Distribution Technology…Oxymoron or True Competitive Advantage? Steve Weber Program Director

© 2006 Gartner, Inc. All Rights Reserved. 1 Agenda Current Perceptions What we see in 2006 What has worked

© 2006 Gartner, Inc. All Rights Reserved CIO Survey – Banks and Insurance Top business priority -Attract, retain, grow customer relationships!! Top CIO priority -Deliver projects the enable business growth! Top 3 CIO technologies -Business intelligence, customer sales and service, security enhancement tools

© 2006 Gartner, Inc. All Rights Reserved. 3 Financial Services - CEO Responses Forbes and Gartner, published Jan Attract new customers Bank (2), Insurance (1), Investment (1) -Retain existing customers Bank(1), Insurance (2), Investment (4) -Use information as competitive weapon Banks (7), Insurance (6), Investment (2)

© 2006 Gartner, Inc. All Rights Reserved. 4 Current Perception You are doing important, highly visible stuff!!

© 2006 Gartner, Inc. All Rights Reserved. 5 North American Insurance IT Spending Expected to Grow 3% Annually Through 2009

© 2006 Gartner, Inc. All Rights Reserved. 6 Q: What are your top 3 concerns regarding distributor technology? What Are The Challenges of Supporting a Distribution System for Life Insurers? Source: Gartner study of 64 US insurers, December 2004

© 2006 Gartner, Inc. All Rights Reserved Priorities Distribution technology budgets growing slowly -Shift from build to buy Increased customer facing investments -Both for consumers and producers -Portals to push out account information to drive cross selling

© 2006 Gartner, Inc. All Rights Reserved Priorities Connected/disconnected access to key applications for producers to maximize productivity Better producer measurement and management -Align comp systems/incentives Increasing efforts to make the process for selling bank and life insurance products more transactional

© 2006 Gartner, Inc. All Rights Reserved. 9 Life Insurance Example Most competitors – start with home office - Use proprietary forms - Trying to automate the existing process – not re-engineer - Use too many systems, particularly for BPM/workflow or underwriting, causing higher cost of integration - Dont integrate illustrations in the process Leaders – start with the field - Use standard forms - Totally paperless process - Includes automated underwriting - Single IT platform - Illustrations integrated

© 2006 Gartner, Inc. All Rights Reserved. 10 Areas of Innovation for Annuities CRM, illustration systems allowing wholesalers to more effectively monitor, manage and market to brokers, producers. Linking illustrations into the new business process -Better comparisons to each other and other products Focus on making the appointments process transactional Focus on making commission payments faster/more accurate Electronic signatures and 1035 exchanges

© 2006 Gartner, Inc. All Rights Reserved. 11 Do These Actions Equal Success? NO!

© 2006 Gartner, Inc. All Rights Reserved. 12 What Actually Works Solve six problems at once – not just one or two Act/behave in a true partnership

© 2006 Gartner, Inc. All Rights Reserved. 13 Key to Success – Distribution Technology PeopleProcess Tools What How

© 2006 Gartner, Inc. All Rights Reserved. 14 You Know You Have a Partnership When: You solve the same problems You leverage each others strengths You have the same information You operate as if the glass is half full

© 2006 Gartner, Inc. All Rights Reserved. 15 Partnership (cont) You use the other partys language You provide a safe environment Your commitment to the partnership overrides all else

© 2006 Gartner, Inc. All Rights Reserved. 16 Conclusion What you are doing is very important The opportunities to use customer and other information are endless The technologies exist….dont wait But, success doesnt equal the latest technologies True partnerships do work – if done well

© 2006 Gartner, Inc. All Rights Reserved. 17 Questions?