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BANK INSURANCE

SCORECARD Are you leaving Fee Revenue on the table? (Page 3)

INSIDE...

• Building an Insurance Platform to better serve your clients • Bank Distribution Channel facts & figures 10901 West 84th Terrace, Suite 125, Lenexa, KS 66214

800.592.6684 • http://www.mymip.biz

• Sales opportunities in your financial institution


Fee Income going flat? No financial institution was able to avoid the rEgulation pothole, let alone the other hazardous obstacles and impediments in your path. Your clients are experiencing bumps and detours on their road to financial success, too. Midwest Insurance Partners can make the ride a little smoother by helping you regain some of your fee income. We do this by bringing back the days of full service, which translates into your ability to better serve the insurance needs of your clients.

Please don’t drive and dial or text, but as soon as possible, call us today to pump up your Fee Income.

800.592.6684 PAGE 2

BANK INSURANCE SCORECARD


BANK INSURANCE SCORECARD We share your values and we know your clients... We believe relationships are built on common values. What we value at Midwest Insurance Partners (MIP) are the people with whom and for whom we work. Our experience is financial institutions hold the same values. The community bank and credit union are the backbone of the U.S. economy—the institutions on which the majority of Americans depend for managing their money and investments. The community bank and credit union are there to keep “hard earned” money safe and available for the individual client and make it possible, among other things, for homes and cars to be purchased, business to be transacted, payrolls met and financial goals to become realities. Those who work in banks and credit unions fulfill a sacred trust and a high calling. I find it interesting most branch associates are not aware of the role they play and impact their professionalism, service and kindness has on the wellbeing and success of their clients, neighborhoods, and entire communities (and they thought they were just depositing a paycheck for the lady who lives down the street). At MIP we believe insurance shares the same sacred trust and high calling to tend to the wellbeing and success of our clients. Insurance is best lauded for its contribution to our economy in times of need — our home, car and health come to mind immediately. Insurance has always played an important role in growing and providing income, protecting business, fulfilling the future needs of loved ones left behind and leaving a legacy.

We believe there can be and are great relationships between financial institutions and insurance because of these common values. We think it is time for this relationship to be further explored and utilized for the mutual benefit of our institutions and those with whom and for whom we work. At MIP we stand ready to build a relationship with your community bank or credit union. Our process is to get to know you. Period. Why? Because it is about who we are and what we do. We don’t sell forms, checks, or software, MIP provides services to bank and credit union retail operations enabling the local branch associate to provide life insurance and safe investment alternatives to their clients. We want to build a partnership with your institution based on your business goals and desire to enhance your client relationships. We look forward to meeting you. We will be reaching out to you to make your acquaintance. In the meantime, you are always welcome to reach out to us. Mike Lair Senior Vice President Mike@mymip.com

It’s all about the relationship. BANK INSURANCE SCORECARD

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Banks sell more annuities than other channels... For the last eleven years banks have been the number one source for the purchase of fixed annuities. Is your bank’s annuity sales featured in these statistics? Annuity sales through financial institutions increased nearly 11% in the third quarter of 2011 compared to the comparable period one year ago, according to a new report published by Kehrer-LIMRA, a subsidiary of LIMRA Services, Windsor, Conn., in a summary of results from its monthly bank annuity sales survey.* Another survey from research firm Hearts & Wallets LLC, Hingham, Mass., finds that investors who use an insurer as their primary firm invest nearly 20% of assets in annuities.* The report also found that investors who use a bank as their primary provider invest nearly half of their assets in bank products, such as certificates of deposit, FDIC savings or checking accounts.

Among the report’s other findings: • 46% of investors who have $500,000 or more in investable assets hold annuities. • 33% of fully employed seniors own annuities, a percentage higher than that of all other age groups.. • Average annuity allocation grew to 12% in 2011 from 9% percent in 2008 among highnet worth pre/post retirees. • About one-third (29%) of pre/post-retirees own annuities. Those who own them invest about one-fifth (21%) of their assets in annuities. Your clients are predisposed to seek these financial products at your institution. Please call 800.710.1115 or 913.956.6112 for details.

*As reported in LifeHealthPro (http://www.lifehealthpro.com/2011/12/16/kehrer-limra-bank-annuity-sales-up-11-over-year-ag)

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BANK INSURANCE SCORECARD


Fee Income Health Alert! With the current interest rate environment and the introduction of new rEgulations, fee income has been ailing. The effects of low interest rates are contagious which means your clients are feeling them, too. We recommend an evaluation performed by our in house specialist. In our practice we find the prescription benefits both you and your client with a long term positive effect. Call us today to schedule your evaluation – we know your clients will be glad you did.

Fast relief is just a phone call away… Call us today to schedule your exam!

800.592.6684

10901 West 84th Terrace, Suite 125, Lenexa, KS 66214

800.592.6684 • http://www.mymip.biz BANK INSURANCE SCORECARD

PAGE 5


Recouping Fee Revenue Is More Than Math Before adding new fees or subtracting bank services consider the following excerpts from a Gallup Poll taken November 2011.

“Last November, Gallup found that only 15% of Americans had “a great deal” or “quite a lot” of confidence in the U.S. banking system. That’s a new low. This is a problem not only for the financial industry generally but for individual banks too. “ “Bankers may think they aren’t doing anything wrong; they’re just trying to provide a return for shareholders. So from their perspective, they’re doing the right things. In that case, why are customers reacting so strongly? Because bankers are also doing things like overtly passing on costs in the form of fees, which infuriates the customers who are expected to pay them. And bankers are also making cuts in customer service, which not only angers customers, but it basically encourages them to walk out the door.”

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“It doesn’t have to be this way... there are ways to do the right thing, both by the bank’s P&L sheet and by its customers.” “...One of the worst things a company can do is to begin charging a new fee for a service that had previously been free.” “Many banks have instituted new fee structures and/ or cut services. Generally, they have suffered significant customer defections and a loss of loyalty and engagement among those customers who remain.” “Instead of making product and service adjustments in the traditional finance-driven way, bank management would be well-advised to make these changes in a customer-centric way -- and in a way that reflects behavioral economics.”

BANK INSURANCE SCORECARD


Recouping Fee Revenue Is More Than Math (Continued) “Given the changing banking model, some banks have reacted by cutting back on employees. That may make financial sense in the short term. The fewer people on the payroll, the lower the operating costs, and cost cutting is required when revenues are declining. But that short-term gain -- and precisely how it is achieved -- needs to be viewed in a behavioral economics context, because customer-facing employees remain consumers’ most preferred provider of banking services and may be a bank’s best hope for promoting customer engagement. Gallup’s 2011 proprietary retail banking study showed that the most powerful drivers of customer loyalty and engagement remain branch visits and call center interactions with a real person. So the last place to cut should be front-line employees, because when fewer people are providing what matters most to customers, loyalty and engagement can easily take a significant hit.”

Ideas for new fee income after Regulation E and Regulation II? CON

PRO

New service fees

• No New Fees!

New transaction fees

• Offer products clients want and already use!

New checking fees

• License Branch Associates!

New account fees

• Offer Life and Annuity products at branches!

New ATM fees

• Generate Fee income from commissions!!

New Debit Card fees

• Establish new client relationships! • Talk to Midwest Insurance Partners!!!

BANK INSURANCE SCORECARD

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It’s a Puzzle Listed below are the three main reasons community banks and credit unions don’t have a life and annuity platform in retail operations. 1. Not understanding what is involved in an insurance platform program. 2. Not wanting to spend money for staff and resources. 3. Not knowing with whom to talk or work. Midwest Insurance Partners can address all three of these reasons. Establishing life and annuity programs in community banks and credit unions is our only business. We understand the process to incorporate life and annuities into your retail sales program. We know what the FDIC and Insurance Departments require. We know which insurance products are appropriate and suitable to offer at financial institutions. We are aware in this economy every institution is creating new efficiencies in client services and resource utilization. We also know in addition to cutting expenses every institution is looking for PAGE 8

new ways to generate fee revenue. Our service model compliments these new efficiencies and is focused on helping you generate fee income. We see this as a win-win-win scenario. You license a retail associate in each of your branches - we coach them to become better financial professionals. Your clients benefit from the value propositions offered in life and fixed annuity products. Your institution generates fee income from commissions (not from new fees charged on services or accounts) and you are able to move non-revenue producing assets without watching those assets go to a competitor. As for the third reason listed above, we work with you to solve the puzzle. First, we need to meet. Our focus is your success. We do this by enabling you to offer ANNUITY and LIFE products. We help you generate FEE INCOME and take care of your clients. BANK INSURANCE SCORECARD


Would My Clients Respond? What opportunity does life insurance and fixed annuities hold for my clients? The following scenarios and illustrations will give some perspective into the value proposition of offering insurance products to clients. The values given in the following stories are not guarantees and are approximate values for illustration purposes only. Bernice, an 83 year old client has a $50,000 CD maturing in a couple of weeks. For years she has used the interest to pay the taxes on her home (approximately $1,800). When she discovers the current interest being offered ranges from .35% to 1.15% she is upset because it is not enough to pay her taxes. A Single Premium Immediate Annuity with cash refund with an annual distribution of $2,000 would cost her $26,750. This amounts to a distribution rate of approximately 7.5% and because of the exclusion ratio only $192 would be taxable. Bob (77) and Betty (73) are a retired couple and have been using the interest on their $200,000 CD to pay for Betty’s heart medications. When they inquire about renewal rates they are shaken. Betty’s heart medications have been running about $400 per month. A Single Premium Immediate Annuity with cash refund for $430 per month guaranteed for the rest of Bob’s life would cost $65,808 at 7.4% distribution rate (they were using interest on the entire $200K at 2.4%to get the same return). They now have $134,192 to invest for other retirement purposes. Bill (78) has $100,000 in a CD. He has no plans for the money and renews it year after year. When asked what his plans are for the money he says he is going to leave it to his children. It is more efficient to use life insurance, in this scenario Single Premium Whole Life, to leave a legacy to his children. For a premium of $72,950 Bill will be able to leave a $100,000 tax-free benefit to his children. (If Bill wanted to use the entire $100k as premium he could leave them $137,000 tax-free). Brad (56) and Brenda (57) are saving for their retirement. They each have a Roth IRA CD with $100,000 dollars maturing at the bank. With current rates they are talking about having to work more years and cut back some of their retirement plans. A 5 year fixed annuity is proposed. The first year interest rate is 3.25% with a minimum guarantee of 3.00% for the life of the contract. In 5 years, at surrender, $100,000 would grow to $116,200. If left in a CD earning .35% in year one and growing by .50% each year through year 5 the value of the $100,000 CD would grow to $105,450. These scenarios play themselves out in branch lobbies every day. By enabling your branches to make these value propositions you will be helping your clients secure their future, leave legacies to loved ones and charities, and have the income they need in retirement. All with guaranteed, safe investment vehicles.

“We share your values and we know your clients”

BANK INSURANCE SCORECARD

PAGE 9


1. We share your values, we know your clients. We are a Midwest company and our families, co-workers, and neighbors bank with you and other community banks. 2. We partner with you to build and manage a retail insurance program specific to your goals. You won’t have to hire additional staff to add new revenue. 3. We support, train, coach and equip your sales associates – your clients get to work with those people they already know and trust. 4. 100% independently owned – Midwest offers you the best solutions for you to offer your clients. 5. Our associates offer more than 180 years of industry experience. 6. Industry leading technology – streamlining the sales process and improving the quality of writing business and your client’s experience. 7. More than 60 carriers to meet your clients’ annuity, life and long-term care needs. 8. First class training – new agent, sales skills, 1:1 coaching, and product knowledge in your institution or at our state of the art facility. 9. In house marketing support – from statement stuffers to lobby posters we create marketing materials specific to your insurance program. 10. Back Office Processing – compliance & suitability review in line with your compliance standards.

Call us today for additional information!

800.592.6684

TOP TEN REASONS TO PARTNER WITH MIDWEST INSURANCE PARTNERS


Bank Insurance Scorecard