JUNE 2012 Protect Your Members in a Difficult Economy THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT Proprietary & Confidential www.affinion.com 1 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
What I’ll cover. . . 2 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
State of the Economy 1 3 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
State of the Economy 1 2 Insurance Research 4 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
State of the Economy Member Opportunity 1 2 3 Insurance Research 5 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
State of the Economy Member Opportunity 1 2 3 4 Insurance Research Conclusion 6 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
State of the Economy 1 7 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Consumer confidence is slowly improving 8 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Self- Reported Spending “Yesterday” is in line with the 2011 holiday season 9 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
The unemployment rate continues to be elevated 8.2% unemployment rate in May, 2012. Almost half of those unemployed were considered “long term” unemployed (out of work for more than 27 weeks). 23.7 million Americans are either unemployed or underemployed. 10 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com Sources: Bureau of Labor Statistics, June 2012 Reuters
State of the Economy 1 2 Insurance Research 11 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Question: If you were to lose your job, how long would you have access to affordable insurance? All survey Survey participants participants under age 34 10% Less than one month 11% Less than one month 8% One to two months 33% 7% 30% One to two months two to six months 8% two to six months more than 6 months 13% more than 6 months I would not have 19% access to afforable I would not have insurance access to afforable I don't know insurance 14% I don't know 22% 25% More than 50% of respondents believe Only 14% of those surveyed under age 34 that they could be at risk for losing their believed they would have access to insurance health benefits and life insurance should for more than 6 months they ultimately lose their job * the numbers above represent the results of more than 1,000 self-selected participants for a nonscientific survey commissioned by the Affinion Group and conducted by Greenfield Online 12 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Question: If you were in an accident or killed, how concerned are you that your loved ones would be financially vulnerable? 25% 26% Extremely Concerned Concerned Slightly Concerned Not at all concerned 22% 27% * The numbers above represent the results of more than 1,000 self-selected participants for a survey commissioned by the Affinion Group and conducted by Greenfield Online 13 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Question: Over the past 12 months, how often would you have considered yourself to be living “paycheck -to- paycheck”? 21% 37% Always Often Infrequently 17% Never 25% * the numbers above represent the results of more than 1,000 self-selected participants for a nonscientific survey commissioned by the Affinion Group and conducted by Greenfield Online 14 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Question: If you were to have an accident that required hospitalization and the cost was more than your insurance would cover, which of these ranges of uninsured loss (out of pocket cost) would represent a severe impact to your financial stability? 18% 37% 45% of respondents believed that an out-of-pocket cost of as little as $500 would have a severe impact on their financial stability 14% Under $100 $100-$250 $250-$500 13% 18% $500-$1,000 $1,000 and greater * the numbers above represent the results of more than 1,000 self-selected participants for a nonscientific survey commissioned by the Affinion Group and conducted by Greenfield Online 15 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
State of the Economy Member Opportunity 1 2 3 Insurance Research 16 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
17 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
How does the average consumer spend money? 34% Housing 11% Insurance Average U.S. Consumer 16% 13% Transportation Food Source: Consumer Expenditure Survey, U.S. Bureau of Labor Statistics, 2011 18 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Opportunity Insurance is Service for credit the 4 th largest Industry unions to fill consumer in the Increases expenditure insurance gap 19 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Question: How much more would you expect to pay for $100,000 of annual term life insurance coverage vs. $100,000 of group Accidental Death and Dismemberment insurance? 25% 28% Only 25% of respondents understood the cost savings that can be offered by having a less costly alternative group Accidental Death Less than $25 and Dismemberment plan Between $25 and $50 Between $50 and $75 More than $75 17% 30% * the numbers above represent the results of more than 1,000 self-selected participants for a nonscientific survey commissioned by the Affinion Group and conducted by Greenfield Online 20 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Since 2005 , Affinion’s credit union insurance block has grown by over 26% - from $132 million in billable premium in 2005 to over $167 million in 2011 Insurance continues to have marketplace relevance with credit union members. 21 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Credit Unions can provide hope for members in a time of reduced access In the group market, the spike in unemployment diminished the number of individuals who qualify for life and disability benefits through their employers. Over the next five years, per capita consumer disposable income is expected to rise at a 2.3% average annual rate, which should generally boost the purchasing of AD&D insurance. Source: AD&D Insurance Industry Report, IBISWorld 22 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
AD&D-Credit Union: Program Description • Program Description • Marketing Considerations • Covers insured for loss of life, limb, sight, speech or • Guaranteed issue • hearing due to covered accident • Bilingual Marketing Available 1 – $1,000 no-cost offer • Underwritten by The Hartford Standard “non - expiring” Basic • Two Marketing segments – $25,000 to $300,000 supplemental coverage – Uninsured – Individual and Family coverage available – Insured – Benefit Statement Mailing – Underwritten by The Hartford • Account Types • Share and Share Draft Accounts • Customer Benefits • State Restrictions • Affordable supplemental coverage • Marketing is unavailable in ND and VT. • Guaranteed Acceptance coverage: no medical exam or • 1 Bilingual Marketing is unavailable in AK, CA, FL, PR, VT, • questionnaire • and ND. • Core Supplemental Offering: Common Carrier, Anti- • inflation, Educational Assistance, Day Care, and • Hospital Indemnity. Monthly Pricing* Individual Plan: $1.00/ $10,000 Family Plan: $1.50/ $10,000 * Rates may vary by state 23 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
AD&D Summary - Minnesota Life Accidental Death and Dismemberment (AD&D) Guaranteed insurance, also known as the Customer Appreciation Program (CAP) The program offers consumers a gift of $1,000 insurance at no cost to them; the premium is paid by the client Consumer also have the option of purchasing additional insurance in the amount of $25,000 to $300,000 supplemental coverage Underwritten by Minnesota Life The AD&D program touches approximately 60 million consumers by mail each year, and we currently insure more than 35 million people with this product alone 24 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
Client Case Study: Insurance Head-to-Head Test Client: One of the largest financial institutions in the U.S. Client Need: To ensure that it was providing its customers with the best possible program, and to maximize its own return on investment, this client wanted Affinion to compete in a head-to-head test with another insurance marketer using comparable AD&D programs Business Results: … and our premium purchase Despite getting approximately … which generated nearly half the gross leads as the response rates were nearly 5x 10x more in annualized competitor, we selected 74% greater than the premium for the client competitor’s… more names to mail… # of Names % $s Leads Received Amount Mailed 54% penetration 16% penetration Competitor Affinion Competitor Affinion Competitor Affinion 25 THE GLOBAL LEADER IN LOYALTY & CUSTOMER ENGAGEMENT www.affinion.com
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