The Direct Marketing Two-Step—A Winning Business Model.

1. The Direct Marketing Two-Step—A Winning Business Model. Case study examining the lead generation-conversion business model for life insurance. A highly adaptable technique that applies to many products that is more complex than normal invitation-to-contract insurance offers

2. Who am I? • Why am I talking about a two step? • What’s the two step? • Zurich Direct – A ‘two step’ case study key success factors

3. Who am I? Ric Surowiec Present: Director of Marketing – Mutual of Omaha Past: VP Marketing & Sales - Chase Insurance Direct (Protective Life) VP Marketing – Chase Insurance Direct a JP Morgan Company VP Marketing – One Life Direct a BankOne company SVP, CMO – Zurich Direct (All the same company – began as Zurich Direct) • 20 years experience in insurance • 15+ years in direct to consumer insurance • Experience in a broad array of direct response media, radio, print, direct mail and Internet.

4. Why am I talking about a two step? Important DR tactic that insulates from much of what challenges us today. • Increasing paper costs • Increasing postage costs • Increasing regulation • Decreasing RR Most importantly… Don asked me to do so!!

5. What’s the two step? Different things to different people …for today: Any direct marketing that includes a proactive call to action and doesn’t include the ability to consummate the transaction in ad that called for the action. (i.e. Lead Generation)

6. Rules we’ve generally followed #1 Mention the product / SELL THE INQUIRY #2 Emphasize ease of doing business #3 Set expectations & follow-up #4 Measure, measure, measure Do more of what working Do less of what’s not working #5 Start at the beginning – make the phone ring

7. Zurich Directa look at real life insurance example • High level stats • 200% annual growth rate over first five years • At maturity annual new business ran $25-$30 million per year. • Over the ~15 years over $400 million in-force premium and ?? billion of coverage • Generated 500,000 inquiries per year

8. Zurich Directa look at a life insurance example • How did it work? • Lead generation marketing • Radio • Print • Television • Direct Mail • Internet • Telephone “sales” center • Employees of the company • Licensed in all states • Trained as clean case UW up to $250,000 • Sales mentality – very important component

9. Zurich Directa look at a life insurance example • Sample ads

10. Zurich Direct: King

11. Zurich Direct: Roy

12. Zurich Directa look at a life insurance example Key success factors Focused on the customer • Most of the break - thru creative was driven from research • Talk to your customers developing – DM, TV, etc. • Marketing & Sales Process were built around the customer experience Permitted puritanical approach to testing • Scoring equations • Development of new creative

13. Zurich Directa look at a life insurance example Key success factors (continued) Highly refined tactics to measure results • Combined a number of traditional tactics – Finder Number & DNIS ANI • Technology carried the burden • Redundancy / cross checks Technology / CRM enabled mass personalization in Sales Center • Personalized contact letters from Sales Representative • Follow-up strategy enabled on behalf of Sales Representative • TO-Do’s to remind them of call back dates • Later years = Strong telephony integration

14. Zurich Directa look at a life insurance example Key success factors (continued) Highly driven sales culture • Sales leadership celebrating successes every day • Metrics on Sales performance published – culture that encouraged constructive competition Top management at Zurich committed to new channels • Invested in learning – the business lost money at the start

15. Zurich Directa look at a life insurance example Challenges: Maintain level lead flow Capacity utilization “You’ve got to do the math” (both sides marketing & sales) Channel conflict Early days only

16. Q&A