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Introduction: Facts at a Glance • Adrea Rubin begins career with the DMA in 1974 • Adrea Rubin joins Direct Media in 1976. In her 14-year tenure: • she opened New York office; • became only female shareholder and board member at DMI; • was Salesperson of the Year 1988-1990.
• Adrea Rubin Marketing, Inc. established 1990: • 100% of client base joins her on her new venture • Adrea Rubin Management, Inc. established 1992: • 17 million name premier insurance database (Colonial Penn) • Beginning with Colonial Penn and AARP in the early
1970s, we have partnered with 18 major insurance direct marketers
• Affiliations include the DMA, DMA List Leaders Board, DMA Fast Forward Board, DMA Financial Services Council, DMA Catalog Council, DMA Insert Media Council, P-DMA, Dallas/Ft. Worth DMA 2

Introduction: Marketing Services Adrea Rubin Marketing, Inc. incorporates knowledge of the competitive insurance marketplace, trends in direct marketing and current economic conditions to provide list recommendations, marketing and creative messaging suggestions and strategic planning. • • • • • • • • • We provide a variety of services to our direct marketing clients, including: Data acquisition Data re-segmentation and revitalization Modeling and analytics Creative/messaging consultation E-marketing solutions Insert media Trigger event marketing programs Multicultural marketing solutions Partnership programs 3

Introduction: Audience Survey • • Do you buy data?
Where do you buy your data?
• Credit bureaus • Primary-source compiler • List vendor/data broker • Online • • • • Partnerships/third party deals Do you use one source, or multiple sources?
Do you buy leads for agents or for DTC campaigns?
What products do you offer?
• P & C • Life • • • • Health Are your DTC efforts one- or two-step?
Do you utilize a call center to upsell and cross sell products?
What are your growth plans for 2010: increase, decrease, or flat?
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Introduction: General Format
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Stats: Understanding the D etails • As of 9-17-09 on the US Census Population clock, there are: • 307 million individuals; • 129 million households; • The US gains one new person every ten seconds.
Life Insurance Statistics
• • 68 Million adults in U.S. do not have life insurance.
Over 70% of the life insurance policies sold today are cash value policies.
• Seniors sold life insurance policies with a face value of $11.8 billion last year, almost double the value of policies sold just two years earlier, according to the U.S. Senate's special committee on aging. Seniors battered by the tough economy are selling their life insurance policies to replenish their retirement nest eggs.
• The number of uninsured children in 2007 was 8.1 million, or 10.7% of all children in the U.S.
SPEAKER OPINION
Consumers in lower economic groups do not differentiate between primary, supplemental, and discount plans
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Stats: Understanding the D etails
Property and Casualty Insurance Statistics
• The Insurance Research Council predicts that the nationwide rate of uninsured drivers could jump to 16 percent by 2010, because of the sour economy.
• The number of uninsured and underinsured motorists is closely linked to unemployment rates. • The nation can expect to see more uninsured motorists because of the tougher economy.
SPEAKER OPINION
Expect to see increase in premiums in proportion to uninsured drivers to cover against accidents with uninsured motorists
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Stats: Understanding the D etails
Health Care Insurance Statistics
• • 45.7 million Americans do not have health insurance.
• As of 2007, approximately 30% of all companies with 100 employees or fewer eliminated medical coverage in the last five years.
100,000 families went bankrupt in 2008 as a result of cancer: • Seven million working age Americans struggled to pay medical bills due to cancer in 2007; • Many of these families had health insurance, but the costs for treatment were not fully covered by their existing policies. • Current health care reforms are planning for $1.6 trillion in new federal resources over the next ten years: • Even with these changes, approximately 30 million individuals will still be uninsured.
• For every one American without health insurance, there are three without dental insurance.
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Stats: Understanding the D etails
Health Care Insurance Statistics
• Health care costs make up one-fifth of the nation’s economy.
• Online studies have shown that eight out of ten older Americans have at least one chronic problem: • • A survey of Medicare D participants shows that 50% take an average of eight or more prescriptions regularly; • Senior illnesses include arthritis, chronic pain, diabetes, menopause, Alzheimer’s, weight gain, glaucoma, cataracts, and depression.
Over 44 million Americans are caregivers for either a parent or a spouse.
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Stats: Understanding the D etails
Health Care Insurance Statistics
• Americans are putting off health care and facing increasing dissatisfaction: • Families relied on home remedies and over-the-counter medications instead of going to the doctor about 35 percent of the time, and they skipped visits to the dentist 34 percent of the time. • Comparison shopping for the best pricing on doctors' fees, prescription medication prices or health insurance plans. • Consumers also showed an interest in innovations that potentially lower costs and offer greater convenience: • Walk-in primary care clinics in drug stores; • Medical tourism (high-quality, relatively inexpensive medical procedures obtained abroad); • Web-based medical services (often referred to as e-visits). • 94 percent of respondents said they believe health-care costs threaten their own financial security.
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Stats: Understanding the D etails
Senior Statistics
• • • • 50% of Americans will need Long Term Care during their lifetime 70% chance of one partner will need LTC for couples over age 65 50% chance of one partner living to age 92 if both spouses are alive at age 65 25% increase in this decade of multiple generation households: • Caused by higher housing costs, ailing parents, financial constraints including massive job layoffs, home foreclosures and dwindling retirement income • More than 10% of adults age 50+ live with their grandchildren or their parents • People who are older or have pre-existing medical conditions often find that insurance premiums are unaffordable — if they can get coverage at all.
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Messaging: Applying the D etails SPEAKER OPINION
The preceding statistics provide the direction for your messaging components
The success of any campaign depends on the connection between the consumers and the message and quality of the data.
• • If you use DTC promotions, the mail piece becomes the company agent and needs to sell the value and benefits of the product without any other communication.
Direct mail stimulates response across other channels: • • Consumers who receive direct mail solicitation may chose other response vehicles: e.g. online, call center.
• If you use an agent, the agent’s salesmanship is crucial to closing the sale. The data purchased will never replace the people skills of the person, but will enhance the chances of closing.
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Messaging: Applying the D etails
Key consumer benefits for buying direct
• • • • • • • Strong, dependable brand (include A.M. Best rating) Competitive rates/benefits Policy is easy to understand Company has financial stability Insurance carrier pays claims promptly and fairly Honest, trustworthy customer service representatives No pressure from agent to purchase product The consumer needs to understand why they should not wait for the health care reforms and why it is beneficial to purchase coverage today. • • • • • • Traditionally, the best-performing insurance packages convey the following points: Unique selling proposition Fear as a motivator Sense of urgency Statistics and specifics Personalization Official looking package 14

Messaging: Applying the D etails SPEAKER OPINION
Aflac has launched a multi-media campaign with a focus on brand and product awareness. The tagline is ‘Get the Aflacts’
Space ads have appeared in publications such as USA Today and People Magazine. Even though the Aflac products are sold through agents, and not direct-to-consumer, the brand and advisory role are appealing to consumers. 15

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Messaging: Applying the D etails • Give the consumer a choice: • Communicate with potential policy holders in the same manner they are accustomed to, whether that is via direct mail, telemarketing, or online.
• Let the consumer choose how they interact with you: • More than 80% of Americans now have a computer in their homes with internet access; • • The East South Central region (Alabama, Mississippi, Tennessee and Kentucky) has the highest number of households with no internet access – 26%; Internet access is lowest: • Hispanic and African-American households; • Households where the head of household has not completed high school. • Let the consumer choose how/when they pay.
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Messaging: Applying the D etails • Younger generations embrace the internet more than their older counterparts.
• Consumers who receive a direct mail package may use the internet as an additional information source before responding to the offer; • Embrace an advisory tone and speak to the consumers like a trusted friend. SPEAKER OPINION
Good examples of advisory websites include New York Life and MetLife
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Messaging: Applying the D etails • • • • Insurance has traditionally been an imitated product. Standard package includes: Official-looking outer envelope Copy-heavy letter Traditional application Buck slip with benefits/disclaimers SPEAKER OPINION
Innovate – do not emulate. Stand out from the competition
• • • • • Majority of direct-to-consumer insurance buyers are: Female Older ages Income Under $50,000 Purchasers of supplemental policies Under-insured 19

Messaging: Applying the D etails • • • Non-traditional direct mail insurance products reach a different audience: Younger ages More educated Higher level of affluence • Income • • • Net worth Male Own multiple financial services products 20

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Messaging: Applying the D etails SPEAKER OPINION
Speak to each group separately based on characteristics
• • • • Baby Boomer population should be further segmented based on age; 20 year age span between oldest and youngest of generation; Individuals age 50-64 do not like to be called ‘seniors’; Age 65+ is when people acknowledge senior citizen status.
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Messaging: Applying the D etails
Example of how to address target population – Baby Boomers
• Be aware of chronological age vs. cognitive age: • Seniors are no longer blue hair, polyester pants, early bird dinner specials.
• Don’t sell to Baby Boomers – let them arrive at their own decisions with guidance and support: • Provide empowering tools that illustrate cost savings and convenience; • Build communities that offer peer support and sharing opportunities.
• Baby Boomer generation is selectable through demographic and psychographic characteristics on traditional mail order files as well as aggregated databases.
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Messaging: Applying the D etails
Example of how to address target population – Baby Boomers
• Age band specific creative messaging is important for these different age groups: • Youngest baby boomers (born in 1964) are turning 45 this year; • If the initial experience is positive, the individual will stay with you throughout their insurance purchasing life cycle.
• The age group of 70+ is expected to increase in size as the Baby Boomers get older. This aging of America has a great impact on today’s seniors: • Longer life spans will create new product opportunities.
SPEAKER OPINION
Will the aging of America affect guarantee issued policies?
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Messaging: Applying the D etails • • • Insurance Direct Marketing is unlike any other Direct-to-Consumer product, including merchandise, catalogs, and fundraisers: Products are selling protection.
Everyone needs insurance, no one likes to talk about insurance.
Creative messaging should specify the benefits of the product.
SPEAKER OPINION
Consumers should be offered non-insurance benefits, such as health discount plans, ID theft, and/or premiums such as membership cards, gift cards, notepads, etc.
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Messaging: Applying the D etails
Brand messaging is important
• • Testimonials are important.
• Speak to the consumer as a member of the same peer group, not as the product manager.
Appeal to emotions.
SPEAKER OPINION
Signature should reflect gender of the target audience: e.g. add a female signature for a female product: Jane Smith Vice President mother of three grandmother of five
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Messaging: Applying the D etails
Survey customers – focus group, call center
• • • • • What part of the offer, creative, product appeals to them?
What made them respond to this offer? What made them want this product?
What made them lapse or switch carriers?
Expand on these answers and tailor the creative to these issues and behaviors: • e.g. Progressive – pet insurance rider; • e.g. AARP partners – offering coverage that includes cosmetic surgeries: Lasik vision, to reach more affluent sector.
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Messaging: Applying the D etails SPEAKER OPINION
During these difficult economic times, we suggest that the creative be relevant in the messaging and stress the value of our products
• We have seen changes in creative from a variety of sectors that acknowledges the financial hardships consumers, especially those with lower incomes, may be encountering. • This has been added to mail pieces in the form of a buck slip, a message on the outer envelope or a wrap on the cover page of a catalog.
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Do You Know Your Data Source?
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Data: Implementing the D etails Total number of data files available: 57,000+ SPEAKER OPINION
Number of available data files that are relevant to insurance offers: under 1,000
Examples of categories that work well for insurance: Auto Insurance Data Co-op Databases Credit-Needy Credit/ZIP+4 Aggregated Data Donors Health Home owners In-House Credit Internet-Generated Models New Movers Self-reported/Survey Sweepstakes/Opportunity Seekers Transactional data TV-Generated 30

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Data: Implementing the D etails
Segmentation criteria
• • • • •
R
ecency of Data – when did the transaction occur?
F
requency of Data – how often does the transaction occur?
• • •
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onetary investment – what cost did the customer pay during transaction? (average order vs. lifetime purchases) Method of payment – credit card, cash/check/money order, deferred billing Method of response – telephone, online or direct mail (call, click or write) Source of names – what was the transaction?
Geography – where do the customers reside?
Single vs. Multi-buyers: • One-time buyers vs. multiple transactors • • • Each list source defines multibuyers differently Gender Demographics: age, income, etc.
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Data: Implementing the D etails
Types of files
• Credit data • Generated from credit bureau data: • • Offer must have FCRA compliance paragraph.
Transactional Databases • Generated from a large number of similar files to provide a greater level of data : • • e.g. Catalog co-op databases that consist of 1,400 participants (Nextaction/Action Network).
Compiled/Aggregated files • Generated from public sources including phone books, deed information, directories, courthouse records.
• Data includes demographics and lifestyle data: • Primary-source compilers (e.g. Acxiom, Experian, Epsilon); • Data resellers (e.g. Focus USA).
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Data: Implementing the D etails Trigger Messaging: Trigger data and intend-to data has the most value when the event has occurred within 30 days or less. Examples include: • Auto Loan Holders • Divorced-representing 22 million prospects • Equity Refinance Holders • First-time Credit Card Issues • New Births (4 million prospects)/First Births • New Movers • Homeowner vs. renter; • Inter/intrastate movers.
• New/Used Car Buyers/Leases (make/model) • Newlyweds • ‘No Presence of Credit Card’ Consumers • Prenatal 41

Data: Implementing the D etails • Demographic/Psychographic • Adjust rate mortgage holders • African-Americans: representing 1.7 million prospects in a 12-month period • Apartment Dwellers: representing 34 million prospects • Gamblers: representing 14 million prospects • Hispanics: representing 2.6 million prospects in a 12-month period • Length of Residence • Look-alike new issues • No presence of credit card consumers • Online shoppers • Singles • Single parents: •13.8 million children (23%) under15 live with single mothers, compared to 2.7 million (5%) who live with single fathers.
• Working mothers: • 30 million mothers work outside of the home. This represents two out of three mothers. 42

Data: Implementing the D etails
Process for Selecting Data / Segmentation
• Current policy holder demographics • Age • Income • Gender • Household composition • Geographic skew • • Lifestyle interests/behaviors Goal of the campaign • Lead generation • Upsell/cross-sell • Reactivation 43

Data: Implementing the D etails
Process for Selecting Data / Segmentation
• Review competition • Creative • Offer • Rates • Benefits • Target audience • Data usage • • Brand Message Outside influences • Economy • Seasonality 44

Data: Implementing the D etails • Models can be utilized to optimize the performance for each of these variables: • Clustering is important but not should be the only method of segmentation (e.g. Experian-TrueTouch); • Cluster segmentation based on: • Lifestyles/Interests • Behaviors/Attitudes • Demographic snapshot • Socio-economic indicators • Each data provider manipulates the data differently, providing different products and segmentation. • Each database should provide approximately 20% unique name value. 45

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Data: Implementing the D etails SPEAKER OPINION
We do not advocate that our clients use a single source data provider
• The more narrow the target, the less likely it is available in a list • e.g. social security numbers • Beware of sources of names – critical to understand the company and source of the names. Know your data provider!
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Data: Implementing the D etails
Best data utilization practices
• Research: • Source of names • Part of list family • • Company selling data Look at direct mail piece, magazine, catalog, URL: • Changes in customer profile in last 12 months • Changes in source mix • Customer reactivation strategy • Seasonality of file • • Method of payment: cash vs. credit/type of credit card Understand file hygiene – update cycle, NCOA, ZIP+4 48

Data: Implementing the D etails
Best data utilization practices
• Profile of customer: • Average order • • Gender Review duplication rates between files • • • • • • • • Cannot predetermine duplication rates before the merge Availability of email addresses Availability of telemarketing Mail volume/prospecting plans Modeling and analytics Incentives/promotions/sweepstakes Data enhancements Primary-source compiler/reseller 49

Data: Implementing the D etails
Mail order buyer data vs. aggregated data
• • Mail order buyer data, regardless of economic conditions, stays consistent with measurable ROI based on the transactional activities. • Mail order buyers show a greater brand loyalty and have a longer lifetime value than leads generated from a compiled database. • Consumers who have made a mail order or online transaction are more likely to repeat this behavior within a short time frame than a consumer who has been identified only through propensity models from a compiled database. Database names are not based on recency: • Hotline transaction captured by mail order generated files should improve the responsiveness of the individual record. SPEAKER OPINION
Mail order files used alone may not outperform the data from aggregated databases, depending on the type of insurance offered
• • Multiple transactions for each record between the mail order and database names will improve the overall results of the acquisition programs. Mail order activity associated with these files will enrich the data.
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Data: Implementing the D etails
2010 Census
• 12-18 months for new data to be incorporated in databases • The following states are expected to show significant growth in their overall population: Arizona, Florida, Georgia, Nevada, Texas and Utah. • Populations are expected to decline in Illinois, Pennsylvania, Michigan, Massachusetts and Missouri. The population shifts may affect response rates by state.
Models
• Economy has changed how consumers are allocating their income on living expenses and disposable income purchases.
• Refresh model builds to account for the following changes • Economy • Purchasing trends • Aging of America • Underbanked • Should be refreshed every two years 51

Data: Implementing the D etails • New / Growth list categories in last 12 months: • Health ailments • Insurance purchase propensity • Online transactions • Credit oriented • Other media for acquiring policyholders: • Personalized URLs (pURLs) 52

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Data: Implementing the D etails • Alternate Media: • Package Insert Programs: Freestanding advertising pieces placed in the packages that are delivered to customers; • Blow-Ins/Bind-Ins: Freestanding advertising pieces nested/glued into the seams of catalogs or magazines; • Statements: Freestanding inserts placed in the monthly billing statements of other reputable companies; • Ride Along: Freestanding insert placed in envelope mailings to active customers; • Co-ops/Mass Market Mailings/Take-Ones: Grouping of freestanding advertising pieces placed in one envelope; • Newspaper/FSI: Free standing advertising pieces placed inside the pages of a newspaper.
• Online • DRTV, in conjunction with DM, online, call centers, or drive to web 57

Data: Implementing the D etails
Testing Strategy
• • • • Each mailing should consist of 10-20% test.
Test cells should include: Creative Offer Lists Targeting • • Testing is critical in any direct-to-consumer campaign: • Number of tests needs to provide enough opportunity to compare the result of different demographics, recency and list categories.
Include aggregated data vs. mail responsive files.
Determine the balance between high response rates and paid policies: • Mail responsive files yield a greater rate of response; • Aggregated data files have a greater conversion rate to paid policies.
SPEAKER OPINION
Test to continuation ratio should average 20% for a mature mailer and 40% for new offer
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Summary • • The creative is more important than the data. The product is more important than the creative. •
Marry Message and Data
Make sure that the target market is reachable.
• Make sure that the target market will respond to the appeal.
• Expand customer demographics including age and income through list testing and creative changes.
• Lifetime value is equally as important as response, conversion, and annual premium. Prospects are a larger opportunity than a one-product policy holder.
• The contact strategy should revolve around offering these consumers a suite of products. An insurer can be a sole provider for the consumer’s health and life insurance needs. • Create the products for tomorrow based on your customers of today.
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