Mailing Lists of Home Opportunity Seekers

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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
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                                   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




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                                      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




Statistics   Messaging    Data




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                                     Stats: Understanding the Details

• 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,
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supplemental, and discount plans
                                  Stats: Understanding the Details

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.

• Thenumber 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 Details

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 Details
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 Details
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 Details

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 Details

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 Details
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
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• Official looking package
                                    Messaging: Applying the Details
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.




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                                      Messaging: Applying the Details
•   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 Details
• Youngergenerations 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 Details
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




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                                     Messaging: Applying the Details
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




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                                  Messaging: Applying the Details
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 Details
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 Details
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 Details
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 Details
Brand messaging is important

• Testimonialsare 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 Details
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 Details

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 Details
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                Internet-Generated
Co-op Databases                    Models
Credit-Needy                       New Movers
Credit/ZIP+4 Aggregated Data       Self-reported/Survey
Donors                             Sweepstakes/Opportunity Seekers
Health                             Transactional data
Home owners                        TV-Generated
In-House Credit
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                                      Data: Implementing the Details
Segmentation criteria

• Recency of Data – when did the transaction occur?
• Frequency of Data – how often does the transaction occur?
• Monetary 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 Details
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 Details
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


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                                      Data: Implementing the Details
•   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
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            of three mothers.
                                   Data: Implementing the Details
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




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                               Data: Implementing the Details
Process for Selecting Data / Segmentation

• Review competition
    • Creative
    • Offer
    • Rates
    • Benefits
    • Target audience
    • Data usage
    • Brand Message
• Outside influences
    • Economy
    • Seasonality




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                                      Data: Implementing the Details

• 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.




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                                       Data: Implementing the Details

SPEAKER OPINION
We do not advocate that our clients use a single source data provider

• Themore 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 Details
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




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                                   Data: Implementing the Details
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




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                                     Data: Implementing the Details
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 Details
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 Details
•   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)




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                                Data: Implementing the Details

• 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


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                                     Data: Implementing the Details
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%        58
for new offer
                                                                          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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