Managing Your Agency to High Quality and High Profitability

1. Managing Your Agency to High Quality and High Profitability Section 5 Systems and Tools to Help Manage and Monitor What Matters David Cohen & Micah Cohen American Income Life 2012 Section 5--Systems

2. Outline — 5 Sections • Why Focus on Quality? • Understanding Areas of Business Loss • Understanding Financial Statements and Other Tools Provided by AIL • Daily, Weekly, and Monthly Routines and Procedures • Systems and Tools to Help Manage and Monitor What Matters Section 5--Systems

3. Systems: Outline • Training • 14 day service tickler file • Assigned by SGA and re-assigned by SGA • Pol Mod (Modified Policy Log) • In house system to monitor and track all rated and amended policies • Reinstatements • Weekly report • Review reinstatement guidelines • Review company reinstatement log by agency • Review company reinstatement bonuses last two months • Money Book • For agents and managers Section 5--Systems

4. Quality Management Tools Everything rises and falls on leadership. It is our responsibility to lead people to profitable success. Section 5--Systems

5. Training from Day One • In order to take charge of steps that will insure future income for your agents and managers we must educate both agents and managers from day one. Section 5--Systems

6. Training from Day One New Agent • Regular pack of Union and ChildSafe Leads • Service items as soon as possible • Reinstatement training on-going • See service work during field training Section 5--Systems

7. TrainingTeaching Service Items and POS • Initial training teach how to sell with an emphasis on quality • Reinstatements and POS notices are just introduced in classroom training • Demonstrated in field training • Have managers (SA/GA/MGA) field train with service/POS and code your agents with it • Show lots of reinstatements being done • Continuing education and workshops on POS Section 5--Systems

8. Training • Review the advance reduction • if you lose business you lose advances • stay above 69% so you keep your advance • Review the bonus increase after 10 months for higher quality when retention kicks in • positive reinforcement emphasizes get a higher level of retention and receive more money Section 5--Systems

9. World’s Greatest Bonus-WGB • Example: based on $3,000 ALP per week • 15% bonus and 69% quality=$450 bonus per week • Over 4 weeks =$1,800 • 15% bonus and 82% quality=$585 bonus per week • Over 4 weeks =$2,340 Extra $540 for producing the same production but with higher quality Section 5--Systems

10. Section 5--Systems

11. TrainingUnderwriting and Solidification • Underwriting- basic training focus on flash sheet, in CE teach how to read the Field Underwriting Manual • Final close, place checks in front of the client • One week call back before submit paperwork • An app isn’t sent to home office unless it has everything needed, even if it means missing a bonus • Policies are delivered Face to Face • If cant deliver, then call first, then send in the mail Section 5--Systems

12. Training • Develop a “Special Forces” POS/Conservation unit to raise quality numbers and keep business • Need a support staff and leadership team that can support agents • Train agents how to work notices as a lead to generate business Section 5--Systems

13. Systems • Daily Download • 48 Hour File • Tickler File (14 days) • Underwriting Bulletin • Policy Modification Log • Advance Report, P&P Report and other reports • Reinstatement Reports • Money Book for Agents and Managers • Done to Follow-Up Folder Section 5--Systems

14. Daily DownloadService Letters • Downloaded daily by Home Office • Personally review all service items from daily CAS download • Used to correct items that will affect quality • Demonstrate good customer service and collect referrals • The freshest Best lead (at no cost) to write new business • Let your agents know that if they do not follow up, someone else will • Print out “Lapses Affecting 4 months Retention” to fix quality and use as a lead Section 5--Systems

15. System48 Hour File • Often Items for Daily Queue Report • Bad Check Alert • IPNSF • ININV • Oral Exam missing • Reassign as needed Section 5--Systems

16. System48 Hour File & Queue Report Section 5--Systems

17. SystemTickler File • Set up a 14 day tickler file • Review notices from download and mark with agent assignments (except Cancellations and Withdrawn) • Make copy of notices for tickler file • Each day put in copies of notices form the daily download • Each day pull out the file from 14 days ago • Review tickler file each day by looking in CAS for each item • Distribute original notices • Check status in CAS • Reassign as needed Section 5--Systems

18. Systems • Check Wednesday Bulletin (min 2x/wk) • Check Rated/Amended list (min 2x/wk) • Every Week check Adv report to see what came off • Review Advance Reports 60 days later to follow up on unattended business • Every Month review with MGAs: P&P report, Financial Analysis, Agency Quality Review, Charge Summary Section 5--Systems

19. SystemRated/Amended • logged into a spreadsheet and are given a due day 10days later • 3 weeks later the notice is generated in download from home office and reviewed to check notes in CAS for follow up • Weekly Check NTO in 30 day report in CAS and the internal spreadsheet Section 5--Systems

20. SystemRated Amended Policy Log • SGA tool to see the pending rated/amended cases for entire agency Section 5--Systems

21. SystemRated Amended Policy Log • Sort by each MGA, handed out to them weekly • MGA tool to see the pending rated/amended cases just for their agency Section 5--Systems

22. SystemRated Amended Policy Log • Keep track of the history of previous cases to see what was NTO • Can also be sorted by MGA Section 5--Systems

23. Reinstatement Guidelines • “I just got an urgent message that your policy has lapsed and I just wanted to know what I can do to help?” • Remember – if new business is also sold in the home, always collect two (2) checks. • Always try to collect all back premiums --- in all cases. • Always collect good health statement. • 1st Year Only (Life) • Collect two (2) months premiums. If more is due and you can’t collect all back premiums, indicate one of the following: • Waive Premium (agent does not receive 1st year commissions for that waived period), or • Re-Date policy (if age changes and coverage lowers, tell client. Collect 2 months premium and policy for re-dating). Section 5--Systems

24. Reinstatement Guidelines • Sub Year --- No Cash Value • Collect all back premiums (cannot waive); or • Re-Date policy (if age changes and coverage lowers, tell client. Collect 2 months premium and policy for re-dating). • Sub Year --- With Cash Value • Collect all back premiums (if client can pay only two (2) months premium, indicate that balance should come out of cash value. Indicate request for APL on signed Good Health Statement form). • A&H Policies • 1. Collect two (2) months premium --- no coverage during lapsed period. Section 5--Systems

25. Reinstatement Guidelines Documents Needed • Reinstatement form • MBD Form • HIPPA Note:If policy was rated, collect long reinstatement form and questionnaires Section 5--Systems

26. Reinstatement Bonus • Bonus is 25% of the annualized premium. If case is in first-year an advance is given to the agent and charged to their account. If the case is in sub-year, a bonus is given to the agent and the company is charged. • Must be life case recoded to a different agent on bank draft with all back premiums collected. • Applicant check required from account being drafted. • We will allow returned items and lapses to count as eligible cases. • Case can only qualify one time – we will create a database of policies where the bonus/advance was paid out and monitor so we don’t pay on any one case more than once. • If a case is reinstated and lapses – we will not chargeback, but it will not count for bonus a second time. Section 5--Systems

27. ReinstatementsAccountability: Spread your systems throughout • Have your agents and managers account daily for reinstatements • Submit a weekly report on reinstatements (accountability) • Forward your team a weekly and monthly report for totals • Promote the reinstatement Bonus • Recognize the agents collecting a higher weekly bonus due to high quality • 19.5% versus 15.0% Section 5--Systems

28. MGA Reinstatement Report-- one week Section 5--Systems

29. Reinstatement Production Log Section 5--Systems

30. Reinstatement Comparison 2011 versus 2010 Section 5--Systems

31. Reinstatement Comparison 2011 versus 2010 Section 5--Systems

32. Reinstatement Comparison 2011 versus 2010 Section 5--Systems

33. Top ReinstatementAgencies Section 5--Systems

34. AgencyReinstatementImprovements Section 5--Systems

35. Top reinstatements, December 2011 Section 5--Systems

36. Weekly Section Weekly Production Report of Field Numbers Copy of Transmittal (Until Verified) Advance Report (Until All Policies are Accounted For) Monthly Section P & P Reports Retention Report Ledger Statements Charge Summary Financial Analysis Service Section Updated Service Log Oral Exam Needed Wednesday Bulletin Exam Notices Rated and Amended Policies Returned Items/Bank Problems 40 Day Notices Conversion (Age 21, 10 YR R&C, GIO) Messages Replacement Notices Outstanding Summary Sheets (Until Policy is Issued) Reverse Chronological Order, oldest on top Archived Summary Sheets (Separate Binder/File) Alphabetical Order Training/SystemMoney Book Section 5--Systems

37. Section 5--Systems

38. Monitor what matters Do it yourself It will pay off. Section 5--Systems

39. Recap • New SGA’s can establish a culture of quality by starting from a clean slate • Established SGA’s can instill a culture of quality by focusing on the new agents and new leaders • Personally Invest the time to develop a culture of quality both with attitude and systems • Set quality as a priority in your agency especially with your MGAs “People will rise consistently to the level of expectation that you have for them, you can bet on it.” Section 5--Systems