Agenda

1. Indianapolis Life Insurance CompanyEnterprise Level Balanced Scorecard Workshop IStrategies & Critical Success Factors

2. Agenda • Balanced Scorecard Overview 1:30 - 2:00 • Vision and Objectives Confirmation 2:00 - 2:15 • Breakout Session I: Critical Success Factors 2:15 - 3:30 • Breakout Groups • Coffee Break • Reconvene & Present • Breakout Session II: Measures 3:30 - 4:15 • Breakout Groups • Coffee Break • Reconvene & Presentations • Discussions & Next Steps 4:15 - 5:00

3. Why Measure? • Provide a vehicle to communicate and gain consensus on the vision and strategies • Identify roles, responsibilities and accountabilities throughout the organization • Assist in prioritizing initiatives to optimize resource allocation • Help identify what should be focused on • Identify areas for improvement • Provide information to support decentralized decision making“You can’t manage what you can’t measure”Bill Hewlett, Hewlett Packard

4. Strategic Process Individual Improvement Portfolio Balanced Scorecard Process The Balanced Scorecard is a Continuous Process Measurement Definition : What measures reflect strategy execution? Reporting & Analysis: How to report & analyze performance measures most effectively? Stakeholder Value Evaluation & Improvement: Given performance signals, what can be done to improve results? Quick Continuous Focus Re-engineer

5. Translating the Vision & Strategy A Good Balanced Scorecard Tells the Story of Your Strategy and Vision Tracking & Measuring the Vision Requires... The Vision ? …describing the destination with much greater precision. ? ? t t

6. Identifying Critical Success Factors Strategy: Revenue Growth Improve Returns Financial Perspective (A Set of Cause and Effect Relationships) Broaden Revenue Mix Increase Customer Confidence in our Advice Customer Perspective Cross-Sell the Product Line Understand Customer Segments Develop Offerings Internal Process Perspective Employee Satisfaction Employee & Innovation Perspectives Improve Customer Information Align Reward Systems Broaden Skills (Financial Planning)

7. Identifying Performance Measures Strategy: Revenue Growth Financial Perspective Every Measure Ultimately Ties to a Financial Result Improve Returns • Return on Investment • Revenue Mix • Revenue Growth Broaden Revenue Mix Customer Perspective Increase Customer Confidence in our Advice • Customer Satisfaction Survey • Customer Retention • Depth of Relation Understand Customer Segments Cross-Sell the Product Line Develop Offerings Internal Process Perspective • Share of Segment • Product Development Cycle Time • Revenue from New Products • Hours with Customers • Cross-Sell Ratio Employee Satisfaction Employees & Innovation • Employee Satisfaction • Revenue per Employee • Training & Development Index • Compensation Benchmark • Strategic Information Availability Improve Customer Information Align Reward Systems Broaden Skills (Financial Planning)

8. Developing a Scorecard Step 1: Confirm/Define the Shared Vision Step 2: Clarify/Articulate Strategies to Achieve the Vision Step 3: Define Critical Success Factors (CSFs) for Various Perspectives Step 4: Determine Performance Measures Step 5: Establish Short & Long Term Measure Targets Step 6: Define Initiatives to Reach Targets The Vision Strategy Financial Perspective “If we succeed, how will we look to our shareholders?” CSF Measure Target Initiative Improve Returns ROI Diversify Mix Revenue Mix Shareholder Value EVA Customer Perspective “To achieve our vision, how must we look to our customers?” CSF Measure Target Initiative Delivery Time Cycle Time Quality Quality Index Price Competitive Price Benchmark Internal Process Perspective “To satisfy our customers, in which business processes must we excel?” CSF Measure Target Initiative New Products Prod. Development Cycle Time Efficiency %Non-Value Added/Value Added Cross-Selling Cross-Sell Ratio Employees & Innovation “To achieve our vision, how will we sustain innovation, & change & develop our people?” CSF Measure Target Initiative Retention Retention Ratio New Products % Revenue from New Products<2yrs High Morale Absenteeism

9. Measurement Logic Communicating Supporting

10. Enterprise Scorecard Development

11. Defining Measures Design Team Findings & Recommendations Long Term Vision of Performance Management across Indianapolis Life “Quigley” Analysis Executive Interviews & Facilitated Sessions Performance Scorecards AffiliationImpact “Rollout” Philosophy Business Unit Strategic Plans E & Y Insurance & Annuities Databases IS/IT Implications

12. Vision Strategies CSFs Measures Confirming the Vision & Strategies Definition: Longer-term direction of where Indianapolis Life aspires to be, how and on what basis to compete. Inspirational, and understandable throughout the organization • Key Worksteps: • Review current vision and strategy statements • Revise vision and strategies • Present findings to group

13. Scorecard Template To be an innovative, growing, high performance,public financial services enterprise that makes the future better for all our stakeholders. Our Vision Create value for all stakeholders Win through people Grow profitably • Attracting • Connecting • Developing • Empowering • Building new and existing distribution systems • Co-marketing, private label relationships • Affiliations and acquisitions • Pricing, persistency, mortality, investments, expenses • Create economic value for investors • Products and services to meet customer needs • Productive, mutually beneficial relationships with distribution partners • Employee owners • Good corporate citizens Our Objectives Our Measures of Success

14. Vision Strategic Thrusts CSFs Measures Determine Critical Success Factors • Definition: • What needs to happen to execute strategy successfully. CSF’s must be: • Actionable • Associated with Business Decisions • Specific and • Measurable • Key Worksteps: • Review Strategies • Establish Agreed Upon List of CSFs Necessary to achieve the objective • Narrow CSFs

15. Areas Critical from a Financial Perspective • Growth • Revenues • Operating Earnings • Capital • Profitability • ROE • ROA • EPS • Consistency in results • Quality earnings (GFO) • Clearly articulated strategies

16. Areas Critical from a Customer Perspective • Accuracy • Quality • Timeliness • Cost effectiveness • Support • Handling customers with multiple products

17. Areas Critical from a Process Perspective • Business Fundamentals • Issuing • Billing • Paying commissions • Calculating policy values • Time, cost and quality • Production costs

18. Areas Critical from a Development & Growth Perspective • Empowered personnel • Maintaining and enhancing the culture • Education and training • Retention and development • Management skill sets • Communication and information sharing • Accountability

19. Exercise - 60 Minutes (CSFs) • Breakout Groups • 3 Groups • Complete Cause & Effect Diagrams • Narrow CSF’s to “Vital Few” • Return to facilitator • 10-Minute break • Group “Reporter” Present Findings Questions: 1) What must be done to reach our objectives?2) What is the relationship between financial and non-financial factors?3) Are these CSF’s measurable3) Are these complete and accurate?

20. Breakout Groups 1 - Sun Room 2 - Library 3 - Board Room • Jim • Steve • Jack • Karla • Gary • Marc • Jon • Lisa • Greg • Larry H. • Linda • Gene

21. Critical Success Factors Group 1 Objectives: Win through people, Grow profitably, Create value Critical Success Factors Financial Customer Processes Learning & Growth

22. Critical Success Factors Group 2 Objectives: Win through people, Grow profitably, Create value Critical Success Factors Financial Customer Processes Learning & Growth

23. Critical Success Factors Group 3 Objectives: Win through people, Grow profitably, Create value Critical Success Factors Financial Customer Processes Learning & Growth

24. Next Steps • Enterprise Scorecard • Refine measures of success • Complete data dictionary • Formula • Availability • Data Source • Missing Measures Program • Frequency of reporting • Responsibility • Establish targets • Align initiatives (tactics) to measures • Cascade Measures • Determine entities for scorecard (measurement logic) • Develop measurement “package” for defining measures • Reporting • Identify reporting package (Manual vs. Automatic) • Identify reports (drilldown, composition)