN OPEN MARKET TO PENETRATE

+

THERE IS A VEHICLE WITH WHICH TO DO IT

25
 Banks Can Fill the Void
Banks are well positioned to capitalize on this open area in the market

 Banks are trusted by consumers

 Banks are the Brick and Morter

 Banks already posses the infrastructure to distribute

financial services products

26
 SBLI USA Integrated Marketing Plan
Multi-channel Distribution
 Bank Platform
 Direct Mail
 Telemarketing
 Internet
 Branding / Advertising

27
 Integrated Marketing Plan
Simple Products that are Easy to Purchase
Tailored and positioned for each specific distribution channel

Internet:
 Thank You AD&D / SeniorLife
 Lead Generation for Term & Whole Life

Direct Marketing - Mail or Telemarketing:

 Simple Issue Term / Thank You Customer Advantage Term / Employee
Group Life / Group Mortgage / SeniorLife / Thank You AD&D / SBLI
USA Saver’s Club

Face-to-Face:
 Whole Life / Underwritten Term
 Simple Issue Term / SeniorLife / Juvenile Term

28
 Things to Consider

When Comparing Life Insurance Companies Consider:

 Value & Affordability

 Quality Products
 Products that are easy to buy and simple to understand.

29
 Consider: Customer Service

Remember the importance of:

 Access - a company must make use of new technologies to

reach the customer.
 Personal touch - friendly, knowledgeable service is key.
 Ease - convenient hours of service; fast and reliable
service.

30
 Consider: Banking Experience

Questions to ask:

• Is your life insurance company actively seeking

partnerships?
• Does the life insurance company understand the bank
culture?
• Do they provide training and customer support programs
for bank-licensed agents?

31
 Require: Compliance and Due Diligence

Remember the importance of:

 A company’s regulatory history
– assess compliance record
– review “Blue Book”
 Due Diligence, while providing valuable services to the
customer, offers many advantages
– increased customer retention
– cross-selling opportunities

32
A Successful
Relationship

Q&A

33