ABIA Annual Conference October 8-10, 2003
Transcript of ABIA Annual Conference October 8-10, 2003
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ABIA Annual ConferenceOctober 8-10, 2003
Fee Income Optimism through Integrated Marketing Programs
Presented By:Nasim Ali, Executive Vice President Marketing & Sales, SBLI USAGene Schaefer, Senior Vice President, New York Community BankJim Potter, Director of Insurance, GreenPoint Bank
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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
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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
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Platform Sales
Gene Schaefer, New York Community Bank
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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
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Third Party Products Include: - Life Insurance - Accident & Health Insurance - Annuities (Fixed & Variable) - Mutual Funds - Accidental Death
A Success Story on the Platform
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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
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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
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- Executive Buy-In/Accountability - Team Leading & Coaching - Compensation - Incentives - Referral Program - Goals and Tracking
Keys To Success: Services
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- 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
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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.
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- 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
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- 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
Key Points
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Direct Marketing & Telemarketing Jim Potter, GreenPoint Bank
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GreenPoint Insurance
• GreenPoint Bank
• GreenPoint Mortgage
• GreenPoint Credit
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Why Utilize Direct Marketing?
• Provides incremental revenue • Expands “insurance” brand awareness• Provides ability to target “hard to reach”
customers• Allows targeted “life event” marketing
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Forms of Direct Marketing
• Solo targeted solicitation• Product Insert• Telemarketing• Lead generator• Internet• Statement Messaging• Statement Solicitation
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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
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Strategies for Success
• Track who buys – develop models for future campaigns
• Develop contact management database
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Paving the way to Profitable Partnerships
Nasim Ali, SBLI USA
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Life Insurance Industry Facts: Uninsured Americans
31% of U.S. households have no life insurance protection.
Over 40% of all Americans (104 million people) have no life insurance coverage.
The basic life insurance need is estimated to be $5 trillion.
0%10%20%30%40%50%60%70%
Households All Persons
No Life InsuranceNo Individual Life InsuranceNo Group Life Insurance
Source: LIMRA, LOMA, ACLI
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Life Insurance Industry Facts: Uninsured Americans
The percent of households that do not have any type of life insurance has been increasing
The percent of people who do not own life insurance has been increasing also
0%
10%
20%
30%
40%
50%
Households People
Percent of Households/People With No Life Insurance
1984 1992 1998
Source: LIMRA
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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.”
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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
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Paving the Way to ProfitsProfitable partnerships
The Financial 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 AN OPEN MARKET TO PENETRATE
+ +
THERE IS A VEHICLE WITH WHICH TO DO ITTHERE IS A VEHICLE WITH WHICH TO DO IT
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Banks Can Fill the Void
Banks are trusted by consumers
Banks are the Brick and Morter
Banks already posses the infrastructure to distribute financial services products
Banks are well positioned to capitalize on this open area in the market
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Multi-channel Distribution
Bank Platform
Direct Mail
Telemarketing
Internet
Branding / Advertising
SBLI USA Integrated Marketing Plan
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Simple Products that are Easy to PurchaseTailored 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
Integrated Marketing Plan
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Things to Consider
When Comparing Life Insurance Companies Consider:
Value & Affordability Quality Products Products that are easy to buy and simple to understand.
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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.
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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?
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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
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A Successful Relationship
Q&A