Irish Life Retail Denis Casey, CEO. Irish Life Retail zMarket Overview zRetail Business Profile zHorizon Transformation Programme.

Irish Life Retail

Denis Casey, CEO

Irish Life Retail

Market Overview

Retail Business Profile

Horizon Transformation Programme

Market OverviewRetail Life and Pension sales have

grown strongly over the last 4 years

C.A.G.R.

20%

27%

C.A.G.R.

20%

27%

1998

€m

408

1,647

1998

€m

408

1,647

1999

€m

462

2,587

1999

€m

462

2,587

2000

€m

552

3,550

2000

€m

552

3,550

2001

€m

707

3,418

2001

€m

707

3,418 Regular

Single

Regular

Single

23%23%563563 721721 907907 1,0491,049 APE APE

Market Overview

Favourable demographics

Sound economy

Public policy support for private pensions

Shift in savings pattern

Medium term outlook remains favourable

Market Overview

Company

Irish LifeArk LifeLifetime*Hibernian (CGNU)Canada LifeNew Ireland*Standard LifeEagle StarFriends FirstScottish ProvidentRoyal Liver

2001Market Share

17.5%17.1%12.7%12.3%9.2%6.9%6.6%5.2%5.1%2.0%2.0%

Distribution Method

Bancassurance IFA DSFBancassuranceBancassuranceIFAIFA DSFIFA DSFIFAIFA Tied AgentsIFA First ActiveIFADSF IFA

* part of the Bank of Ireland Group

The rise and rise of bancassurance now 40% of the market

Consolidation Big 4 now control 66% of market

Margin Pressure Competition Consumer / Media attention Government : Price capped pensions (PRSA)

Market Overview - Trends

Irish life Retail

Outperforming a Buoyant Market

* 2001 sales exclude Government SSIA contribution

C.A.G.R.

31%

25%

C.A.G.R.

31%

25%

1998

€m

56

303

1998

€m

56

303

1999

€m

67

460

1999

€m

67

460

2000

€m

85

747

2000

€m

85

747

2001

€m

* 125

593

2001

€m

* 125

593 Regular

Single

Regular

Single

29%29%8686 115115 160160 184184 APE APE

Irish life Retail

Multi-Channel : Significant shift in Distribution Mix

20012001

20002000

19991999

Bancassurance IFA DSF Partnerships

20022002(est.)(est.)

35%

9%

9%

16%

9%

33%

31%

42%16% 26%

26%

29%

25%

29%

18% 45%

DSF : Problem Child to Poster Child Distribution

Poor productivity, low moraleWeak management (processes & people)Concerns about qualityNew business unprofitable

16 week industrial relations disputeFundamental overhaul of salesforce - “Poor Die”

Rigorous and relentless management processes operateProductivity trebled over 4 yearsTargets exceeded for each of last 4 yearsNew business profitableHome Service disposal February 2002

2002:

1997:

Intervention:

Brokerage : A time of Upheaval

Broker business restructured following 1999 Progressive Life merger

New faces - renewed focus and enthusiasm

Plugged Product gaps investment manager choice (e.g. Fidelity) With Profit bond (Winterthur-Credit Suisse)

Some rationalisation of broker numbers inevitable as changing regulations impact

Will remain the gateway to High Net Worth customers

Franchise offering launched in 2001

Bancassurance : The Rising Star

Fastest growing and most profitable distribution channel Success Factors

Fully integrated with bank structure Core bank activity MIS and reward systems share and acknowledge success Leveraging resource base

- 800 counter staff licensed for “simple product” sales - Consultants focus on high ticket sales

Deployed lifeco sales management practices/know-how Attractive, simple products Prescriptive sales and advice processes to overcome branch

staff confidence issues

Branch Savings & Investment Planner

Advantages of Multi Channel Approach

Reach- access to all customer/product segments

Flexibility - to grasp opportunities

Choice - for our customers

Synergy - sharing knowledge & expertise across channels

Scale - through aggregation

The next Phase in the Journey

Irish Life Retail

Product Development & Underwriting

Enablers : HR, Finance, IT

SalesProcess

TransactionProcessing

CustomerRelationship

Mgt

DistributionChannel

Mgt

A radical programme to transform Retail into a world class life assurer

Sales Process

A strength often over-played by life companies Over emphasise the sale - poor ongoing relationship mgt History of inappropriate product sales All art, no science - huge seller failure rate

Prescriptive technology based sales/advice process (Siebel)

Selling :

Sales Process

A strength often over-played by life companies Over emphasise the sale - poor ongoing relationship mgt History of inappropriate product sales All art, no science - huge seller failure rate

Prescriptive technology based sales/advice process (Siebel)

Predictable outcome, consistent experience

Engaging and value adding for customers

Value creating for Irish Life - size, quality of sale

Targeting seller productivity of €250,000 per capita

100% usage by controlled channels by year end

Selling :

Transaction Processing

Creates cost and friction - adds no value Weakness in most life companies Irish Life no exception

Acquired the expertise / know how Standardisation & Simplification - the new religion Joined up technology Plan Replacement of back office systems New business underwritten and accepted at Point of Sale State of the Art web-enabled technology

Transaction Processing

Creates cost and friction - adds no value Weakness in most life companies Irish Life no exception

Acquired the expertise / know how Standardisation & Simplification - the new religion Joined up technology Plan Replacement of back office systems New business underwritten and accepted at Point of Sale Reduce new business processing costs by 66% Reduce inforce processing costs by 50% Stripping out layers of “follow on” costs

Customer Relationship Mgt

Traditionally the customer has no voice in a distribution dominated industry

Little real attention paid to customer satisfaction and customer retention

Horizon delivers a radical improvement in our customer experience: - advice process - new business acceptance - ongoing relationship management New remote call centre established for inbound and outbound calls - centre of excellence Siebel platform supports annual customer contact & review Pay linked to customer experience/satisfaction

Distribution Management

Traditional life company model - “hero worship” Focus on outputs - no measurement of inputs Over reliance on a single management lever - €

Huge emphasis on process - sales and activity management

“Tacograph” management enabled by Siebel technology platform

Targeting €250,000 per capita salesforce productivity

Re-alignment of remuneration and rewards

Broker segmentation exercise completed

New distribution initiatives : Franchise =

: Worksite =

WORLD CLASSBUSINESS

UNDER CONSTRUCTION