Growing the Value Agency Distribution · 2010-09-29 · Statistics and quote from "New game, New...
Transcript of Growing the Value Agency Distribution · 2010-09-29 · Statistics and quote from "New game, New...
Growing the Value
Agency Distribution
Tim Stonehocker
Executive Vice President Agency Distribution
A&I Conference – November 2007
Key Messages
� Focus on recruiting and distribution expansion
� Continue to leverage our expertise in new markets
� Commitment to product innovation and unique programs that attract and retain distribution
� Use technology to create efficiencies and streamline processes, both internally and in the field
� Retail life sales surpass industry growth rate
2 A&I Conference – November 2007
Business Units
Reinsurance Life & Protection Institutional Individual Savings
& Retirement
Pensions &
Asset Management
AEGON Americas
Transamerica Insurance & Invest Group
World Financial
Group
Transamerica Worksite Marketing
Monumental Life
AEGON Direct Marketing
Services
Long Term Care
Transamerica Capital
Management
Transamerica Fund
Advisors
Diversified Investment Advisors
Transamerica Retirement Services
Transamerica Retirement
Management
Transamerica Investment
Management
AEGON Institutional
Markets
Extraordinary Markets
Transamerica Reinsurance
3 A&I Conference – November 2007
Approach to the Retail Life Marketplace
Affluent Market
Lower Income Market
Middle Income Market
Business Unit Characteristics Producer
Penetration
TIIG International High net worth clients served through offices in
Hong Kong, Singapore and Dubai
25%
TIIG Domestic General Agency approach with majority of business from
former Transamerica branch system
>50% of top
GA’s
AEGON Owned Broker Dealers /
Marketing
Organizations
World Financial Group, InterSecurities and Transamerica Financial Advisors
80% Life
30% Annuity
Middle Market
Brokerage
iGroup, Life Investors Financial Group, Alliance Marketing 30% to 90%
Transamerica Worksite Marketing
Voluntary benefit specialists and enrollment firms 75%
Monumental Home service business 100%
We capture the majority of the business of our producers
4 A&I Conference – November 2007
�
Product Solutions
Life
Insurance
College
Planning
Annuities
Retirement
Strategies
Business
Solutions
Mutual
Funds
A&I Conference – November 2007 5
Continued progress maintaining a leadership role in product innovation is critical
Current Producer Environment
� The number of agents in direct channels has declined to fewer than 170,000 from a high of 253,000 in 1975
� At current recruiting levels, this will decline to less than 150,000 by the end of this decade
� More than half of independent agents are age 54 or older and heading toward retirement
"Lost Rather Than Stolen: Producers rank financial factors as the leading motivator to switch carriers, but product leadership, career opportunity, or more autonomy are mentioned nearly as often as financial reasons. However, many producers also lost to the competition rather than being enticed away. The effect of corporate staff reductions is being felt by producers who feel that they are being starved in terms of availability and quality of services companies provide compared with years past. The result is that producers are just as likely to be pushed to another company as they are to be pulled away.“
RECRUITING AND RETAINING DISTRIBUTION IS OUR STRENGTH
Statistics and quote from "New game, New Rules, New Reality The Economics of Growing Distribution, by Lucian J. Lombardi, ASA VP and Director, Distribution and Strategic Research, LIMRA International and Daniel C. Inveen Manager, Business Consulting Group, Moss Adams LLP.
6 A&I Conference – November 2007
Areas for Growth in Distribution
� World Financial Group (WFG)
� Transamerica Insurance and Investment Group (TIIG)
� New Business Development
7 A&I Conference – November 2007
WFG Has Experienced Strong Agent Growth
18,029
17,075 16,685
15,359 14,616
14,042
13,026 12,286 12,016
11,081 10,356
1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 2Q 2006 3Q 2006 4Q 2006 1Q 2007 2Q 2007 3Q 2007
WFG’s agent force has increased 74% since 1st Quarter 2005
Numbers represent active life and NASD registered agents
8 A&I Conference – November 2007
WFG Sales Growth Driven by Agent Growth
In USD mln
80
20
25
60
22%
15
40
10
20 5
0 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months 2006 2006 2006 2006 2007 2007 2007 2006 2007
Sales in the first nine months of 2007 have increased 22% over 2006
9 A&I Conference – November 2007
WFG - China
USD 8 million of Premium
2,729 Applications
720 Agents Licensed
Taking our proven building
blocks of success on agent
recruiting to China
2,644 Agents Recruited
Leveraging our expertise cross border
All numbers presented represent progress since entering the Chinese market through September 2007
10 A&I Conference – November 2007
TIIG – Supporting Our Distribution Channels
Agency Channels
include Brokerage
General Agencies
(BGA), Institutional
Agents and Direct
Marketers
Value high level of service and support,
especially in new business
Main market is high net worth and
large case
Active agent force of 126,000
11 A&I Conference – November 2007
Higher Margin TIIG Sales
In USD millions
80 200
60 150
40 100
20 50
0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2006 2006 2006 2006 2007 2007 2007
56
57%
9 Months 9 Months
2006 2007
Higher margin sales in 2007 have replaced STOLI sales in 2006
12 A&I Conference – November 2007
Leveraging Our Expertise In New Markets
New Market Sales (in USD millions)
� Transamerica has had a Hong
Kong presence since 1930’s 35
� Leverage Transamerica’s brand
in the Pacific Rim to achieve 30
strong presence in affluent
market segments 25
� Grow Hong Kong and Singapore
distribution relationships and
increase market share 15
20
� Implement new institutional
relationship opportunities from
existing accounts 5
10
� Opening Dubai office by year
end 2007 0
1999 2000 2001 2002 2003 2004 2005 2006
Strategy brings higher margin business and a less competitive environment
13 A&I Conference – November 2007
Business Development
Acting as an entry point for distribution, the Business Development Group
looks to create and nurture profitable long term relationships
� At any given time the group is reviewing between 20-30 new opportunities
� Of these, approximately 4-5 will make it into production
� The first initiative is completing their first full year of production and is currently
producing approximately USD 10 million of life insurance premium
� The latest opportunity was a joint business venture with Madison National Life
Resources committed to finding new distribution groups
14 A&I Conference – November 2007
On the Technology Front
CRM Application
Illustration
Archiving
FNA
Delivery
Delivery
Policy Info
Education
Statements
Prospectus
� Program “NOVUS” is a new way of doing business for our agents and clients
� Straight through processing and electronic delivery of information
� More cost efficient than paper
� Essential to be an industry leader, or to even compete, in the near future
Personal, one-stop shop, web based tool tailored to meet
the individual needs of both clients and agents
15 A&I Conference – November 2007
Conclusions
� Increase production by maintaining focus on recruiting and distribution development
� Continue to leverage our expertise into new markets
� Commitment to product innovation and unique programs that attract and retain distribution
� Use technology to create efficiencies and streamline processes both internally and in the field
Well positioned for continued growth
16 A&I Conference – November 2007
AEGON Investor Relations
P.O. Box 85
2501 CB The Hague
The Netherlands
p : +31 70 344 8305
f : +31 70 344 8445
A&I Conference November 200718
Cautionary Note regarding forward-looking Statements
Cautionary note regarding forward-looking statements
The statements contained in this presentation that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation
Reform Act of 1995. The following are words that identify such forward-looking statements: believe, estimate, target, intend, may, expect, anticipate, predict,
project, counting on, plan, continue, want, forecast, should, would, is confident, will, and similar expressions as they relate to our company. These
statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. We undertake
no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking
statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-
looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:
� Changes in general economic conditions, particularly in the United States, the Netherlands and the United Kingdom;
� Changes in the performance of financial markets, including emerging markets, such as with regard to:
- The frequency and severity of defaults by issuers in our fixed income investment portfolios; and
- The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt
securities we hold;
� The frequency and severity of insured loss events;
� Changes affecting mortality, morbidity and other factors that may impact the profitability of our insurance products;
� Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels;
� Changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates;
� Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;
� Changes in laws and regulations, particularly those affecting our operations, the products we sell, and the attractiveness of certain products to our
consumers;
� Regulatory changes relating to the insurance industry in the jurisdictions in which we operate;
� Acts of God, acts of terrorism, acts of war and pandemics;
� Changes in the policies of central banks and/or governments;
� Litigation or regulatory action that could require us to pay significant damages or change the way we do business;
� Customer responsiveness to both new products and distribution channels;
� Competitive, legal, regulatory, or tax changes that affect the distribution cost of or demand for our products;
� Our failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving initiatives; and
� The impact our adoption of the International Financial Reporting Standards may have on our reported financial results and financial condition.
Cautionary note regarding Regulation G (non-GAAP measure)
This presentation includes non-GAAP financial measures: net operating earnings, operating earnings before tax, value of new business and embedded
value. Value of new business and embedded value are not based on IFRS, which are used to prepare and report AEGON’s financial statements and should
not be viewed as a substitute for IFRS financial measures. AEGON believes the non-GAAP measures shown herein, together with GAAP information,
provides a meaningful measure for the investment community to evaluate AEGON’s business relative to the businesses of our peers.
–