Indianapolis Life. Insurance Company. The Balanced Scorecard Indianapolis Life Insurance Company The Balanced Scorecard Phase I Management Presentation February 5, 1999 e

Agenda What has been Accomplished? Recommended Path Forward Enterprise Level Scorecard Tier II Scorecard Recommended Path Forward Transition Plan Immediate Next Steps Printed on: 1/11/2019

The Balanced Scorecard Process Our focus during Phase I has been in measurement definition (Enterprise & Tier II) and in the development of a prototype manual reporting system Measurement Definition : Process Strategic Individual 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? Improvement Portfolio Quick Continuous Focus Re-engineer Printed on: 1/11/2019 5

Critical Success Factor Relationships To be an innovative, growing, high performance, public financial services enterprise that makes the future better for all our stakeholders. Objectives: Win through people, Grow profitably, Create value Financial Perspective Earnings growth Unleveraged GAAP ROE Risk Based Capital Capital plan Product Mix Distribution Mix Customer Perspective Rating within Peer Group Customer Satisfaction Producer and Policyholder Retention Sales vs. Plan (Sales Variance) Policies under Administration Internal Process Perspective Growth in Target Markets Expense to Premium Ratio Expense to Average Assets Ratio Technology ROI Learning & Growth Personal Development Plans Completed Incentive Alignment Employee Satisfaction Leadership Strength Employee ROI Change Initiative Status Printed on: 1/11/2019

Tier II Scorecards The objectives of the Tier II pilot scorecards were to: 1) Pilot and validate a “drilldown” approach for developing Tier II scorecards that are aligned with the enterprise 2) Identify Tier II objectives, critical success factors and measures 3) Determine next steps in the Tier II scorecard development Printed on: 1/11/2019

Cascading & Aligning Scorecards Scorecards are cascaded and aligned through the critical success factors Enterprise Critical Success Factors (CSF’s) Enterprise Strategies Enterprise Measures Enterprise Portfolio & Process Objectives Portfolio & Process CSF’s Portfolio & Process Measures Tier II* Tier IIa Goals Tier IIa CSF’s Tier IIa Measures Tier IIa Linkage Alignment *Tier II currently contains: Product-Market Portfolios (Financial Protection & Wealth Accumulation), Business Process Outsourcing, Customer Care (Operations and Distribution), Shared Services and Financial. Tier IIA currently encompasses products (Term UL, WL, VUL, Annuity) Printed on: 1/11/2019

Enterprise -- Tier II Mapping Identify enterprise critical success factors that may be influenced at the Tier II level Draft * * Sample ** ** * New market development & increasing value to existing customers ** Customer refers to internal customers: operations & distribution High Level of Influence Lower Level of Influence Printed on: 1/11/2019

Establishing Tier II Objectives Draft Enterprise critical success factors that are “highly influencable” become “Tier II” objectives… additionally, there may be other objectives which are aligned with the enterprise scorecard Product-Market Portfolio Objectives: 1) Meet portfolio ROE and earnings growth goals 2) Ensure capital plans are in place for new products and that products are built with assumptions that the organization can support 3) Develop products that deliver value and are aligned to target customer segments 4) Identify and develop new markets and increase value to existing customers 5) Win through people Product-Market Balanced Scorecard Printed on: 1/11/2019

Product-Market Balanced Scorecard Identify Tier II critical success factors and key performance indicators for the objectives Draft Product-Market Portfolio Objectives: 1) Meet portfolio ROE and earnings growth goals 2) Ensure capital plans are in place for new products and that products are built with assumptions that the organization can support 3) Develop products that deliver value and are aligned to target customer segments 4) Identify and develop new markets and increase value to existing customers 5) Win through people Printed on: 1/11/2019

Set Targets and Identify Tactics to Reach Targets Each measure should have a target (short term and long term) and an identified initiative/tactic to bridge the performance gap (current performance - target performance) Printed on: 1/11/2019

Transition Plan - Deployment Principles Roles and Responsibilities Development accountability lies with the respective areas Participants include future scorecard owner and his or her direct reports, and internal and external customers Participants from Indianapolis Life and AUL Project Team comprised of and led by key employees in the respective area Trained Balanced Scorecard team provides training, support and templates Oversight steering committee to ensure alignment (vertical and horizontal) Method and Approach Standardized method Pre-workshop interviews, a workshop and the assignment of a scorecard “owner” in the area Knowledge reuse* A scorecard “logic” aligned with AUL affiliation plans and design team implementation recommendations “KISS” * Knowledge reuse refers to scorecard design templates, measurement dictionaries with definitions and data source, and output reports Printed on: 1/11/2019

Potential Project Structure A Balanced Scorecard Steering Committee would be part of an overall Indianapolis Life Program Management Steering Committee Steering committee members providing: Coordination with other initiatives Ensure horizontal and vertical alignment Project management oversight Responsible for trained balanced scorecard team resources Comprised of AUL and Indianapolis Life personnel Trained resources to assist in scorecard development. Interviewing & Facilitating Scorecard development packages Maintain measurement dictionaries Day-to-Day project management Indianapolis Life & AUL Printed on: 1/11/2019

Scorecard Logic Determining which areas and “who” will have a scorecard is dependent on the organizational roles and structure. Follows proposed organization redesign Portfolio and product scorecards (Tier II Product-Market and Tier IIA) focus on new product development, maintenance of existing products and portfolio and product profitability - excludes core operational and distribution related measures Printed on: 1/11/2019

High Level Implementation Plan Denotes work completed Printed on: 1/11/2019

Enterprise Scorecard Next Steps Develop Missing Measures Measure Owners Assign Measure Owners Larry Prible Set Targets Measure Owners Respond to questions regarding their measures Measure Owners Create Data Gathering Forms Scorecard Team Receive Data from Measure Owners Scorecard Team Publish Scorecard Report Scorecard Team Implement Scorecard System to Support Future Scorecards and Automate Data Gathering Build Awareness through Communication & Education Printed on: 1/11/2019