Knowledge Area Review (KAR 022) Lead Conversion Best Practices in Health Insurance June 2015.

Knowledge Area Review (KAR 022) Lead Conversion Best Practices in Health Insurance June 2015

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© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 3 Foreword This document provides a synthesis of available public domain information regarding Lead Conversion Best Practices in Health Insurance. It is intended to provide a comprehensive overview of the current thinking on this issue across the globe. The authors have summarized the information collected in a manner to provide the reader with a logical flow, and have referenced source material in each case. We have also provided insight through analysis of the information we have collected to show relationships and improve the value of the raw information. The key questions which have framed the context of this Knowledge Area Review are: What are the overall Industry Dynamics we should be aware of? What are the key Strategic Themes underpinning this topic? What are the main drivers impacting Lead Generation & Quality? How can the overall Sales Process be improved? What are some of the key Human Capital factors and Enabling Technologies that can increase lead conversion? What are typical Metrics & Measurement best practices?

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Table of Contents 4 SectionComponentDescription 1Executive Summary Overview of our research and findings 2 Lead Conversion Best Practices in Health Insurance A global review of global best practices in lead conversion AIndustry Dynamics BStrategic Themes For each dimension: The key thinking from consulting firms, journals, and academia as to what constitutes best practice Examples of this best practice deployed across different firms and industries. CLead Generation & Quality D Sales Process E Human Capital F Enabling Technologies G Metrics / Measurement 3Case Studies Selection of best practices cases around the globe 4Knowledge Sources Relevant published materials for further reading

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Executive Summary (1/2) We have summarised the key insights for each driver of Lead Conversion Best Practices in Health Insurance Industry Dynamics Strategic Themes Lead Generation & Quality SUMMARY Several key industry characteristics, innovations, and trends at play: Approximately 50% of Australians hold private health insurance and overall spend levels are increasing Other trends include consolidation, margin pressure, and impact of technology On consolidation, not-for-profit and mutual health insurers are gaining steam to take on the ‘Big 2’ Health insurer capabilities need to evolve to reflect ‘Retail’ lessons learned (e.g. multi-channel, service focus) Innovation in business models will also be required as competition intensifies and technology-driven disruption becomes more prevalent Growth of corporate wellness programs is driven by a number of key factors The convergence of health and wealth is another powerful trend at play. Multi-channel being embraced by more and more insurers: Consumers move through a journey that involves gathering information, quoting, and purchasing The above covers multiple channels, often multiple times each, in ways that differ from historical behaviours (becoming less linear) Complex products are difficult for self-directed customers to engage with Increasing shift towards multi-channel is seen in other industries (e.g. telco, retail, and technology). Customer Centricity & the Customer Journey is another critical strategic theme: Insurers (health, life) typically struggle to deliver experiences that gain customer trust; fragmented operation models are often the culprit Recovery after a poor experience can be a critical turning point for customer loyalty Bupa is doing a good job by leveraging new store formats, digital experiences, and overall customer experience; health.com.au is another example. Cross-sell is the third strategic theme Teachers Health and NIB are good examples where this is gaining traction. Demographic, product, and channel segmentation methodologies tend to prevail in the health insurance industry in Australia and the US Some health insurers are adopting more sophisticated segmentation methods to gain deeper insights into their existing and potential plan members, including the use of attitudinal customer segmentation Advertising spend in the Australian health insurance industry continues to increase Content Marketing is another key lever to pull when driving lead generation Bupa is a pioneer in leveraging paid search as a key medium in driving product awareness and sales leads, then using analytics to optimise Channel Integration is another key lever (e.g. email, social, blogs, SEO, mobile etc.).

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 6 Executive Summary (2/2) We have summarised the key insights for each driver of Lead Conversion Best Practices in Health Insurance Human Capital Enabling Technologies As organizations transform to adopt customer experience management (CEM) into their business, contact center agents need both the will and the skill to serve as an engine for CEM (e.g. Teachers Health provides such an award-winning experience) In some instances, telesales capabilities are being lifted (e.g. qualified bankers on the phone) to drive more of a revenue generation agenda Health insurers must invest in developing advanced retail capabilities to effectively respond to rising consumer expectations Within Product and Pricing, consumer and market analytics were identified as priority investment areas Top Consumer Experience investments include segmentation analytics and the use of technology to enhance consumer touch points Insurers plan to invest in Distribution, Enrollment, and Renewal capabilities to leverage deeper consumer understanding for channel design and strengthen retention Branding and Marketing investments are planned in personalized, analytics-driven marketing, and building a strong digital presence. By 2017, a new breed of customer will dominate: the so called “digital natives” Digital is revolutionizing consumers’ relationships with insurance providers, who in response seek to fuse the best of both digital and physical worlds Technology investments in cost transparency, mobility, and CRM will likely become table stakes in the future; however, data analytics, consumer engagement tools and “single source of truth” data are emerging differentiators Social and Mobile are key technological levers impacting the customer experience ‘Gamification’ is rapidly emerging as an important mechanism to improve customer engagement in health insurance Sales Enablement & Marketing Automation tools (e.g. live chat, inbound marketing, automation) are becoming increasingly important in lead quality. Metrics / Measurement Annual survey (172 companies with $0.5 - $15bn revenue) was leveraged to test the claim that the act of selling was getting more difficult Ability to convert the sales pipeline continues to decline While there has generally been an increase in sales leads progressing to calls / appointments, the ability to convert those interactions to offers and to convert those offers to sales has dropped significantly since 11/12 Retention (lapse and churn) is an industry problem Customer Lifetime Value can be a useful metric by which to define and measure success. Sales Process Six channels typically used by Australian health insurers are: retail locations, telephone, online, comparison websites, corporate distribution, and partnerships Retail locations still drive 1/3 of sales, however are in decline overall (and typically used to focus on an older demographic) The internet is increasingly becoming a trusted source of advice Integrating the middle office process for multi-product customers eliminates a lot of their frustrations Consumers still use the phone as the channel they rely on most when they have queries, particularly when trying to resolve complex problems B2B marketers typically use telemarketing for lead generation Some research suggests that field sales teams will gradually be replaced by inside sales forces; on the other hand, Teachers Health employs a BDM team Have identified a number of sales effectiveness best practices (e.g. authentic storytelling, use of content) and also the importance of A/B testing. SUMMARY

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 8 G2. Customer Lifetime Value G1. Benchmarks (within/outside industry) F1. Digitalization F2. Technology Investments F3. Big Data C5. Lead Scoring / Qualification D1. Channel Selection D3. Telemarketing Deep Dive D2. F2F Channel Deep Dive C1. Segmentation & Targeting C. Lead Generation & QualityD. Sales Process F. Enabling TechnologiesG. Metrics / Measurement E1. Skills & Training E. Human Capital E2. Recruitment Strategies E3. Future-back Organisational Capabilities A1. Australian Health Insurance Overview A. Industry Dynamics F5. Sales Enablement & Marketing Automation C4. Lead Capture & Consolidation KAR 022 – Lead Conversion Best Practices in Health Insurance The framework below outlines 7 key drivers for optimal lead conversion B1. Multi-Channel A3. Trends B. Strategic Themes B2. Customer Centricity A2. Innovation B3. Cross-Sell F4. Social D4. Sales Effectiveness Best Practice C2. Advertising C3. Content Marketing

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 10 A1. Australian Health Insurance Overview Source: Medibank IPO Prospectus TOP 10 PHI – INDUSTRY MARKET SHARE IN AUSTRALIA BY NUMBER OF PRINCIPAL POLICYHOLDERS Retail locations: private health insurers may operate retail store networks to enable potential and existing customers to transact in person; Telephone: call centre operations may be used to sell and inform customers of new PHI products and promotions being launched; Online: certain private health insurers sell PHI products through their own websites; Comparison websites: private health insurers may market and advertise their PHI products on a website operated by third parties. Potential customers use these websites to find and compare different PHI products and purchase the one that is best suited to their needs. Comparison websites generally charge private health insurers a commission for sales of PHI policies via, or associated with, their website. The Australian Government also provides a for-information-only comparison website service (www.PrivateHealth.gov.au); Corporate distribution: PHI products can be distributed and promoted via corporate arrangements and contracts, often offering discounts, subsidies and benefits to employees (however, generally the employer does not pay the PHI premium, which remains the responsibility of the individual Policyholder); and Partnerships and alliances: private health insurers may leverage opportunities to form beneficial relationships with other businesses to encourage cross-selling and distribution of PHI products. PHI PRODUCTS ARE DISTRIBUTED AND SOLD THROUGH A VARIETY OF CHANNELS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 11 Source: A1. Australian Health Insurance Overview – Customer penetration Approximately 50% of Australians hold PHI, with age and affordability being the key influencers of customer participation rates 11 Source: Medibank, “IPO Prospectus,” 2014. AUSTRALIAN PHI PARTICIPATION RATE OVER TIMEDESCRIPTION The proportion of the Australian population covered by PHI Hospital Cover has been stable since 2000 at ~50% Due to the significance of PHI in the funding of healthcare services, a number of Australian Government initiatives are in place to incentivise Australians to obtain and maintain PHI in order to maintain a balance between public and private healthcare funding; e.g.. Medicare Levy Surcharge (MLS), Lifetime Health Cover (LHC); and the Private Health Insurance (PHI) rebate. Recent adjustments to the PHI rebate regime have not reduced overall participation rates PHI participation rates are influenced by age and affordability, while individuals’ decisions to obtain or maintain PHI often relate to milestones such as establishing households, having children and retirement PHI participation is lowest among the 20 to 29 age group, when cover under family PHI policies generally ceases, LHC loadings do not yet take effect and the MLS may have limited application (due to lower income levels) Participation tends to increase strongly in the 30 to 34 and 34 to 39 age groups once the LHC loadings and tax incentives take effect, and due to family and lifestyle PHI participation rates decline thereafter, possibly due to the retirement of the older population, which decreases income and may impact affordability AUSTRALIAN PHI PARTICIPATION RATE BY AGE AND COVER

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 12 A1. Australian Health Insurance Overview – Consolidation underway Fifteen not-for-profit and mutual health funds have come together to launch Members Own Health Funds Source: “membersonw.com.au”, secondary research Not-for-profit and mutual health funds, making up more than a third of funds in the Australian health insurance market, have joined forces to tackle the ‘big two’ - Medibank Private and BUPA - head-on Fifteen not-for-profit and mutual health funds (representing 18 brands) have come together to launch Members Own Health Funds Over the past five years, on average Members Own health funds have collectively given more back to their members than the comparative group of Medibank Private, BUPA, NIB and AHM collectively Members Own health funds have collectively delivered better service than the comparative group collectively Higher member satisfaction and loyalty, and dramatically lower relative rates of member complaints to the Ombudsman than the comparative group collectively KEY POINTSMEMBERS OWN HEALTH FUNDS INCLUDE

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 13 A1. Australian Health Insurance Overview – Consolidation underway HCF, Australia’s 3 rd largest health insurer by market share, offers retirement villages and aged care services 13 Source: http://www.news.com.au/news/manchester-unity-merger-approved/story-fna7dq6e-1111118323642, http://www.manchesterunity.com.au/site/, http://www.abc.net.au/lateline/business/items/200808/s2349642.htm, http://www.bupa.com.au/about-us/media-centre/media- releases/ci.bupa-set-to-become-australia%E2%80%99s-largest-private-aged-care-provider.7030news, http://australianunityrl.com/; http://www.medibank.com.au/Client/Documents/Pdfs/George_Savvides_CEPAR_Presentation_040713.pdf.http://www.news.com.au/news/manchester-unity-merger-approved/story-fna7dq6e-1111118323642http://www.manchesterunity.com.au/site/http://www.abc.net.au/lateline/business/items/200808/s2349642.htmhttp://australianunityrl.com/http://www.medibank.com.au/Client/Documents/Pdfs/George_Savvides_CEPAR_Presentation_040713.pdf In 2008, HCF, Australia’s 3 rd largest health insurer by market share (approx. 11.5%), merged with Manchester Unity, a smaller co-operative health insurer Most of HCF’s members are based in NSW. Manchester Unity was based in Melbourne, with a strong membership base in Victoria Along with the insurance merger, Manchester Unity owned retirement villages and aged care facilities in the Sydney metro area; the first opened in 1949 at North Parramatta. These continue under the Manchester Unity brand, as a subsidiary of HCF HCF’s managing director Terry Smith commented on the merger, "In a changing private health insurance landscape, our merger with Manchester Unity will bring HCF additional scale and flexibility to support efficient operations and keep premiums as low as possible.” Manchester Unity, as a subsidiary of HCF, owns and manages 2 aged- care facilities in NSW and 3 retirement villages in Sydney. As the Australian population ages, health expenditure is increasing significantly. The vertical expansion of health insurers into aged care services is not uncommon in Australia: In December 2012, Bupa (the second largest PHI in Australia), acquired Innovative Care’s aged care operations, making it Australia’s largest private aged care provider with 10 aged care homes in Queensland, NSW and Victoria. Australian Unity purchased INS Health Care to provide home care services for the aged and disabled; AU also offers 18 retirement villages and 5 aged care facilities across NSW and Victoria KEY POINTS Medibank forecast of Australian health expenditure COLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 14 Source: 2014 NIB investors Day A1. Australian Health Insurance Overview – Australians are spending more and more on healthcare Private sector and private funding will increasingly play an enhanced role HEALTHCARE SPENDING

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 15 Source: Deloitte, “The future of health care insurance: What’s ahead?,” 2012. Majority of health costs worldwide are the direct result of unhealthy lifestyles and/ or failure to adhere to recommended treatment plans (i.e. lifestyle- related habits and chronic diseases contribute to 75% of health costs) Health insurers have the opportunity to provide new mechanisms to influence behaviour – incentives, benefits design, and technologies – that reward desired responses from individuals and population; adapt plans to individual needs and offer self-care tools to support individual’s lifestyle decision-making CONSUMERISM EXPECTED DRIVERS OF HEALTH INSURANCE INNOVATION Convergence of clinical and administrative management of the health system will drive the creation of large integrated health system operators that deliver and finance health care services Health insurers are enviably positioned to collaborate with or acquire clinical delivery capabilities either through acquisitions or as business partners in accountable care organizations and medical homes INTEGRATED HEALTH As partners to integrated systems of care, health insurers amass huge amounts of data about the efficacy and efficiency of treatments and health delivery processes Health insurers may play a lead role as infomediaries about health – structuring data into useful tools for individuals, employers, and provides BIG DATA A2. Innovation – An imperative for health insurers Health insurers must evolve their business models to innovate

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 16 Source: Private Health Insurance Administration Council, “Competition in The Australian Private Health Insurance Market: Research Paper 1,” 2013. Provision of dental clinics, eye clinics, hospitals and medical clinics, coverage/ indemnity for people not eligible for Medicare (international students and visitors) and chronic disease management plans have become more prevalent Viewed with some concern as to the potential for service compromises and/ or conflicted interest HEALTH-RELATED ADJACENCIES NEW AREAS OF OPERATION FOR PRIVATE HEALTH INSURERS General treatment policies (such as nutritionists, dieticians, and exercise physiology) are increasingly in demand by consumers and a good example of how product offerings have expanded while still operating within the existing regulatory framework Viewed as positive for both the industry and consumers WELLNESS SERVICES A2. Innovation – Evolution of health insurance business models in Australia Australian Private Health Insurers are seeking to differentiate their member offerings beyond their core business of health insurance

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 17 Source: McKinsey & Company, “Sustainable Health Insurance: Global Perspectives for India,” 2011. COMPETENCIES REQUIRED TO WIN IN RETAIL HEALTH INSURANCE Success in a retail health insurance world requires seven key capabilities and competencies Crucial among them are product innovation, retail multi-channel distribution, value-added consumer experience (beyond just service), consumer-oriented medical management, and risk management Each of these capabilities and competencies stands on a foundation of deep consumer insight and an IT- enabled administrative platform Whether health insurers distribute directly to consumers or through intermediaries they will need to develop distinctive brands and an overall brand communication strategy. At a minimum, health insurers must gain the trust of consumers which frequently does not exist Health insurers are expected to develop multiple sub- brands under an umbrella brand to provide more targeted support to different products, channels, and/or customer segments as well. Continued experimentation with affinity marketing and co- branding is also expected DESCRIPTION A2. Innovation – New capabilities required Health insurers must invest in developing advanced ‘retailing’ capabilities to effectively meet rising consumer expectations

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 18 A3. Trends – Many US trends shaping the industry will impact Australia as well In the US. the Affordable Health Care for America Act is expected to drive considerable transformation of its Health Insurance and Health Care sector Source: Deloitte, “2014 Global health care outlook Shared challenges, shared opportunities,” 2014. ChallengeImplications for Health Insurers Margin preservationHealth plans will face new competitive challenges Implementation of health insurance exchanges (HIX) and the ACA places limits on what they can spend (earn) on things other than direct member benefit To break even, most will have to cut costs from 20-30% ConsolidationCross-sector convergence is expected to increase: It will become more common for a health plan to offer clinical services — both professional and technical — and for health care providers to offer health care financing products Moving from volume- to value-based careReimbursement models change to rewarding providers for good outcomes in their populations health plans are figuring out how to manage risk Revenue diversification; health plans are buying medical practices and entering the accountable care arena. Technology-driven transformationWork flow tools such as EHRs, portals, mHealth systems, and home and remote monitoring are rapidly transforming and enabling care Harnessing big data through analytics and predictive modelling to manage risk, better understand costs, and determine clinical effectiveness Growing consumer powerConsumers use their increased purchasing power and access to information to drive health care decisions responsibility shifts from employers paying for coverage to consumers Innovation required from providers and health plans to satisfy the unmet needs of these consumers, who want transparency, value, and convenience Managing expectations of competing stakeholders Health plans will be having many conversations with employers — particularly with mid-market and small companies — about the new HIX environment and its resulting implications. Opportunity to work with employers on strategies to manage the increasing cost of care, specifically in areas such as product design, wellness program implementation and innovative care delivery models Help consumers to understand the value of the product they are buying and how to use it effectively EXPECTED IMPACT OF AFFORDABLE CARE ACT ON US HEALTH INSURANCE INDUSTRY

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 19 A3. Trends – Several shaping the future of health insurance (1/2) In Australia, the Health Insurance industry is grappling with responding to technology-driven disruption … Source: Medibank, “IPO Prospectus,” 2014. TECHNOLOGY-DRIVEN INDUSTRY DEVELOPMENTS IN HEALTH INSURANCE Emergence of comparison websites’ growth and digital distribution The competitiveness of the PHI market has intensified with online distribution and the emergence of comparison websites to compare and evaluate services and prices Comparison websites and consumer network campaigns have increased the level of information available to customers, and further enhanced competition within the industry as smaller private health insurers gain greater market exposure This increased competition has also led to an increase in customer switching across private health insurers, as well as increased costs and margin pressures on private health insurers through increased commissions paid to intermediary and comparison websites that support product sales Telehealth services Telehealth services use communication technologies, such as video-conferencing, telephone and online to deliver health services and transmit health information. Telehealth technology can improve access to health-related services for people living in regional, rural and remote areas Telehealth technology such as online chat functionality can often be appealing to a younger generation, who are now using these platforms to access services such as mental health counselling and support Government, non-government organizations and businesses are using telehealth services as a cost- effective way to access a wide range of healthcare services, including triage, mental health support and counselling, GP services, specialist and allied health services, and chronic disease management programs

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 20 A3. Trends – Several shaping the future of health insurance (2/2) … and rising expectations from customers Source: Deloitte, “2014 Global health care outlook Shared challenges, shared opportunities,” 2014. DELIVERY-SYSTEM INDUSTRY DEVELOPMENTS IN HEALTH INSURANCE Greater customer focus and care Private health insurers have shifted focus towards providing wider health-related and customer- centered services to differentiate their PHI products, and to attract and retain customers. Many private health insurers also distribute diversified insurance products such as travel and life insurance as part of their offering (which are commonly underwritten by third parties) Private health insurers have moved to play a broader role in managing the health of Policyholders, beyond being a health insurance underwriter, by making contact with Policyholders at stages throughout their life to influence better health outcomes. Some private health insurers are increasingly investing in health management capabilities, including linkages with primary care providers such as GPs, and telephone and online health management services, with an initial aim of enhancing customer loyalty and a longer-term aim of improving the health and wellbeing of their Policyholders and thereby helping to control claims expenditure Integrated healthcare and medical services solutions Some businesses are looking to outsource the provision of integrated healthcare services. This can include a comprehensive range of healthcare and medical service solutions that provide innovative and cost-effective health management services, including access to medical practitioners; allied health professionals; general treatment and telehealth services; and delivering triage, health advice and referral services. Private health insurers with integrated health solution capabilities (offering access to healthcare from the point of injury up until the completion of the rehabilitation process) may be particularly relevant for businesses and governments looking to manage costs and risks in relation to work-related injury. Chronic disease programs through primary care providers Given rising rates of chronic disease in Australia, chronic disease management programs delivered in conjunction with primary healthcare providers are emerging as an opportunity for private health insurance providers to reduce hospital admissions and improve patient outcomes. Chronic disease management programs draw on a range of interventions that include care planning, case management and increased education and support that may result in improved health outcomes for patients

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 21 A3. Trends – Convergence in healthcare to respond to rising consumer expectations A new consumer-centered retail healthcare marketplace is rapidly emerging with shifting societal norms towards healthy living and engagement Source: Oliver Wyman, “Convergence: Opportunities for Innovation in the New Health Economy,” 2014. The new healthcare market will be characterized by convergence—a blurring of the traditional lines that separate healthcare from health insurance, medicine from health and wellness, employer- sponsored benefits from retail-based healthcare, and the physical from the virtual Payer and provider organizations are working together in new combinations, as providers move to take on financial risk and insurers get more involved in care delivery Drive to create new integrated marketplaces that connect traditional care providers and insurance to personalized health and wellness offerings Entry of non-traditional players— retailers, technology companies, and so forth— into healthcare and partnering with the traditional players to create new, lifestyle-based models DRIVERS OF HEALTHCARE CONVERGENCE OUTCOMES OF HEALTHCARE CONVERGENCE Traditionally a single-chain, supply-side, wholesale industry, healthcare will edge toward becoming a hyper- competitive, multi-chain, demand-driven industry In a decade “healthcare will be a 24/7, location- independent, information-based business” Oliver Wyman believe two major movements will bring the converged healthcare economy to maturity: Next generation population health Consumer powered healthy living In addition, an accelerated pace of research breakthroughs in prevention science is expected to further fuel the evolution of the health and wellbeing marketplace

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 22 A3. Trends – Health-Wealth convergence Across markets, health and wealth needs are converging as increasing individual healthcare costs place individual assets at risk; industry solutions are not yet meeting this gap 22 Source: Life Insurance 2020: Competing for a future, PWC, 2012; “Amana Takaful launches unique medical insurance for parents”, Daily FT, Sri Lanka, July 2013. CONVERGENCE OF HEALTH AND WEALTH NEEDS EXAMPLE PRODUCTS Currently, living benefit policies are available which offer a convergence of life insurance and critical disease coverage Some providers are offering critical disease treatment plans as an aspect of life insurance supporting financial coverage for treatment after early diagnosis of a critical disease Aviva is offering a Wellness Rider, which offers discounts for maintaining a healthy weight and yearly GP visits Amana Takaful in Sri Lanka launched Kruthuguna in 2013. This is a form of family (life) coverage, but offers medical cover for parents (age 55-73). Benefits include medical bills, home nursing care, ambulance transfer and concessions on wheel chairs Long term care insurance covers/riders: this “living benefits” trend is expected to evolve to more converged health and wealth products, although examples are not yet available

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 24 Source: “Auto Insurance Customer Insight research” 2012 McKinsey B1. Multi-Channel – Customer journeys are evolving World-class retention considers all channels in a holistic customer buying and loyalty process – now less linear due to digital consumer trends Consumers that decide to shop move through a journey that involves gathering information, quoting and purchasing Consumers then remain in a loyalty loop until a triggering event thrusts them back into the shopping loop. This journey has become less linear as consumers add and drop brands from their consideration set at different points along the way. Consumers display distinct channel preferences through their behaviour at each stage of the journey, highlighting how the “agent versus direct” paradigm has evolved into a multichannel model. Consumers no longer stick to a preferred channel from start to finish. Many start direct and then purchase with an agent. Some shoppers even use multiple channels during the same stage; for instance, they get quotes from both agents and from the Web. OMNI-CHANNEL CUSTOMER JOURNEY KEY ATTRIBUTES & INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 25 Source: “Digital distribution in insurance: a quiet revolution”, Swiss re Sigma 2014 B1. Multi-channel – Multiple touchpoints along customer journey The increasingly complex buying journey for insurance New technology is increasingly fragmenting the purchasing process Where once consumers expected to shop for insurance solely through their agent or broker, and to submit claims and elicit advice in much the same way, today they increasingly expect to interact with their insurance provider or advisor on their own schedules, at all times and through multiple channels (e.g. phone, online self-service, click-to-chat) The advent of the internet and social media mean prospective customers can build awareness of the range of insurance products that might be suitable for them and their cost, at least for standard types of cover The diffusion of online and mobile phone technology and the associated multiple touch points are providing insurers with a vast and potentially rich source of data about their customers Allied with new methods and techniques to interpret the complex information – Big Data – this offers insurers considerable scope to improve their distribution, risk assessment and pricing It can also help them improve product offerings and services to better match the evolving needs of their customers KEY INSIGHTS MULTIPLE TOUCH POINTS Today, the purchasing journey is fragmented and dispersed across different interaction or touchpoints between insurance carriers, intermediaries, and customers

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 26 B1. Multi-channel – Multi-distribution strategies are now placing a high priority on creating mobile capabilities Source: “World insurance report”, Capgemini, 2013 TOP 5 KEY DRIVERS FOR INVESTING IN MOBILE CHANNEL FOR INSURANCE DISTRIBUTION KEY TAKE-OUTS Research shows insurers pursuing integrated multi-distribution strategies are now placing a high priority on creating mobile capabilities While face-to-face remains the primary form of interaction for most insurance customers, mobile has become vital in the drive to meet customer needs in terms of access, with a growing number of customers using their mobile phones to engage with insurers Mobile is becoming the channel of choice for a number of customer interactions, especially on the research and servicing side

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 27 B1. Multi-Channel – Case Study: Medibank Leverage a multi-channel and cross-sell strategy using a sub-brand Source: Medibank IPO prospectus 2014 KEY POINTS ahm: Since its 2013 repositioning from a regional brand to a national, essentials-focussed PHI offering, ahm has become one of the fastest growing PHI brands, with the number of Policyholders holding ahm products increasing more than six times faster than the growth of the PHI industry over the 12 months to 31 March 2014 This has contributed to Medibank Private broadly maintaining its overall market share, despite a decline in Medibank-branded policies. The ahm growth includes some Policyholders switching from Medibank-branded policies, as well as new Policyholders switching from other private health insurers, and Policyholders taking out PHI for the first time Offers Diversified Insurance (cross-sell), such as travel, life and pet insurance products as the authorised agent of other insurers. These are sold to both Medibank Private Policyholders and other individuals Medibank Private Policyholders receive a discount as part of Medibank Private’s customer retention strategy PRODUCT PORTFOLIO ACQUISITIONS BY SALES CHANNEL TARGET CUSTOMERS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 28 B1. Multi-Channel – There has been a significant transformation to multiple channels in the buyers’ search for information Source: secondary research The pace of change in the way we live, learn, and shop is accelerating. There has been a massive transformation between generations in the last ten years in how they search for information. The key tools for information gathering of the old generation were phone, mail, newspaper, and TV. Now, there is an explosion of multiple channels for buyer information gathering. NEW GENERATION MULTI-CHANNEL PERSONALIZED INFORMATION GATHERING OLD GENERATION GENERALISED INFORMATION GATHERING

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 29 B1. Multi-Channel – Five best practices for multi-channel marketing success (1/2) Source: http://www.cmswire.com/cms/customer-experience/5-best-practices-for-multichannel-marketing-success-013119.php?pageNum=2 In the world of multi-channel marketing, disparate and siloed systems have led to inconsistent branding and disconnected marketing offers across channels. Avoid the gaps by following these 5 tips: 1. Create a Consistent Brand Message A brand is a commitment to provide consistent product performance and a repeatable level of service. Think about it: The world's biggest brands, such as Apple, Coca-Cola and McDonald’s, are models of consistency. You know what you're going to get because you've gotten the same thing for as far back as you can remember. The growing number of channels for media consumption highlight the importance of a consistent message by making it easier for marketers to slip up— and boy, do they. According to a November 2010 report for Aberdeen Group titled The Roadmap from Multi-Channel to Cross-Channel Retailing: The True ROI of Unified Customer Experience, only 32% of respondents could execute a unified promotional plan for all marketing channels. The Roadmap from Multi-Channel to Cross-Channel Retailing: The True ROI of Unified Customer Experience "With all of these channels (some of which are out of your control), it’s important to monitor them closely. Economies of scale hold true here, as a single unified communication can be “published” on multiple social platforms." said Pete Luvara of mindSHIFT Technologies. "Companies should leverage the viral nature of publishing content through their websites and out through the social web. Online interactions create engagement and engagements create relationships. Through these relationships is where trust is built, and conversely brand loyalty and awareness.“Pete Luvara 2. Invest in Emerging Channels Successful marketing means bringing your "A" game to present channels as well as future ones. For example, Neo@Ogilvy is a digital media agency and division of Ogilvy One that serves some of the biggest clients in the world: IBM, American Express, Cisco and Allstate. Part of their strategy is to invest in all emerging channels that match the business goals. Those who want to be successful in digital marketing both now and in the future would be well advised to gather experience with emerging channels, make targeted investments in innovative technologies, and develop new concepts for the future of marketing todayNeo@Ogilvy

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 30 B1. Multi-Channel – Five best practices for multi-channel marketing success (2/2) Source: Chelsie Nekano CMS Wire http://www.cmswire.com/cms/customer-experience/5-best-practices-for-multichannel-marketing-success-013119.php?pageNum=2 3. Develop a Unified Marketing Approach A unified marketing approach isn't just another way to promote a consistent brand message. Michael Kogon, CEO of Definition 6, puts it like this:Michael Kogon …a unified approach will look to deliver "one experience" for the consumer. That can mean very different tactics for each platform including online/website, mobile and traditional marketing efforts. It becomes less about managing a brand/client and more about guiding. The world is not a static environment and in order to communicate a brand's message with its core audience, it will need to be able to create true connections while people are in a constant state of motion. Basically, unified marketing is a framework that allows both traditional and digital marketing tactics to be mapped on the same plane and compared. This can save you and your team a ton of time and brain pain by reducing redundant efforts and identifying opportunities. The unified approach is also handy because it doesn't play favourites. No one tactic is enough, nor solely responsible for users taking actions; they are all equally important. In this way, there's room for the calculation of relative effectiveness and ROI of all marketing tactics no matter what channel or discipline they belong to. 4. Plan Your Campaign in Advance A communications timeline is essential, especially when you're juggling touch points. Plus, planning your campaign ahead of time can really ease the process of both the unified approach and consistent branding. Zoom out and understand how each channel works together and reinforces messaging without overwhelming your audience. Further, achieving a single view of the customer often requires collecting a ton of data, mapping those feeds from your CRM, POS and ecommerce system to a data warehouse, filtering that data and then serving it up to power the different touch points. In other words, it's going to take some lateral thinking. 5. Capture All Activity Activity is data and data is important if you want to get to know your customer, so track all activity. If you offer a survey or contact form, make sure the answers are immediately forwarded to a team that can respond as necessary. Give each channel a unique landing page in order to accurately track which efforts were most effective.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 31 B1. Multi-Channel – New challenge across sales channels, both online and offline Buyers are now very good at blocking information, making it harder to get traditional and online marketing to work Source: ICG expertise, secondary research Old and new forms of marketing face increasing challenges in delivering returns on investment. Cold calling is not working as few people have a land line. Forrester Research and the Google Global Mobile reports forecasts that by the end of 2015 there will be more mobiles in the world than people – most of these are unlisted numbers. Even with relatively new channels such as web advertising, the old model is increasingly broken. Advertising on the web is now encountering a surge in consumer usage of ad blocker software. Despite ad blocking software being around for ten years, Page Fair Research in mid 2014 reported a surge in ad- blocking of 117% in 2013 and 166% over the year and a half since January 2013. Whilst globally only 5-10% of all internet users use ad blocking software, 63% of Google Chrome users and 30% of Firefox users have ad blocking tools. Email marketing is also facing the challenge with spam protection software and Gmail using priority in box to block unwanted mail. THE SURGE IN AD BLOCKING SOFTWARE

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 32 B1. Multi-Channel – Case Study: Telecommunications industry Reinventing telecom distribution to adapt to a multi-channel environment Source: secondary research, ICG expertise 3 Levers To Successfully Reconfigure Distribution Channels 1.Key to success is to adapt to customized distribution – Telecom operators need to redirect their distribution network towards a model focussed on customer experience and retention (i.e. modify and trim footprint) – carefully evaluating which stores to close – based on a micro-economic analysis of shopping mall and market share potential 2.Invest into multi-channel enablers – developing an integrated online strategy with physical stores and other channels Rolling out ‘click and collect’, creating rebounds between off-line and online to enhance traffic in physical stores Blending on-line and in store experience, e.g. “Showrooming” with online capability 3.Refresh and combine bricks and mortar concept stores with proprietary experience Re-invented concept stores driving more sales (e.g. Apple stores accounted for ~12 % of 156bn total sales in 2013) 3 Trends are Shaking Up Telecom Distribution 1.More and more consumers prefer on-line shopping, even for telecom services On line distribution has become mainstream: in advanced markets more than 31% of internet users have already purchased mobile devices on-line according to recent surveys 2.Customers utilize multichannel intelligently to meet their needs – creating an integrated channel experience is paramount Multichannel environment is driven by (ROPO) – “research online – purchase offline” Over 80% of in-store visitors have visited the company website 3.Physical distribution has re-emerged as a key factor for growth, albeit on a revamped platform Telecom operators increasingly concerned that distribution networks are becoming a driver of cost, rather than revenue Changing customer behaviour, preferring to research and shop online, is driving the requirement to revamp the distribution footprint and channel mix SITUATION

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 33 B1: Multi-channel – Case study: Argos Customers value multi-channel shopping Note: multichannel refers to using multiple channels to complete one purchase Source: ICG analysis, company websites Example of one of the most successful multi-channel¹ retailers is Argos, a UK merchant with a focus on Technology, Home and Health products £2 Bn in revenue, 750 stores 51% of all sales were multi-channel in 2013 42% of all sales are online, of which 10% was captured by mobile shopping Sales Mix by Channel Argos 2009 -2013 MORE THAN HALF OF ARGOS SALES NOW MULTI-CHANNEL KEY TAKE-OUTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 34 B1: Multi-channel – Case study: Apple Physical distribution ‘reinvented’ can be key growth factor Source: ICG analysis APPLE RETAIL SALES ACCOUNT FOR 12% OF SALES IN 2013KEY TAKE-OUTS # of stores 116165197247273317357390 Apple Store Sales (2005-2012) Net sales (USD bn) Example of the turning point in Apple’s retail strategy Apple has smartly combined online with physical retail. Apple stores are a showcase for their product and allow potential customers to discover and try everything before they buy – online and in store In 2001, the first store was opened by Steve Jobs As of December 2013 Apple has 415 stores in 14 countries This channel equates to ~12 % of Apple’s $156 bn of total sales in 2013

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 35 Source: PWC FS viewpoint B2. Customer Centricity – An issue for health insurers Health insurers are struggling to deliver customer experiences that gain customer trust Over the last decade, insurance companies have struggled to meet customers’ rising expectations – influenced by their experiences with retail and other industries – for greater price transparency, top-notch customer ratings and reviews, real-time response to service requests 24/7 and more. Why are carriers struggling to improve the customer experience? Three obstacles are making it difficult for insurance companies to implement customer experience initiatives: 1.Lack of Customer Insight: Insurers know little about their end customers because historically they viewed producers as their customers 2.Barriers to Self-Service Experience: A growing number of customers want to self-serve, but product and process complexity (i.e. unfamiliar language and too many product options) makes this difficult 3.Fragmented Operating Models: Insurance carriers’ operating models lead to inconsistent customer experiences. And, they make it difficult for carriers to gain the complete view of customers that is needed to design tailored solutions As a result, carriers struggle to meet customers’ evolving needs, and they face declining customer retention rates, as well as loss of market share

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 36 B2. Customer Centricity – Lessons from the life insurance industry Life insurers generally score poorly on customer loyalty, advocacy, and trust 36 Source: Customer Loyalty and the Digical Transformation in P&C and Life Insurance: Global edition 2014, Bain & Company, 2014. LOYALTY TRENDS AROUND THE WORLD A Bain report on customer loyalty in the insurance and life insurance industry indicates wide variation in life insurance by country. Factors influencing loyalty include: Geography/culture: local perceptions and market traits account for some of the variation Loyalty leaders in each country tend to be locally based and use a mutual model, whereas multi- nationals and other local business models have lower NPS. Mutuals often have a customer-centred mindset and experienced salesforces, and they are able to offer lower prices than most other traditional carriers. Leaders are often multi-line providers. Customers generally give a higher NPS when they have both life and P&C products with their main provider. Being in touch with customers has a large positive effect on loyalty for both life and P&C. Promoters beget promoters. NPS is higher for people who primarily relied for their purchase decision on a recommendation from someone they know or from social media platforms, or who had a prior relationship with the carrier. NPS PER COUNTRY, LIFE INSURANCE

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Individual insurance Group insurance Group Retirement Affinity insurance Commercial DirectAgent/brokerCall Center Products Channels 37 Source: PWC FS viewpoint B2. Customer Centricity – Lessons from broader insurance Fragmented operating models, as well as legacy systems and processes, limit insurers’ ability to develop integrated customer-centric products and services Most carriers are still managing their business units and technology independently – giving customers a very disjointed and inconsistent experience. Traditionally, carriers have organized their operating models and technology as product-centric business units. This means that customer experience initiatives are often implemented independently within divisions or product lines. Further, legacy systems and processes make it difficult for insurers to develop integrated, customer-centric products and services. Many insurance carriers have grown by M&A, and they now have to deal with a variety of legacy systems and processes that have not been integrated. Because of this, their data is often inconsistent. These carriers often find it difficult to gain a single view of the customer. Such piecemeal solutions lead to conflicting priorities and overinvestment without significant long-term results – and they don’t add up to a positive customer experience Product, function, and channel silos limit the ability to identify and address all of the customer’s needs

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 38 Source: Bain, “The powerful economics of customer loyalty in Australia,” 2013; https://experiencematters.wordpress.com/2013/11/13/report-net-promoter-score-benchmark-study-2013/ B2. Customer Centricity in Health Insurance Health insurers have struggled to create positive customer experiences, hindering their ability to build trust with customers NET PROMOTER SCORE ACROSS INDUSTRIES – AUSTRALIA NET PROMOTER SCORE ACROSS INDUSTRIES – USA Overall, customers feel satisfied with their health insurance providers; however, current satisfaction levels do not translate into loyalty and follow-on revenue opportunities Health insurers have struggled to deliver to customer service expectations creating frustrating experiences for their customers on basics such knowledgeable and well-informed customer service staff, waiting times for service enquiries, first time problem resolution, and after hours service availability In short, there is a large gap between what matters to the customer and the perceived performance of health insurance companies

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 39 B2. Customer Centricity – Customised communications as part of the onboarding process contribute to customer retention Source: “Next Generation Customer Onboarding”, PitneyBowes CUSTOMER ON-BOARDING FRAMEWORKKEY ATTRIBUTES & INSIGHTS Delivering personalized communications requires more than just manually tailoring a document template. Key stumbling bocks include: Lack of control in the content that is delivered to the customer Lack of consistency in the messaging that is delivered to customers across channels, or between branches Lack of integration with internal CRM, legacy, or onboarding systems Lack of automated services, relying instead on time consuming manual data entry and manipulation By implementing an automated enterprise customer communication management (CCM) solution, financial institutions have benefitted from increased control and consistency of all communications across a variety of distribution channels. Enterprises investing in an advanced CCM system report a return on investment (ROI) within one year

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 40 B2. Customer Centricity – Integrating the middle office process for multi-product customers eliminates a lot of their frustrations Source: “Customer centric banking” Infosys 2013; secondary research INFOSYS ON- BOARDING FRAMEWORK KEY ATTRIBUTES & INSIGHTS In the banking industry, involving the customers in the mid-office function on the onboarding process can provide benefit such as: High quality data, fewer issues in customer data Integrated view of customer profile across the bank, improving up selling and cross- selling opportunities (it has been proven that majority of cross sell happens in the first 90 days of customer relationship) Improved customer connection Efficient on-boarding process is key to customer satisfaction, customer acquisition and retention strategy of the organisation

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 41 Source: “Customer Centricity Retail Banking” BCG 2013 B2. Customer Centricity – How to achieve it The role of each channel should be driven by the overall customer strategy THREE EMERGING MODELS OF CUSTOMER CENTRICITY A customer / customer retention strategy is a pre-cursor to channel design The “ Guardian” model suits an independent sales agent channel whereas “Retail” and “Convenience“ suit more direct and digital channels However, the modern buying and loyalty process demands that all channels play a role in retention. KEY ATTRIBUTES & INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 42 B2. Customer Centricity Five best practices to improve customer service and loyalty Source: Ernan Ronan “Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay.” As quoted in http://www.huffingtonpost.com/ernan-roman/customer-service-best-practices_b_1028778.html Celebrate the Victories Give Frontline Service People More Authority & Respect Re-examine Your Compensation Plan Do a Skill Set Assessment Create an Effective "Soft Skills" Training Plan Remember to highlight what your top service performers do well. If it's been a while since your customer-facing team members were credited for doing something right, change that! For instance, you might provide people the autonomy to spend up to a certain dollar amount to resolve customer problems... and then turn those employees who spend those corporate dollars effectively into internal role models for the rest of your organisation If the pay your customer service personnel receive is not commensurate with what your company says about its belief in good customer service... then you won't attract top notch people who can deliver on that promise. Too often, customer service people know all about the technical and product/service feature issues, but have not received thorough and on-going training on people skills and effective customer engagement. If some of those people are simply not cut out for the empathetic, "people-first", task of hearing customers out, making them feel heard, and cheerfully solving their problems, you need to reassign them. This will lift the morale, and strengthen the customer focus, of everyone who remains

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 43 B2. Customer Centricity Good recovery can turn angry and frustrated customers into loyal customers (under certain conditions) Source: VP Magnini et. al., “The service recovery paradox: justifiable theory or smoldering myth?,” Journal of Services Marketing 21, no. 3 (2007): 213-225. CA de Matos, JL Henrique, und C Alberto Vargas Rossi, “Service Recovery Paradox: A Meta-Analysis,” Journal of Service Research 10, no. 1 (2007): 60 The “service recovery paradox” states that with a highly effective service recovery, a service or product failure offers a chance to achieve higher satisfaction ratings from customers than if the failure had never happened. Analysis showed that a service recovery paradox is most likely to occur when: the failure is not considered by the customer to be severe the customer has had no prior failure with the firm the cause of the failure was viewed as unstable by the customer and the customer perceived that the company had little control over the cause of the failure. KEY ATTRIBUTES & INSIGHTSRECOVERY PARADOX

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 44 Source: “Keeping promises, Putting customers at the heart of retail financial services”, Deloitte; “The journey toward greater customer centricity”, EY 2012 B2. Customer Centricity – through focusing on the customer journey Loyalty and good customer outcomes are the end destination of the interaction journey CUSTOMER JOURNEY AND VALUE ADDED Loyalty is the end goal of the customer journey Overall customer experience is influenced by customers’ direct and indirect interactions with an organisation Both physical and digital touch points need to be managed effectively in order to maximise the experience. KEY ATTRIBUTES & INSIGHTS Best in class organisations display the following characteristics: Defined experience for customers across the lifecycle Simple products that are easy to understand and configurable Transparent processes Integrated channel experience.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 45 B2. Customer Centricity Bupa is focusing on customer centricity with its new stores and digital platform Source: BUPA Annual report 2013 KEY POINTS The introduction of Net Promoter Score is helping the health insurance business better understand and consistently meet customer expectations. In the first year of measurement our score increased by around four percentage points This increase has been underpinned by a number of initiatives such as ‘Find a Provider’ and ‘Effective Payment Options’, which have improved the customer experience, made claiming simpler and enabled customers to make more informed choices in health service providers. The new customer centric designed digital platform (different applications) and stores helped increasing the score CUSTOMER-CENTERED STORES

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 46 B2. Customer Centricity – Bupa has been awarded the Best CX Leading Initiatives award Recognition of its efforts to transform into a customer-centric organization Source: BUPA Annual report 2013; http://www.gooddesignaustralia.com/awards/past/entry/bupa-customer-experience-design-tools/?year=2014 KEY FEATURES Employing Human Centred Design to achieve a shared understanding of customers: integrating a Human Centred Design approach with existing techniques within the business to overcome this challenge Empowering a large organisation to meet identified customer needs: highly visual approach to presenting the research contributed to the swift adoption of the tools across broad areas of the business Using a shared understanding of customers experiences to drive business activity: Mapping and articulating customers’ health episode journeys, through the point of view of the customer, has allowed internal Bupa people to begin a cultural shift towards considering the customer’s whole end-to-end journey through the health system Proving the business value of customer-centricity: fact based decision making has been enabled, grounded in customer insights and prioritisation based on thorough customer and business benefit analysis Designing the future of customer centric healthcare: stakeholders from frontline people to director level as well as customers worked together in workshops to design solutions together that would address both articulated and unarticulated customer needs. These ideas were then iterated and developed into12 prioritised solutions to be tested with customers to gauge desirability, usefulness and usability. BUPA - CUSTOMER EXPERIENCE DESIGN TOOLS The Customer Experience Design team is a team of Human Centered Design experts who work as internal consultants, guiding and enabling new ways of working and customer centric thought leadership throughout Bupa In 2013, as a result of a large-scale ethnographic research project, the Customer Experience Design team created a suite of tools that help employees across Bupa Australia Health Insurance understand customer needs, and empowered employees with the tools to deliver greater customer centricity The widespread uptake has had an immediate impact on the customer-centric culture at Bupa Created some ground breaking projects such as “Voice of the Customer”, which collects customer feedback in real time

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 47 Source: secondary research B2. Customer Centricity – Health.com.au Online health insurance insurer providing a frictionless customer experience Health.com.au is a new online health insurance provider Promotes customer journey simplicity in using the website Main customer proposition is paying out the same proportion of costs - no matter which medical practitioner people visit Medibank and Bupa, on the other hand, are moving towards promoting networks of preferred practitioners Main customer acquisition channels are: Customers switching from Bupa and Medibank Aggregators – mainly iSelect KEY POINTSHEALTH.COM.AU MAIN ACQUISITION CHANNELS AGGREGATORSINDUSTRY LEADERS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 48 B3. Cross-sell – Teachers Health example Source: secondary research Part of the “Members Own Health Fund” Have expanded beyond core health fund product to add additional insurance products, in partnership with QBE Cross sell through offering QBE General Insurance and Travel Insurance: o “Teachers Health Fund is excited to be entering into a partnership with QBE to provide members with a comprehensive range of insurance products including Car Insurance, Home & Contents and Landlord Insurance with multi-policy discounts available” KEY INSIGHTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 49 B3. Cross-sell – NIB product design principles Source: NIB investors strategy day, 2014

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 51 C1. Customer Segmentation Demographic, product and channel segmentation methodologies tend to prevail in the health insurance industry in Australia and the US Source: PHIAC, “Competition in The Australian Private Health Insurance Market,” 2013; CANSTAR, “Health Insurance Star Ratings Report,” 2014; Booz & Company, “The Future of Health Insurance Demise of Employer-Sponsored Coverage Greatly Exaggerated,”, 2011. PRODUCT-BASED SEGMENTATION – AUSTRALIA DEMOGRAPHIC SEGMENTATION – AUSTRALIA CHANNEL-BASED SEGMENTATION – US SEGMENTDESCRIPTION MedicareGovernment-administered national social insurance program for providing health insurance to elderly and disabled MedicaidGovernment health insurance program for low income individuals and families Health Exchanges Market places to facilitate comparison and purchase of health insurance by individuals Employer- sponsored Companies (small: <50 employees; mid-sized: 50-1000 employees; large 1000+ employees)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 52 C1. Customer Segmentation However, some health insurers are adopting more sophisticated segmentation methods to gain deeper insights into their existing and potential plan members … Source: SouthStreet Strategy Group, “A new Approach to Segmentation for the Changing Insurance Industry” SEGMENTATION BY PLAN AND SERVICE ATTRIBUTES (US) Segmentation based on customer preferences towards and importance attached to: Coverage Cost Technology Health and wellness Preventative care DETAILED SEGMENT DESCRIPTIONS SEGMENTDESCRIPTION The Traditionalists (34%) … … desire full coverage at a low cost. They want coverage from out- of-network providers and easy access throughout the country. Unrealistically, they are a group most concerned about cost, but also the most interested in premium services and having a healthcare advocate. Despite concerns about costs, they are NOT willing to participate in health activities or doctors’ visits for financial incentives The Easy- Does-Its (26%) want coverage from out-of-network providers and easy access when traveling. They are willing to have annual physicals, participate in activities to improve heath to save money, and are somewhat willing to switch primary care providers. About one-in-three would like a healthcare advocate to help with reimbursements, scheduling and complexities. They do NOT care at all about online access or tools. The e-Patients (20%) … … are all about technology. They want to manage healthcare online and are open to e-visits. Out- of-network coverage, knowing and trusting the insurer and low costs are also important. They have weak loyalty as they are completely willing to switch primary care providers for these other benefits. Not surprisingly, this segment is younger, with a large portion under 40 years old. The Unswayable (16%) … … want to manage healthcare online but will NOT switch primary care providers. Despite proclivity to online healthcare management, they are not interested in e-visits. This group is least concerned about costs and also least inclined to want an advocate. The Disconnected (4%) … … is completely unengaged with healthcare insurance and related decisions. They are more likely to be uninsured, skew male, are the least educated, and have the lowest income.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 53 C1. Customer Segmentation … including the use of attitudinal customer segmentation Source: http://blogs.forrester.com/gina_fleming/14-07-11-the_data_digest_introducing_forresters_consumer_healthcare_segmentation SEGMENTATION BY ATTITUDE TOWARDS HEALTH INSURANCE (US) FORRESTER’S CONSUMER HEALTH CARE SEGMENTATION Fitness Trackers are young and love to use wearable devices; in fact, everyone in this segment uses one. The majority agree that that their health and wellness are priorities for them and they try to eat a healthy diet, but close to half believe that they are so healthy that they don’t need health insurance. The Invested And Informed have high incomes and are willing to pay more for better care. They also do their homework when it comes to their healthcare: 81% are confident of their ability to make the right choices with regard to their health benefits, and seven in 10 consider themselves a health decision-maker for their family or household. The Corporate And Content have relatively high average household incomes, but they're still not willing to pay more for a health plan with better benefits. They also represent the highest share of members covered through a family member’s plan. The Healthy And Subsidized are mostly covered through the government, although a quarter have direct access (i.e. they pay all costs out of pocket). Almost half of them are considered low-income, and only 6% suffer from a chronic or serious condition. Apathetics are uninsured and healthy. They have lower incomes and are generally uneducated about their options. They’re the group least likely to have received any medical care, and they’re not confident of their ability to make the right choices with regard to their health benefits. Frugal Patients suffer from a serious or chronic condition; they are the segment most likely to be obese; and they are the oldest. They consume a lot of medical care: Not only have 92% visited a doctor’s office in the past year, but 37% have been to the ER.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 54 C1. Customer Segmentation From customer segmentation, the right time, message, and channel for key messages can be selected Source: “Health Insurers – the Customer engagement”, AT Kearney 2011

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 55 C2. Lead Generation Through Advertising Overall advertising spend dipped in FY13, however, it still high vs. historical levels Source: NIB investors strategy day, 2014

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 56 C3. Lead Generation through Content Marketing Source: Hubspot The proven methodology for the digital age Since 2006, inbound marketing has been the most effective marketing method for doing business online. Instead of the old outbound marketing methods of buying ads, buying email lists, and praying for leads, inbound marketing focuses on creating quality content that pulls people toward your company and product, where they naturally want to be. By aligning the content you publish with your customer’s interests, you naturally attract inbound traffic that you can then convert, close, and delight over time.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 58 C3. Lead Generation through Content Marketing Content Marketing in Australia 2014 (1/2) Source: http://www.cmo.com.au/article/560079/aussie-marketers-struggling-effective-content-marketing/ CONTENT MARKETING SUCCESS METRICS GETTING CONTENT MARKETING RIGHT According to the fifth annual Content Marketing in Australia 2015: Benchmarks, Budgets and trends, produced by the Content Marketing Institute (CMI) and ADMA, content marketing accounts for 27% of the total marketing budget, and nearly two-thirds of respondents will increase spending in the next 12 months 29% of Australian marketers rated their use of content marketing as effective, down from 33% last year The ratio rose to 44% across those with a document content marketing strategy (37% of total respondents) A further 46% said they had a content marketing strategy that it was verbal only The report also found 39% of respondents now maintain a dedicated content marketing group,27% of which work horizontally across the organisation and 12% as an independent unit The report authors noted the most effective marketers are more likely to have a dedicated group for content marketing (54%) The top metric being used to gauge content marketing’s success is website traffic (60%), followed by higher conversion rates (46 %) and sales (46%)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 59 C3. Lead Generation through Content Marketing Content Marketing in Australia 2014 (2/2) Source: http://www.cmo.com.au/article/560079/aussie-marketers-struggling-effective-content-marketing/ SUCCESS IN TRACKING ROI IN AUSTRALIAN MARKETERS GETTING CONTENT MARKETING RIGHT Overall, however, only 20% believe they are successful at tracking content marketing’s ROI, and 13% said they still did not track at all Across the board, 74% of respondents created more content in the last 12 months, a decrease of 7% year-on-year On average, Australian marketers are targeting four audiences, increasing to five audiences in organisations with at least 1000 employees On average, 12 tactics are being used in content marketing, a list topped by social media content – other than blogs, articles on the brand website, and email newsletters A rising star this year was in-person events, which are being used by 74% of respondents and also ranked highest tactic in terms of effectiveness by 65% of those surveyed Other strong content types for effectiveness included email newsletters (62%), blogs (62%), and whitepapers (61%) Having a documented content marketing strategy clearly drove positivity, and 33% of those who maintained such a strategy said they were successful at understanding’s content’s ROI to the business

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 60 Source: iclick Interactive & Happy Marketer C4. Lead Capture at Bupa Bupa is a pioneer in leveraging paid search as a key medium in driving product awareness and sales leads, then using analytics to optimize Bupa spent the past year building a deeper understanding of the reasons why consumers choose to leave using data and research Used data to develop firmer segment-level propositions for each of Bupa’s target markets, such as youth and elderly consumers Uncovered sizable insights and pieces of information from which to draw conclusions on key issues, e.g. improving satisfaction, increasing customer service, putting something new into the market, or an untapped opportunity Business units worked with analytics team in a client-supplier model; analysts then fed their data outputs into the strategy team, responsible for collating those into actionable insights Bupa ultimately developed a strategy around multi-digital channels for a simplified customer conversion funnel (awareness, interest and purchase), with the aim to not only engage a much broader base of audience, who are scattered across channels, but also influence customer preference along the funnel to increase the likelihood to convert LEVERAGING ANALYTICS KEY STRATEGIC ACTIONS Wider reach of audience More relevant messaging to cater to channel-specific behaviour Cost efficiency Create a sense of trustworthiness Long-tail strategy and in-depth keyword diagnosis Creative adaptation to mobile environment Wide selection of local forums and customised topics

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 61 C4. Lead Capture – Case Study: PTT Research & Hubspot Guiding prospects through the buying cycle with tailored, high impact content Sources: http://www.hubspot.com/customers/ptt-research and PPT Research Services http://customerthink.com/how-your-call-center-agents-can-convert-more-leads-into-buyershttp://www.hubspot.com/customers/ptt-research PTT Research is a web-based financial media company. The PTT Research team features some of the most regarded research analysts on Wall Street united around a vision of independent, un- compromised, real-time investment research-as-a-service. PTT Research publishes it research on both its subscription-based site, pttresearch.com, and its free blogs Poisedtotriple.com, wallstreetforensics.com, and solarstocksideas.com. HubSpot tools allow PTT Research to guide prospective customers seamlessly and purposefully through the buying cycle, from the time they first visit one of the optimized landing pages all the way to signing up for a paid subscription with fresh and repurposed content. HubSpot analytics gives the team deep, real-time actionable intelligence about visitor’s behaviours and provides a roadmap for where and how best to engage them.optimized landing pagesanalytics Leveraging email and marketing automation apps, PTT Research strategically delivers high-impact, personalized content such as newsletters, investment endorsements, and special offers on investment reports to thousands of visitors, moving readers closer to purchase at every touch point. Along the way, they use Smart CTAs to dynamically populate different offers and content to different viewers based on what they care about most, optimizing relevance and, ultimately, driving higher sales PTT RESEARCH COLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 62 C4. Lead Capture through Channel Integration 8 ways to give marketing more leverage with an integrated approach to channels (1/2) Source: www.cmo.com.au http://www.cmo.com.au/article/536112/8_ways_use_web_analytics_increase_online_sales/www.cmo.com.au TitleDescription Email & Social Media Most lead generation efforts collect a very vital communication staple -- email addresses Adding social elements to emails enables to expand the reach of email sends beyond just direct recipients by adding social media sharing buttons (e.g. 'Share on Facebook!' 'Tweet This!' 'Share on LinkedIn' '+1 This!') to every email Use email to increase social media following by adding social media follow/subscription Email & Blogging/Social Media/PPC Treat new offers like mini campaigns Align promotion with other channels such as blog, social media accounts, and PPC campaigns Make sure to promote the new offer through social channels by posting updates with links to Facebook, Twitter, LinkedIn Support efforts with a pay-per-click campaign featuring the offer Eliciting the power of multiple channels will equate to greater success Email...and Other Email Different types of email have some starkly contrasting purposes Integrate various email marketing efforts Create a master email planning document to make sure to leverage various communications and not hitting the same prospects and leads with too much email in a short amount of time Segment email database by demographic and behaviours (using lead intelligence and information from form completions) Social Media & Blogging Blogging and social media can have quite a symbiotic relationship Social media can serve as an effective promotional vehicle for business blog content and help drive traffic to blog, and blog can provide fresh content that can be used to keep social media accounts updated regularly and consistently to engage and grow business' social audience – a great cross-channel relationship Make sure every blog post published includes social media sharing buttons so readers can easily share content with their social networks Feature social media follow buttons on blogs so readers can easily follow social media accounts Consider automating social media so blog posts automatically get published to social accounts

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 63 C4. Lead Capture through Channel Integration 8 ways to give marketing more leverage with an integrated approach to channels (2/2) Source: www.cmo.com.au http://www.cmo.com.au/article/536112/8_ways_use_web_analytics_increase_online_sales/www.cmo.com.au TitleDescription SEO & Blogging Make sure SEO and blogging strategy are well-aligned and that blog content is optimised with the keywords for which the business is seeking to rank high in search engines If currently pushing to rank for a specific keyword, the blogging strategy should support that Online and Offline Events & Social Media Live online and offline events can be made much more successful when social media is involved - effective integrations of social media can help you generate buzz before, during, and after the event Create a hashtag for the event, and start promoting and using it It will enable people to follow the conversation happening about the event and help driving more registrations prior to the event During the event, make sure audience knows about that hashtag to enable them to have conversations with both fellow attendees and those sitting at home who aren't able to attend After the event, continue to use the hashtag to share post-event, downloadable Mobile & Everything! Integrating mobile into marketing strategy is a full post in itself, since it’s possible to integrate mobile with other channels in a number of different ways Different ways to be more creative in integrating mobile into other marketing channels, like leveraging QR codes to merge offline and online marketing Possible to leverage mobile check-in applications like Foursquare to merge mobile and social media marketing Analytics & Everything Analytics should absolutely be integrated with marketing The most successful inbound marketers measure absolutely everything about their marketing The most effective way to leverage analytics is to use a tool that integrates with other channels – it should also be integrated campaigns perform Should provide with closed-loop data to analyse how effective channels are at generating not just leads, but also customers

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 64 C5. Lead Qualification – Case Study (Pointclear) http://www.pointclear.com/case-studies/lead-development.php Lead Development: Turning Raw Leads into Opportunities The Objective was to convert Marketing Leads to Sales Prospects A US software company had a highly successful marketing department generating more than 20,000 potential prospects who responded with interest to the services offered by the company by registering for and attending events, visiting the website and campaign-specific landing pages, and downloading white papers, case studies and other industry information. The challenge was lead qualification. Step 1: Delivering Segmentation for Enhanced Efficiency The client had been scoring prospects based on company size, industry type and level of seniority. Testing these variables, plus others, yielded somewhat surprising results. While the marketing team had prioritized prospects one way, they learned after just four weeks that there was one variable that was more important than any other: title. Testing proved quantitatively that if the prospect’s title included one specific word, then the target had a higher value. The revelation was that it was more productive to talk to those who had a specific accountability, as opposed to those with general interest and a desire to educate themselves, but no real responsibility. Step 2: Measuring Touchpoint Frequency and Cost Benefit Another significant result of the month-long testing was measurement of ideal contact frequency. Measuring the incremental cost benefit of each touch—calls, voicemails and emails. The resulting numbers represented another “aha” moment. Tracking showed that 88% of opportunities generated happened within the first three contacts: Further attempts to contact were simply not as effective. Step 3: Closing the Loop with Marketing The lead development program provided valuable feedback to the marketing team regarding the effectiveness of specific trade events. As a result, the company has been able to better understand its best lead sources, e.g. a good source of leads is one that converts at a 20% level. If raw leads generated through a specific tradeshow convert, for example, at a 12% level, marketing can adjust its investments to achieve better results and improve overall ROI. 1.Test variables that underpin market segments 2.Rigourously monitor touchpoint frequency and effectiveness to understand the ‘point of diminishing returns’ 3.Ensure that learnings are incorporated into how marketing budgets are spent, in order to close the loop and maximise overall ROI and lead conversion 4.Measure performance –in this case the client generated impressive results: o 22% of more than 20,000 raw leads converted to qualified leads o 10% of qualified leads converted to sales opportunities, resulting in $2.2m in closed business KEY INSIGHTS SITUATION AND STEPS TAKEN

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Results: -23% annual compound revenue growth last 10 yrs. -36% revenue improvement for Top 10 clients in 2012 65 C5. Lead Qualification – Case study: RPM Group Source: RPM Group International REVENUE PERFORMANCE DIAGNOSTIC REVENUE SCHOOL REVENUE BLUEPRINT IMPLEMENTATION Provides an understanding of what is working and what is not. It provides the base line from which to measure the improvement. Build the revenue blueprint Client Examples: RPMG works with organisations to assist them with the development of their lead tracking / management Key design considerations addressed by RPM

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 67 D. Sales Process – A Useful Framework Showing the Limited Influencing Window on Sales Source: Peter Strohkorb Consulting International, 2015 up to 90% of decision making is completed Online EngagementOffline/Person Engagement Inside Sales’ Scope Outside Sales’ Scope

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 68 D1. Channel Selection – Overview of PHI Distribution 6 Channels Typically Used by Australian Health Insurers Source: Medibank investor prospectus 2014 In Australia, PHI policies can only be offered by entities that are registered as private health insurers with PHIAC, the independent prudential regulator Standardised product disclosure, new technology and comparison websites allow the public to compare PHI products As a result, some private health insurers have shifted away from traditional retail store distribution channels toward online distribution Smaller private health insurers are leveraging online channels heavily, such as health.com.au Growing trend of micro segmentation through tailored distribution strategies of certain brands KEY POINTSCHANNELS Retail locations: private health insurers retail store network Telephone: call centre operations used to sell and inform customers Online: private insurers websites Comparison websites: websites operated by third parties Corporate distribution: via corporate arrangements and contracts, usually offering discounts, subsidies, and benefits Partnership and Alliances: cross selling

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 69 D1. Channel Selection – Case Study Medibank Retail locations still drive 1/3 of sales, however this is in decline Source: Medibank investor prospectus 2014 MEDIBANK CUSTOMER ACQUISITION BY CHANNEL (FY12-FY14) As at 30 June 2014, Medibank Private had a significant national retail distribution network of more than 90 retail locations to assist with the sale of Medibank-branded PHI products, maintain strong brand awareness and service its customers Medibank-branded PHI products are not sold through comparison websites which typically incur an increased Policyholder acquisition cost

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 70 D1. Channel Selection – Case Study NIB Use retail channel to focus on older demographic Source: nib Investor Strategy Day 2014 Presentation NIB MONTHLY SALES BY CHANNEL (2007-2014) Key Call-outs Sales mix is changing based on optimising the cost of acquisition across channels o Web has decreased over time Recent reduction in retail brokers (as a % of all sales), as channel now focussed on over 55s Introduction of Apia as new channel from 2 June 2014

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 71 Source: “Digital distribution in insurance: a quiet revolution”, Swiss re Sigma 2014 D1. Channel Selection – Emergence of online in insurance distribution The internet is increasingly becoming a trusted source of advice Consumers are growing more comfortable with the internet as a trusted source of advice In Latin America, while the internet is less trusted than direct contact with the insurer, it is more trusted than family and friends or the advisor/broker/agent channel This contrasts somewhat with the situation in other regions such as North America and Asia, where some surveys indicate that advice from intermediaries still tends to be highly valued relative to online sources The increased availability of information and online tools – from insurers’ own websites, to expert and consumer blogs, to chat rooms – has enabled consumers to better assess the risks they face, and the potential use of insurance to mitigate those risks A wide variety of information and advice is available online for commercial insurance, particularly for small businesses KEY INSIGHTSSHARE OF CONSUMERS WHO TRUST A PARTICULAR CHANNEL THE MOST

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 72 Source: “Customer centric banking” Infosys 2013; secondary research D1. Channel Selection – Lessons from banking Integrating the middle office process for multi-product customers eliminates a lot of their frustrations INFOSYS ON-BOARDING FRAMEWORK KEY ATTRIBUTES & INSIGHTS In the banking industry, involving the customers in the mid-office function on the on-boarding process can provide benefit such as: High quality data, fewer issues in customer data Integrated view of customer profile across the bank, improving up selling and cross-selling opportunities (it has been proven that majority of cross sell happens in the first 90 days of customer relationship) Improved customer connection Efficient on-boarding process is key to customer satisfaction, customer acquisition and retention strategy of the organisation

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 73 D2. Telemarketing Deep Dive Consumers still use the phone as the channel they rely on most when they have queries, particularly when trying to resolve complex problems Source: The autonomous customer 2013, Avaya research CONSUMERS’ CHANGING USE OF CHANNELS TO CONTACT ORGANIZATIONS WHEN YOU HAVE PROBLEMS WITH INTERNET SELF-SERVICE, WHICH HELP WOULD YOU PREFER?

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 74 Source: “Why Everyone Hates Telemarketing, But Shouldn't”, Direct Marketing 2013 D2. Telemarketing Deep Dive An important channel to support sales …a deal closer. A good B2B telemarketer uncovers an opportunity and hands it off to a salesperson to continue the conversation …cost-effective for small-ticket item sales. Costs per opportunity can be $350 to $600 or more, so it's most cost- effective for large deals …easy. Many in-house initiatives fail (for numerous reasons) or companies use telemarketing services not geared toward a B2B audience B2B TELEMARKETING IS BEST SUITED FOR: TELEMARKETING IS NOT… Lead generation: Identify prospects and opportunities Appointment setting: Set a meeting to facilitate action Follow-up: Use as a follow-up to other marketing efforts to determine the responder's intent Lead nurturing: Stay in touch with interested prospects because while they may not be buying now, they likely will down the road List cleaning: Contact lists get dated quickly; determine if targets are still the same contacts before launching a campaign Database building: Set up for long-term success by building a contact database that can continually market to Channel nurturing: Improve relationships and partner sales effectiveness Event support: Generate traffic for events or webcasts Message/offer testing: Test messages or offers before rolling out to a wider audience

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 75 Source: “Why Everyone Hates Telemarketing, But Shouldn't”, Direct Marketing 2013 D2. Telemarketing Deep Dive B2B marketers typically use telemarketing for lead generation TO BUILD A SUCCESSFUL LEAD GENERATION PROGRAM Commit to long-term success: the program needs to be built on a database, have tightly defined criteria, have hot opportunity handoff and issue escalation processes, and use a trained team. Not a scripted team, but a team that is trained in the subject matter, program goals, and customer pain points Create opportunities: When utilized to target high-value accounts, telemarketing represents a highly effective method to penetrate organizations and determine who within has a need for or cares about your solution. If this isn't happening, there are bigger issues at play, ranging from wrong message and wrong audience to bad list. With telemarketing, it’s clear immediately which messages resonate and which are dead on arrival Create a database for marketing success: often, companies will discard a name because that contact is not an immediate opportunity. After paying to identify that person as someone with an interest—even a small interest—why not nurture that contact until they become an opportunity? There's value in that contact, so market to them again. It’s possible to lukewarm/cool prospects eventually turn into hot opportunities—at an up to 50% conversion rate Use business intelligence: when a telemarketer talks to a prospect, there is an exchange of information. The team needs to be trained to capture those details. Looking through the call reports, it's amazing what it’s possible to learn about audience's disposition regarding a product or solution or what a prospect is really looking for to solve a business challenge. Looking at telemarketing from a cost-per-lead measure may be an eye-opener for many. Cost for the function will be high compared to email marketing, but the returns tend to be significantly higher. Add in the long-term value of a contact, and the cost-per-lead and conversion to sales become even more attractive.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 76 D2. Telemarketing Deep Dive – What works best? Outside, inside, or online sales? Considerations in lead conversion effectiveness by sales channel Source: http://blog.getbase.com/outside-vs-inside-sales-business-and-individual-perspectives low cost medium reach high throughput medium touch high cost low reach low throughput high touch lowest cost highest reach highest throughput low touch OUTSIDE SALESINSIDE SALESONLINE SALES Outside Sales: A salesperson who spends most of their work time away from the company’s place of business. Anyone who travels most of the time to meet up with clients and make sales face-to-face is likely qualified as an outside salesperson. Inside Sales: Inside sales once happened mostly over the phone. Now they might happen over Skype, email, or other online communication services as well, but the principle is the same: inside salespeople work at a desk. Their main channel for making sales is through telecommunications.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 77 D2. Telemarketing Deep Dive Trends pointing to inside sales displacing field sales teams Source: http://blog.pointclear.com/bid/117119/10-Reasons-Why-Inside-Sales-Will-Displace-Field-Sales-Teams-by-2015 1.Inside sales teams continue to grow at 15% each year. The hybrid salesperson will emerge, and they will be technically, culturally, socially, and skilfully diverse and astute. 2.The average cost of an outside B2B sales call is $215-$400 per call. An inside call, on the other hand, averages only $25-$75. 3.It is expected that 85% of buyer-seller interactions will happen online through social media and video. 4.Today, we have 20 million salespeople. But that number is predicted to be reduced to 8 million by the year 2020. Why? Mainly because the customer won’t need to engage early in the sales cycle: 57% of the buying process is completed before connecting with a salesperson. 5.Structuring a global workforce and creating geographic territories will be a thing of the past because today’s salespeople work virtually, socially, and inter-culturally. The increased sophistication of translation software will enable computers to quickly translate languages, reducing the need to hire reps who speak the native language. 6.Virtual interactions will replace face-to-face field visits. Right now, Skype, web conferencing, and video are quickly catching on over face-to-face visits and traditional meetings. Some futurists predict the emergence of reality technology—we can watch 3-D holographic images of one another while simultaneously viewing documents on our desktops and laptops (or whatever replaces them!). 7.Scheduling an on-site meeting with the committee of decision-makers will be almost impossible—especially because the committee of decision-makers now has up to 21 people in it, and most of them telecommute. As many as 100 million people are expected to telecommute to work by the year 2013. They will be calling from home or another wired office. 8.A whopping 40% of the companies that were at the top of the Fortune 500 list in 2000 were no longer even on that list as of 2010. The first areas to go are field sales teams. 9.Today’s automated/voice recognition technology will increase the verbal commands and recognition that will replace the human voice.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 78 Source: 2014 NIB investors Day D3. F2F Channel Deep Dive Case Study: NIB – the retail broker channel has increasingly become more important for NIB NIB is Australia's fifth largest private health insurer providing cover to more than 900,000 people nationwide Retail broker is the most important channel for NIB after Corporate Retail brokers currently account for around 30% of all policyholder sales Remains a low risk, profitable and scalable channel to target niche segments (over 55s) and new markets Retail broker competition has intensified over past 18 months allowing NIB to not rely on one retail broker for majority of sale volume. This is expected to continue Retail broker strategy over next 12 months is to achieve a higher API per sale subject to close scrutiny over return of investment compared to other channels AVERAGE PREMIUM INCOME BU CHANNEL KEY POINTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 79 Source: www.teachershealth.com.au/about-teachers-health-fund/education-community/business-development/ D3. F2F Channel Deep Dive Case Study: Teachers Health Fund Teachers Health Fund operates a F2F team to drive new member acquisition Represented by 8 Business Development staff across Australia who visit schools and attend events held by education unions, Department of Education and Training and other associated education conferences A number of the team are ex-teachers themselves The team will visit up to 2,000 schools nationwide each year and can offer the following services: o Deliver presentations to groups of staff members o One-on-one consultations o Answer questions from existing members o Review current level of cover to check it is still suitable o Sign up new members TEACHERS EMPLOYS A TEAM OF 8 BDM’S KEY POINTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 80 D4. Sales Effectiveness Best Practices Source: www.davidmeermanscott.com/books/the-new-rules-of-sales-and-service 5 important aspects of modern selling and customer service: 1.Authentic Storytelling sets the tone– e.g. The company’s reason for being, e.g. A video demonstrating real stories of customer situations others can learn by as well as transparency in dealings 2.Content is the link between customers and companies – Providing customers with tailored, relevant knowledge and competitor analysis 3.Big Data enables a more scientific approach to sales 4.Agile selling brings new business to companies 5.Real time engagement keeps customers happy “The buying process has radically changed....Buyers are now in possession of unlimited information so online content is quickly becoming the dominant driver for commerce. Unfortunately most organizations are still using traditional selling and service models developed for a different time.” - David Meeman Scott, The New Rules of Sales and Service The new salesperson: Educates and informs instead of interrupts and sells Doesn’t follow a Sales playbook. Salespeople demonstrate expertise with blogs, video streaming, social streams and e-books etc. The don’t push the product but rather teach individuals about something tailored to their needs. KEY INSIGHTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 81 D4. Sales Effectiveness Best Practices The importance of A/B testing of everything for greater conversion offline and online http://blog.optimizely.com/2013/01/15/how-obamas-campaign-team-sourced-ab-tests-from-user-feedback/ A/B testing of everything, both online and offline can be the difference of 20-40% of opt-in rates. When thinking about A/B testing, the pivotal question is what to test. Ideally you should focus your testing efforts on the page elements that are most likely to have an impact. A great source of discovery for high impact elements can come from focusing on the user experience. Usability studies, user experience research, heuristic evaluations, and surveys can all yield insights into where users have difficulty (and success) using your site. By focusing on fixing the issues, and doubling down on the successes, you’re guaranteed to run tests that benefit your audience. In return, you’ll achieve a big win for your users, and a big win for your business.Usability studiesheuristic evaluations One of the most famous case studies was A/B testing optimisation for the Obama Quick Donate Now campaign. Small changes in copy, for example, from “Save your information for next time” to “Now, save your information”, resulted in a 21% increase in donation opt-ins for information. An additional 44% increase was achieved just by putting a check box and pre-check information. The full case study and landing page optimisation strategy can be found at ttp://kylerush.net/blog/optimization-at-the-obama-campaign-ab-testing ttp://kylerush.net/blog/optimization-at-the-obama-campaign-ab-testing KEY INSIGHTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 83 E1. Skills – Changing Role of the Contact Center Agent As organizations transform to adopt customer experience management (CEM) into their business, contact center agents need both the will and the skill to serve as an engine for CEM Source: CEM Delivery article; Steve Durney THE ROLE OF THE CONTACT CENTER AGENT Contact center agents have become increasingly responsible for the quality of the interactions rather than the quantity The contact center’s agents are brand representatives, and their interactions with customers influence brand perceptions. Contact center agents interact with customers all day, every day. Serving at the front line of the organization, the contact center has a good sense about what customers think of the company and its products and services, and influence it directly Contact centers also serve as a form of inbound marketing. As consumers increasingly opt out of traditional outbound marketing techniques such as telemarketing, email campaigns, and direct mail, their incoming calls bring opportunities for up-selling and cross- selling Recognizing the front-line role that agents play as the voice of the business is critical. Companies that embrace CEM understand the importance of investing in talented, professional agents Agents must be capable of performing higher-level work than simply looking up account balances or giving directions. The skills needed across different channels, interaction types, customer segments, and more vary extensively, making it important to get the right mix of agent skills for each channel, interaction, and segment Managing experiences and relations requires a new breed of contact center agent. Agents can be an organization’s number one asset—or liability

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 84 E1. Skills – The Multi-channel Contact Center Source: COMMfusion LLC article, “Delivering a Personalised Experience – the Multichannel contact center”; Blair Pleasant KEY POINTS By offering customers a variety of ways to reach a business and by using contact center tools that enable more personalized and well-tailored interactions, a company can enhance customer relationships, optimize the customer experience, reduce costs, and make the most of each sales opportunity To be truly customer focused, companies need to think strategically about customer service and care As businesses struggle to differentiate themselves and their products, customer service becomes a critical enabler of success Providing the kind of customer service that today’s fast-paced, mobile society expects requires that businesses adapt to ever-changing market opportunities and customer demands By deploying a multichannel contact center platform providing a single queuing and routing engine for all channels, a single integrated view of the customer, and a single reporting system, businesses can enhance customer service and support while reducing costs TODAY’S CUSTOMER CHANNELS Web Chat and Co-browsing: enables a customer to have an interactive session with an agent via text rather than voice. Cobrowsing comes into play when an agent needs to walk a customer through a site and/or direct a customer to specific pages and pertinent information Web Callback: customers can avoid the wait by requesting that an agent call them at a specific time Email: Email response teams are often used to respond to the burgeoning stack of email. In most cases, these response teams are separate; they sit in silos outside of the contact center Video: for very high- end purchases, personalization can be the difference between closing the deal and an abandoned cart. For service and support, agents can stream instructional how-to videos and/or demonstrate how to fix a problem. Video is also useful, for example, when a subject matter expert, who can be located anywhere around the globe, answers customer questions via a video kiosk SMS/Text: used mostly for outbound notifications and proactive customer service such as appointment reminders Social Media: the incorporation of Facebook and Twitter as customer service channels is on the rise as customers turn to such venues to complain, ask questions, get information, or just to vent. Mobility: customers can navigate through self-service options by using a menu that can be downloaded to and viewed on their device. Using this application, customers can connect with a live agent or request a callback from an agent who will know who they are and what their recent mobile activity has been

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 85 E1. Skills – Contact Centers as Revenue Generators Source: “Calling all Contact Centers”; John Gonovsky, American Bankers Association, November 2013 EXAMPLES & OBSERVATIONS KEY INSIGHTS Call centers now leverage emails, text and web chat in addition to voice They have been reinvented as customer service providers and revenue generators thanks to cross-sell opportunities Customer service is increasingly focusing on problem resolution Ally Bank No branches, completely electronic “The best that a contact centre can do is offer as many channels of services as customers need, and allow them the flexibility and empowerment to pick a channel and then quickly jump to another one if they need it” David Vasquez, Customer Care Executive, Ally Bank Jack Henry Banking Contact Centers can resemble the stereotypical layout of the old –fashioned call center, but the person sitting in the cubicle is a banker and have been banking for some time Some community banks are directing remote customer communications to branch customer service representatives, that don’t get too much foot traffic anymore Mercator Observations Most of the time, contact center representatives are highly trained and can give answers to most of the questions Top notch personnel pays off: customers are happier and there are more products per customer Booz Observations Newly evolved contact centers should be reconfigured to produce revenue by cross selling, on top of customer service and complaint resolution “Banks are now realising that customer service representatives can actually help them identify needs” Ashish Jain, Partner, Booz & Co

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 86 E1. Skills – Case Study: Teachers Health Customer service award winner Source: secondary research KEY POINTS Teachers Health Fund is being named National Contact Centre of the Year (less than 30 full-time employees) at the 2013 Australian Teleservices Association (ATA) awards Building on earlier successes as State Contact Centre of the Year (less than 30 full-time employees) in 2012 and 2013, Teachers Health Fund was awarded the national title at the awards which aim to recognise and celebrate excellence, leadership and innovation Teachers Health Fund CEO Brad Joyce said the recognition by the ATA was the icing on the cake after being awarded Private Insurer of the Month for five successive months from April to August 2013 by Roy Morgan, based on members' high customer satisfaction rating The ATA is a national association which provides comprehensive and independent professional development and accreditation for Australian contact centres. The ATA promotes best practice in contact centre operations and defines and recognises excellence through benchmarks and direction. The ATA National Awards are recognised within the contact centre industry as being the pre-eminent awards program, rewarding achievement at the highest level. “Our contact centre is the face of Teachers Health Fund and the main point of contact for most of our members, so it is great to know that we are providing our members with the best possible, industry-leading service. The Teachers Health Fund contact centre is incredibly dedicated to servicing the needs of our members, and we are extremely proud to have the hard work of our team recognised by this award from such a highly respected organisation for the second year running. Combined with the Roy Morgan awards and recent CHOICE ratings which found that a Teachers Health Fund premium policy offers the same level of cover compared to other funds but at a lower cost, members can be pleased they have made the right choice with Teachers Health Fund. Teachers Health Fund is now the seventh largest health fund in Australia and the largest restricted access fund, available only to members of the education community and their families, including teachers, support and admin staff as well as university and TAFE employees."” Brad Joyce, Teachers Health Fund CEO “The ATA Awards program, now in its 19th year, is the pinnacle of recognition in the Australian Contact Centre industry, honouring the highest achieving individuals and centres that have stood out from amongst their industry peers to demonstrate real passion, leadership and innovation. Every year we are blown away by the continued development and evolution of talent and practice and each year the bar is raised which ultimately contributes to the ongoing success of the entire industry. We are delighted to recognise the achievement of Teachers Health Fund, winning 2013 ATA Contact Centre of the Year in the< 30 full- time employees category. This is a hotly contested category and one where great innovation, leadership, customer focus and flexibility is often demonstrated." Fiona Keoug, ATA CEO,

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 87 E1. Skills – Case Study: Lebara Mobile Customer service award winner Source: secondary research Lebara Mobile knows that when its customers purchase a new SIM card, it is easy to switch to an alternative When switching is so easy, every customer contact is treated as a once-in-a-lifetime opportunity to create a brand advocate Lebara uses customer experience management techniques to create a strong connection with its customers Everything from the way the customer is greeted to the connection that is formed during the call—and the free rein given to staff to help their customers with any problem—has led to Lebara’s award- winning status as one of the best contact centers in Europe SWITCHING IS EASYKEY POINTS The Lebara Group is a telecommunications company providing services in many countries around the world, using the mobile virtual network operator business model Lebara Mobile provides Pay As You Go mobile SIM cards, targeted towards the needs of international communities and migrant workers Won several awards in the customer service space: Best UK Customer Experience in Telecom Sector; and Best UK Customer Experience Team at 2011 UK Customer Experience Awards Best Mobile Virtual Network Operator (MVNO); and Best Customer Service of the Year at 2011 Mobile News Awards

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 88 E1. Training – Moving from sales scripts to better customer conversation drives retention Source: http://planningforum.co.uk/Portals/28/PDFs/2012%20Conference/2012%20Case%20Studies/Scottish%20Widows.pdf SIX STAGES OF AN EFFECTIVE CONVERSATION CASE STUDY – SCOTTISH WIDOWS Scottish Widows was founded in 1815 as Scotland’s first mutual life office, became part of the Lloyds TSB Group in 2000 Increased customer retention value by 300% in 2012 through a major customer service initiative Moved calls from previous heavy focus on sales toward genuinely customer- focused conversations 96% of customers rate Scottish Widows service as “very good” or “excellent” Embedded retention into frontline service Set the scene Probe/Thank Solution Gain commitment/ say goodbye Acknow- ledgement Welcome “I am now much more aware of the call quality and structure rather than my save rates or after-call reporting.” “It was important for us to understand how one product could be three or four times more valuable than another product... we could start prioritising different conversations”

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 89 E2. Recruitment Strategies Using psychometric data mining to identify TOP performers Source: MIND Peak Performance – Talent Blueprint ASX listed company ($140m turnover) with 300 highly skilled advisors using inbound and outbound calling techniques to generate business growth Advisors required significant training (2 weeks) and long lead time to be fully productive. Is there a way to improve recruiting techniques to identify potential hires that would preform like the existing top quartile telesales staff? 600 “talent discovery” papers reviewed by highly qualified psychometric researchers Key personality types, traits and key brain regions identified 400 key questions identified to target top performers 100 inbound and outbound sales consultants tested. The organisation identified: 30 – 35 Top performers 30 – 35 Good potential 30 – 35 Strugglers Top quartile performer algorithm created 10,000 applicants over a 18 month period filled in a basic information sheet then were directed to the test site where they completed a 40 min questionnaire TOP 5% TOP 5-25% ALL OTHERS Brief, significantly shorter interview completed post testing RESULTS Top performer algorithm proven with 95% accuracy over the testing period Recruitment costs reduced by 63% Most job profiling looks for skills / behaviours, but leave it to the assessor to make assumptions about the fit of the candidate to the role Talent Blueprinting © directly assesses individuals to a very specific roles to be performed 90% of how humans perform is subconscious, yet interviews are predominantly a conscious exercise. Talent Blueprints © assess the subconscious fit of an individual to a role In the case study above, an individual, who’s previous role was a bricklayer, and scored a green traffic light in the testing has performed very well since hired. Another candidate with a great resume was rated with a red traffic light, but was hired anyway. The red light candidate subsequently left the team due to underperformance TESTINGCOMPANY PROBLEM METHOD NEUROSCIENCE BACKGROUND

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 90 E4. Future-back capability trajectory Health insurers must invest in developing advanced retail capabilities to effectively respond to rising consumer expectations Source: Deloitte, “Health plans advance retail capabilities: Highlights from Deloitte’s 2013 Health plan retail capability survey,” 2013. RETAIL CAPABILITIES FRAMEWORK FOR HEALTH INSURANCE “Retail Capabilities” are the discrete competencies health plans can employ to better attract, acquire, serve, and retain the individual consumer Product, pricing, and consumer experience capabilities top health plans' priority investment lists Near-term investments focus on regulatory requirements and retention capabilities but widen the aperture to consumer insight, consumer experience, and channel excellence in the longer term Technology investments in transparency, mobility, customer relationship management (CRM) and analytics are fundamental to supporting desired business capabilities SUMMARY OF KEY FINDINGS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 91 E4. Future-back capability trajectory Within Product and Pricing, consumer and market analytics were identified as priority investment areas Source: Deloitte, “Health plans advance retail capabilities: Highlights from Deloitte’s 2013 Health plan retail capability survey,” 2013. More than 90 per cent of health plans are currently invested or planning to invest in consumer understanding and segmentation to design products, making these capabilities part of “the New Normal” by 2017 Less common capabilities in lifestyle based analytics, lifetime value of consumers and custom analytical models to inform product and pricing, are emerging as significant areas of investment. PRODUCT & PRICING INVESTMENTKEY INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 92 E4. Future-back capability trajectory Top Consumer Experience investments include segmentation analytics and the use of technology to enhance consumer touch points Source: Deloitte, “Health plans advance retail capabilities: Highlights from Deloitte’s 2013 Health plan retail capability survey,” 2013. Data analytics was a key theme, with the synthesis of consumer data and operational application of more advanced consumer analytics as priorities In the near-term, identified investments include virtual customer service, such as web chat, leveraging plan interaction data to better understand consumers, and applying consumer experience strategy to transform member engagement In the longer term, health plans will continue to invest in data integration to better understand and serve consumers, including using segmentation and predictive models to anticipate and proactively address consumer needs TOP CONSUMER EXPERIENCE INVESTMENTKEY INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 93 E4. Future-back capability trajectory Insurers plan to invest in Distribution, Enrolment, and Renewal capabilities to leverage deeper consumer understanding for channel design and strengthen retention Source: Deloitte, “Health plans advance retail capabilities: Highlights from Deloitte’s 2013 Health plan retail capability survey,” 2013. 63% of plans indicated that they intended to invest in using a thorough understanding of the consumer’s purchase process and preferences (shopping versus purchase, where they go, who influences them, etc.) to inform channel strategy and design, making this the most frequently cited investment area across the 100 business and technology capabilities included in the survey Other common investments included identifying and designing processes around most valuable consumers and leveraging CRM technologies in a more powerful way to personalize and automate the acquisition and retention experience DISTRIBUTION, ENROLMENT & RENEWAL INVESTMENTKEY INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 94 E4. Future-back capability trajectory Branding and Marketing investments are planned in personalized, analytics-driven marketing, and building a strong digital presence Source: Deloitte, “Health plans advance retail capabilities: Highlights from Deloitte’s 2013 Health plan retail capability survey,” 2013. By 2017, the “New Normal” branding and marketing for retail plans is expected to be analytics driven, highly customized to the individual, and digital BRANDING & MARKETINGKEY INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 95 E4. Future-back capability trajectory Developing preventative health and wealth management capabilities are viewed as longer horizon priorities Source: Deloitte, “Health plans advance retail capabilities: Highlights from Deloitte’s 2013 Health plan retail capability survey,” 2013. Health and wealth management are not considered critical areas for near-term investment, although more than half of all health plans are planning investments in tools that help consumers identify and manage health care costs By 2017, the “New Normal” for plans will likely include sophisticated health system navigation and cost transparency tools Emerging areas of investment are in health management capabilities, such as employing predictive modelling to identify and engage appropriate members and greater integration of clinical functions to improve targeting and intervention HEALTH & WEALTH MANAGEMENTKEY INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 97 F. Enabling Technologies – Foreword Powerful trends are reshaping the industry Source: Digitization and the market expansion services industry: driving omni-channel growth, Roland Berger 2013 THE SPEED OF INNOVATION IS CONSTANTLY INCREASING DISRUPTIVE MEGATRENDS OF THE FUTURE MOBILE COMMERCE IS GAINING GROUND EXPONENTIAL DATA GROWTH IN ALL AREAS LEADS TO INFORMATION OVERLOAD

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 98 F1. Digitalization By 2017, a new breed of customer will dominate: the so-called digital native Source: “Insurance 2020: The digital prize – Taking customer connection to a new level”, PWC 2014

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 99 Source: adapted framework from PWC Smart glasses capture image, video and audio scans coded markers enables multimedia chat updates social networks syncs with other mobile devices Wellness monitor processes exercise data (steps, reps etc.) analyses nutrition/ calories of grocery and restaurant foods analyses perspiration for chemical markers syncs with wearable exercise shoes/clothes syncs with personal health portal Mobile device primary mobile information hub wallet and credential hub application management hub media and communications input hub interface between user and core service portfolio Networked wearable devices records physical activity for upload to wellness monitor records physical activity to a time log analyses physical performance against goals displays progress/regress against goals syncs with opt-in social networks Health monitor captures resting/active pulse, BP, temperature analyses cholesterol, insulin and similar markers syncs with wellness monitor for building health profile communicates with healthcare provider offers suggestions for health improvement DIGITAL PERSONAL CONTEXT 2020 F1. Digitalization Digital is revolutionising the approach consumers have towards their insurance providers

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 100 Source: “Every Insurer Is a Digital Insurer”, Accenture 2014 F1. Digitalization Insurers must ride the next surge of digital disruption A new wave of disruptive digital technologies has broken and insurance carriers cannot ignore the opportunities and threats that this brings Companies from industries as different as telecoms and automotive manufacturing are coming to market with products and services that might subvert traditional approaches to assessing risk, distributing insurance products, and settling claims Carriers must be agile to build more effective alliances and joint ventures with partners from a range of industries, and create new value propositions for their customers KEY INSIGHTS SIX KEY TRENDS THAT WILL SHAPE THE FUTURE OF INSURANCE

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 101 Source: “Leading a Digical transformation in insurance”, Bain 2014 F1. Digitalization Leading a “Digical” transformation in insurance distribution, insurers are looking for strategies to fuse the best of both digital and physical worlds But digital tools and processes do not replace everything physical Insurance customers still benefit from talking with an agent or a claims representative when dealing with complex products or transactions Customers have woven together their digital and physical worlds so tightly and seamlessly that they can’t fathom why companies wouldn’t do the same A strong Digical offering—one that fuses the best of digital and physical worlds—results in greater customer loyalty and advocacy. A customer who uses both digital and physical channels gives her insurance carrier a much higher Net Promoter Score (Bain’s measure of loyalty), on average, than does a customer who uses only digital channels Four questions to anchor a balanced, pragmatic approach towards Digical:  How much of our business do we need to digitize?  What’s the right pace for our Digical transformation program?  Should our digital offerings be separate from or integrated with the core business?  How can we reduce the risks inherent in a transformation? INSURER DIGITAL DIAGNOSTICKEY INSIGHTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 102 Source: “Customer loyalty and the Digical SM transformation in P&C and life insurance: Global edition 2014”, Bain 2014 F1. Digitalization Leading a “Digical” transformation in insurance distribution While customers demand robust digital tools, most do not expect a fully digital carrier

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 103 F1. Digitalization as a global phenomenon Source: Digitization and the market expansion services industry: driving omni-channel growth, Roland Berger 2013 Global smartphone penetration had increased by 1.3 billion devices in only four years to approximately 25% of the global population In the USA, nearly half of all American adults own either a tablet or an e-reader In China, the number of mobile subscribers has reached 1.2 billion, four times more than in the USA and two times more than in the whole of Western Europe In Germany, Facebook has 25 million active users, of whom 19 million use the service daily – equivalent to the audience for the best rated show on German television, but for the whole year Google consumes over two billion kilowatts of energy per annum to run its servers and data centers, roughly a quarter of the output of a nuclear power plant KEY POINTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 104 Source: Deloitte, “Health plans advance retail capabilities: Highlights from Deloitte’s 2013 Health plan retail capability survey,” 2013. Key business capabilities of focus will require significant technology investment to realize The 9 technology capabilities expected to grow fastest over the next three years are related to 1) Transparency, 2) Mobile, 3) CRM, 4) Data and Analytics, and 5) Consumer Engagement Technologies focused on CRM for sales and service, mobility and transparency are possessed by more than 55% of plans today and will become “The New Normal” by 2017 with more than 90% already having or making plans to invest in these technologies Data analytics and consumer engagement technologies, such as bio-monitoring and gaming are less common today, but are some of the most frequently cited areas of investment by 2017 TECHNOLOGY INVESTMENTSKEY INSIGHTS F2. Technology Investments Technology investments in cost transparency, mobility, and CRM will likely become table stakes in the future; however, data analytics and consumer engagement tools are emerging differentiators

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 105 F2. Technology Investments Moving to a Virtual System – A more traditional path is natural evolution towards a more efficient model, but some companies were just created this way “VIRTUAL” BORN NATURAL EVOLUTION The ‘Traditional’ Insurer The ‘Direct’ InsurerThe ‘Virtual’ Insurer In the Past Very Labour Intensive Lengthy Turnaround Times Multiple Handling of Information Quality, Integrity and Access to Information Excessive Processing Costs Uncompetitive Premiums Business was “CONSTRAINED” by Technology More Recently Call Centres On-line, Real-time Systems Point of Sale Data Validation and Capture Data Integrity, Security and Accessibility Reduced Processing Costs Integration of Processes and Information Business was “SUPPORTED” by Technology Now and The Future The Internet - World Wide WEB “Self-Service” Customer Interaction Customer Managed Transactions “End-To-End” Policies, Renewals, Payments and Claims Optimum Processing Efficiencies Business Intelligence – Analytics Business is “SERVICED” by Technology Example of an Insurer player moving from a traditional system to a virtual one Focus on different capabilities changes over time Main characteristics A high portion of the activity is unbundled, i.e. separated into core processes, and distributed both Activities and suppliers are connected using online technology which eliminates substantial costs End customers / intermediaries use e-commerce / the internet frequently when dealing and transacting with the virtual business Information is key to building and maintaining competitive advantage Source: ICG

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 106 F2. Technology Investments – Case Study: CBA Connected customer strategy has seen it going from having the lowest satisfaction of the “Big 4” banks in 2007, to the highest customer satisfaction in 2013 Source: Commonwealth Bank, Adobe Symposium presentation, 2013

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 107 F2. Technology Investments – Case study: California Casualty (1/2) Performance improvement in Distribution through “one version of truth” for an insurer Source: secondary research California Casualty Management Company is a leading provider of auto and home insurance programs Legacy systems were hampering the sales process, causing information loss, redundancy through multiple reporting tools SITUATION CHALLENGESAPPROACH & I.T. SOLUTION California Casualty was operating with a variety of systems for leads management, call centre management, claims management etc.  Stuck in an environment of mainframe, static reporting, information silos  Leading to multiple reporting tools and constant data reconciliation No single reconciled data source was leading to inefficiencies in telesales and resource drain by the sales team  Reliance on IT staff for data extraction, delay in analysing important sales leads  Time consuming interrogation by the sales team of multiple systems on a days to day basis Need to reorganize and streamline reporting systems, eliminate multiple reporting tools and constant data reconciliation and implement one systems solution across all information silos The new data systems was deployed by California Causality to 300 end-users in a staged approach creating a unified Data Model to single source dash –boards. Pilots with 50 users were run before final roll-out commenced. With the new model in place, California Casualty now analyses financial and actuarial data; call enter leads management, telesales and customer service; regulatory compliance and policy management, focused on driving customer value and business performance End-user can mine their own data with little reliance on IT- the new system integrates/analyses more than 400m rows up to 1 terabyte

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 108 F2. Technology Investments – Case study: California Casualty (1/2) Implementation of an integrated system leads to improved sales conversion by 25 % Source: secondary research The real transformation with California Casualty was the ability to create a Unified Enterprise Data Model / Repository to a single- source, covering all dashboards, analysis and reporting needs across all departments The new systems significantly reduces the compliance burden for California Casualty as the time to update compliance applications has gone down by 60% The new integrated system led to smarter telesales  The new system delivered the complex integration of data from the company’s Verint call recording system and an organically grown leads management systems  The new solution provides now the ability to associate data and generate interactive applications for optimizing lead generation, follow up and tracking outbound sales results – leading ultimately to improved lead conversion by 25 % End-users can now mine their own data – empowering end-users and saving time of IT resources  The new solution offers possibilities to improving business processes, product and services to customers  The new solution shortens design and development cycles for new applications BENEFITS Improved lead conversion rates by 25 %, leading to an additional 200 sales per month Increased average telesales by agent from 1.6 to 2.0 sales per day Reduction in time and IT resources for regulatory reporting on compliance by 60%, freeing more time fir IT development RESULTS / SUMMARY KPI'S

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 109 Source: “Commercial Insurance Risk Analytics”, Capgemini 2014 F3. Big Data Powerful risk analytics empower insurers to better assess risks and make more informed decisions Commercial insurers recognize Big Data’s potential to provide competitive advantage. They know that access to more data could refine risk assessment, provide more accurate pricing, enhance claims processing, and more. In a recent survey of underwriters, 76% of respondents thought Big Data pricing models could transform household insurance pricing accuracy and 88% thought motor insurance pricing could be transformed. Nearly 70% said real-time, location- based data could revolutionize the understanding of cumulative risk exposure in motor A wealth of detailed, accurate data exists inside and outside the organization that could inform the risk assessment with much more granular and current information than is typically used today. Up-to-date information can be used to assess the likelihood of losses from relevant perils at the property location, the existence of high- risk items nearby, the density of existing policies near the property, and other risk items. Such detailed and timely data can help insurers more accurately price policies by supporting a better-informed assessment of the policy submission or renewal before a policy is accepted KEY INSIGHTSTOP 5 UNDERWRITING CHALLENGES

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 110 Source: “Transforming Insurance”, KPMG 2014 F3. Big Data Commercializing the value of data analytics requires insurers to develop an end-to-end configuration and integration of their data systems and capabilities

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 111 Source: “Transforming Insurance”, KPMG 2014 F3. Big Data Challenges for insurers

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 112 F4. Social How social media and mobile technology impact the customer experience – (1/4) Source: Avaya and BT, The Autonomous Customer: Understanding the challenges of dealing with informed, demanding and networked customers, January 201

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 116 F4. Social Behavioural Economics – ‘Gamification’ is rapidly emerging as important mechanism to improve customer engagement in health insurance Source: http://www.businessinsider.com.au/gamification-in-healthcare-2013-1; http://iireporter.com/gamification-in-insurance-customer-engagement-and-beyond/; http://www.celent.com/reports/game-revolution-gamification-insurance-industry “Gamification” is an emerging field in the insurance industry. Gamification is the use of game elements and design techniques for non-game problems. The power of gamification is that, through the use of game elements, activities that might normally be uninteresting and even tedious become fun thereby increasing motivation The “gamification of health care” is a fast-growing trend with a proliferating number of smartphone-enabled apps in game-like formats designed to engage consumers in actively managing and monitoring their personal health. Players of these games can win rewards, including financial incentives for achieving their health goals Health insurance providers were among the first to experiment with gamification and it is proving an effective capability for insurers to engage their customers more frequently, as well as improve health outcomes. More recently, health care gamification has attracted several technology start-ups, many of them focused on fitness Most recently, health-related games have taken on more of a social feel, with features that allow users to challenge other users to fitness or weight-loss contests, for example, and to announce their results on Facebook and Twitter DESCRIPTION Cigna was an early adopter of gamification for behaviour modification, with the Re-Mission app, launched in 2007. Re- mission was designed to be a fun and challenging video game to motivate young cancer patients to stick to their treatments. Re- Mission has improved treatment adherence by boosting self- efficacy, fostering positive emotions and shifting attitudes about chemotherapy Cigna’s gamification of its health risk assessment for plan applicants has dramatically improved completion rates from 20% for conventional health risk assessment to 90% for the gamified version UnitedHealth Group is actively experimenting with several gamification models OptumizeMe is an app that allows people to participate in fitness-related contests with their friends Join For Me is a program that encourages adolescents who are obese and at risk of developing diabetes to play video games that require dancing or other physical activities. Baby Blocks uses financial incentives to keep its members engaged over the long run. The game is offered to 50,000 pregnant members in seven states and is designed to encourage women on Medicaid to attend all their prenatal check-ups. The women can unlock “blocks” in the game by going to those appointments. After they attend key check-ups, they can receive rewards, such as gift cards for maternity and baby clothing. In 2012, 2,296 members actively used Baby Blocks pilot, logging 7,098 prenatal appointments and unlocking an average of 3.1 prenatal blocks per member “We’re primarily based on a belief system that games and game mechanics are really going to be the motivating factor for chronic conditions that people struggle with on a daily basis.” Bonnie Henry, CEO GameMetrix Solutions GAMIFICATION INNOVATIONS BY HEALTH INSURERS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 117 F5. Sales Enablement / Marketing Automation Getting the balance right with supporting technology for marketing and sales Source: 2014 B2B Sales and Marketing Collaboration Report Peter Strohkorb Consulting online survey and interviews with 185 B2B Australian enterprises IT Systems in successful vs less successful organizations’ marketing and sales teams The “2014 Survey of 185 Australian B2B enterprises” found that organisations differed in the implementation of IT systems, ranging from CRM* or SFA** systems only, to a combination of three or four different IT systems that support sales and marketing activities: 88% of surveyed businesses which implemented a combined CRM and Sales Enablement (SE) solution managed to increase their sales revenue over the prior 12 months 62% of companies with a CRM as their only sales supporting IT system reported a decrease in sales revenue Companies that implemented CRM and sales force automation, plus marketing automation systems fared worst in sales performance Most efficient technology was a combination of CRM and Sales Enablement Systems, followed by the combination of CRM and Lead Management/ Marketing Automation Systems due to:  too much implementation of technology may distract teams from selling  the organisations may be going through the change learning curve on constantly changing technology  different platforms fail to deliver and all-in-one marketing technology solution Tech advantage gives organizations revenue growth but multiple systems hinder sales performance as did CRM alone 88% of businesses using CRM Plus SE software reported an increase in revenue Legend: CRM*-Customer Relationship Management SE- Sales Enablement SFA**-Sales Force Automation MA- Marketing Automation

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 118 F5. Sales Enablement / Marketing Automation Comparison of sales enablement solutions Source: http://www.seismic.com/vendor-landscape/ SALES ENABLEMENT SOLUTIONS NEED TO SOLVE SIX COMMON PROBLEMS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 119 F5. Sales Enablement / Marketing Automation An analysis of the top five providers of live chat support software (1/2) Source: http://live-chat-support-software-review.toptenreviews.com/livehelpnow-review.html HOSTING: All offerings provide: email forwarding of messages when agents aren’t available; customisable chat windows; remote administration; the ability for customer to access through mobile devices and customizable data into their programs All offerings provide: document sharing; operator to operator chat (that a customer can’t see); pre / post chat surveys; the ability to create and track campaigns PROGRAM FUNCTIONS: DIFFERENTIATING FUNCTIONS: AS PER “2015 TOP TEN REVIEWS REPORT’ (60 MILLION VIEWS A YEAR)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 120 F5. Sales Enablement / Marketing Automation An analysis of the top five providers of live chat support software (2/2) Source: http://live-chat-support-software-review.toptenreviews.com/livehelpnow-review.html AS PER “2015 TOP TEN REVIEWS REPORT’ (60 MILLION VIEWS A YEAR) TRACKING & MONITORING: All offerings provide: ability to proactively reach a customer to chat; track where and how long a visitor spends on your site; track how a customer found your site; track detailed history notes of the customers interactions; identify where your customer is located; see your customers Facebook and twitter profiles All offerings integrate to Google Analytics and Sales Force Note: there is quite a mix of what each application can integrate with so further analysis required as to integrations required INTEGRATIONS: HELP & SUPPORT: All offerings provide help and support through: live chat email submissions PRICING: Phone Tutorials Accessing a knowledgebase FAQ’s (except Kayako)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 121 F5. Sales Enablement / Marketing Automation Popular marketing automation software Source: Capterra 2014 survey A comprehensive automated all-in-one sales marketing tool aimed at the small business market. 24,000 customers / 73,000 users. Strong presence on twitter / Facebook HubSpot inbound marketing software helps businesses get found online, and converts website traffic into leads & customers. HubSpot provides easy tools for search engine optimization (SEO); writing blogs & creating web content (CMS); leveraging social media that help a company get found online. 11,000 customers. 55,000 users

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 122 F5. Sales Enablement / Marketing Automation Case study: Hubspot – provides software product for inbound marketing Source: secondary research Develops and markets a software product for inbound marketing The software has features for social media marketing, email marketing, content management, web analytics and search engine optimization among others The HubSpot suite of online tools has three primary applications: Content management tools for creating or managing blogs, templates, forms and landing pages Exposure optimization applications that help the content be found, such as through search engine optimization Lead tracking and intelligence tools, which track and manage e-mail marketing, customer interactions, qualified prospects, reports and analysis HubSpot has integration features for Salesforce.com, SugarCRM, NetSuite, Microsoft Dynamics CRM and others KEY INSIGHTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 123 F5. Sales Enablement / Marketing Automation Case study: SalesForce, global cloud computing company Source: secondary research Though best known for its cloud based customer relationship management (CRM) solution, Salesforce has also expanded into commercial applications of social networking through acquisitions Salesforce's CRM service is broken down into several broad categories: Sales Cloud Service Cloud Data Cloud (including Jigsaw) Collaboration Cloud (including Chatter) Analytics Cloud Custom Cloud (including Force.com) Has over 100,000 customers KEY INSIGHTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 124 F5. Sales Enablement / Marketing Automation Case Study: Shoretel – An all-in-one marketing system platform for speed of response delivers increased conversion Source: www.hubspot.com A leading provider of IP phone systems and unified communications solutions, ShoreTel’s award-winning on-premises IP-PBX solution and cloud-based hosted phone system, ShoreTel Sky, eliminate complexity and improve productivity. A US $300 million publically listed company with 900 employees worldwide. ShoreTel’s Senior Manager of Search & Analytics, Michael Freeman, was frustrated by how the limitations of the marketing tools used by the team impeded their ability to execute their ideal strategies. The main system they used to support shoretel.com and shoretelsky.com was Eloqua, which they found to be inflexible, slow and not user friendly. “You either had an extremely limited set of tools to work with or you had to go hire a custom developer to implement a basic landing page... It became something I dreaded logging into,” says Freeman. The whole team believed in inbound marketing, but didn’t have the right toolset to implement it. He required a system that would grow with the business; this eliminated many vendors when combined with his desire for software that is easy-to-use. CHALLENGES APPROACH & I.T. SOLUTION An all-in-one platform combining both marketing automation and inbound marketing delivering sophistication, scale and functionality. BENEFITS 60% increase in organic search traffic, 36% increase in leads 110% increase in qualified leads. Having an all-in-one marketing platform helps ShoreTel to execute marketing campaigns more quickly. "Part of being successful at inbound marketing is to be fast and agile and have analytics… too many systems just create hurdles for you. Having one integrated system helps me create campaigns faster so we can address the needs of our market faster.“ “The fewer tools that I have to use, the better off I am. It's easier to get people trained. I'm less likely to have to jerry rig things together to make them happen.”

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 126 Source: 20/20 exchange; Inspiring Extraordinary Leaders G1. Benchmarks Industry Survey: 2014 Revenue Performance Index (1/3) Annual survey run annually since 2005 across 172 companies with $0.5 - $15bn revenue to test the claim that the act of selling was getting more difficult. No lack of clarity from CEO that revenue must grow consistently, sustainably and profitably. (fig. 1) Ability to convert the sales pipeline continues to decline with only a 2.1% conversion in 13/14, (~10% lower that the prior year and almost half the level from 7 years ago). (fig. 2) While there has generally been an increase in sales lead progressing to calls / appointments, the ability to convert those interactions to offers and to convert those offers to sales has dropped significantly since 11/12. (fig. 3) KEY INSIGHTS COLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 127 Source: 20/20 exchange; Inspiring Extraordinary Leaders 61% of organisations reported their sales cycle is longer / much longer than the prior year. (fig. 5) Only 32% of organisations would hit or exceed revenue targets with only 5% exceeding 120% of target. (fig. 6) However, for 2015, only ~1/3rd of organisations were happy with 0–10% growth with the rest wanting more than this. Almost a quarter of respondents wanted >26% growth in revenue in 2015. (fig. 7) Not surprisingly, 2/3rds of the respondents know they won’t or are not confident they will make their 2015 targets. (fig. 8) KEY INSIGHTS COLLATERAL G1. Benchmarks Industry Survey: 2014 Revenue Performance Index (2/3)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 128 Source: 20/20 exchange; Inspiring Extraordinary Leaders Even though CEO have low confidence in their sales targets the Australian sales training and CRM markets grew by 9.2% and 8.7% respectively in FY14 and Gartner predicts they will continue to do so at near double digits through 2016/17. (fig. 9) CEO’s were uncertain as to how to approach the development / management of their brands to directly generate revenue (fig. 10 / 11) To be effective and persuasive, brand needs 3 elements – differentiated from competitors, relevant to the market, based on truth about the org. Most CEO were satisfied they had at least 2 of these elements but few could produce evidence to support their “gut feel”. Less than 1 in 5 CEO’s had asked their customer for their reactions to their brands and none had any plans to do so. Around half of the CEO had low confidence in marketing’s contribution to rev. (fig. 12) And while there as a broad mix of where the budget was spent (fig 13) <25% of marketing teams were held accountable for ultimate revenue conversion KEY INSIGHTSCOLLATERAL CRM Sales training G1. Benchmarks Industry Survey: 2014 Revenue Performance Index (3/3)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 129 G1: Benchmarks – Case Study: NIB retention In line with industry averages Source: NIB investors strategy day, 2014

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 130 G2. Customer Lifetime Value A cycle that doesn’t just rely on customer satisfaction; as customers become advocates, their advocacy can bring in new customers at a lower cost—which restarts the cycle Source: What is customer lifetime value, Avaya Research 2013 CUSTOMER LIFETIME VALUE & THE CUSTOMER JOURNEY HOW TO CALCULATE CUSTOMER LIFETIME VALUE Customer lifetime value (CLV) is both a concept and a measure that can measured with a formula CLV is about optimizing each interaction and conversation in order to create an engaged customer relationship which drives customer retention, repeat purchases, customer referrals, reduced support costs, and possibly even price premiums. The key levers of customer lifetime value are efficiency, growth, and revenue, which align with the different perspectives of customers and businesses Improving efficiency requires a focus on internal processes, systems, and resources and is influenced through customer acquisition and support costs Improving growth and revenue, on the other hand, requires a focus on customers and is influenced through customer retention, loyalty, and advocacy

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 133 Source: http://www.pruhealth.co.uk/personal/vitality/how-vitality-works; “The Vitality Wellness Programme: Experience from South Africa,” C3, 2012.http://www.pruhealth.co.uk/personal/vitality/how-vitality-works Life Insurance & Wellness Discovery, Prudential Health & Vitality Vitality is a health and wellness program implemented by Discovery (health insurance and financial products) in South Africa. Many of the features of the program are common between the South African (Discovery) and the UK (Prudential Health & PruProtect) implementations A customer joining Vitality completes a health review; determines their Vitality Age and sets health goals; obtains a personal program to better health leveraging disease management, quit smoking, mental health, nutrition, preventive care, and physical activity parameters; earns Vitality points to achieve a status, bronze, silver, gold; and is rewarded with incentives such as movie tickets, discounts on family travel, etc. For some products, the Vitality status also impacts insurance premiums Data from the program shows that: Vitality engagement is correlated with lower healthcare costs Vitality engagement reduces the cost of managing chronic disease Fitter people spend less time in hospital and incur lower healthcare costs The percentage of members engaged in fitness activities increased over time Members increased the amount of healthy food purchased from before joining Vitality to after KEY POINTS INNOVATIONS Vitality incorporates multiple trends in health & behaviour Gamification. Vitality is about earning points for healthy things a customer does, in order to reach a Vitality status level, turning health into a game with multiple opportunities to impact it Healthy lifestyle affects premium paid. Platinum status offers a 1% yearly discount on life insurance products. The largest contribution to status comes from staying active Incorporates use of sensors/wearable devices. Allows members to track their activity and earn Vitality points with Fitbug, Polar, adidas miCoach, Nike+, Garmin and the majority of Fitbit, Suunto and Timex devices Discounts from relevant partners. Discounts with gym memberships, active gear, bicycle purchases, wearable devices, Weight Watchers. Offers loyalty rewards as an incentive. Loyalty rewards are offered both through points earned with Nectar (see below) and other partners in related industries such as spas, travel, entertainment. The higher status earned, the larger the rewards Part of a larger loyalty program enabling consumer behaviour tracking across industries. As a member of the Nectar loyalty program, VitalityHealth has access to expenditure data from over 50% of UK households across industries and companies including Credit Cards, Utilities, Retail (eBay, Debenhams, Sainsburys, Viking-Direct office supplies), Financial Services (confused.com, Prudential Health, Sainsbury’s Bank), Travel (expedia, hertz)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 134 Source: secondary research Health Insurance: Oscar Health insurer that leverages the Affordable Care Act offering unlimited access to Telemedicine OSCAR DEMOGRAPHIC KEY POINTS Health insurer deliberately catering toward digital natives offering different plans according to income ranges and family size Debuted as the U.S. government unveiled new health insurance exchanges where consumers can pick and choose plans; it is a participant of the Obamacare Exchange Offers a web- and mobile-friendly aesthetic designed to make the insurance experience smoother for plan members Users are able to consult with doctors for problems like the flu over a video chat through tele-doctors at any time of the day The site offers a good search functionality for specialists Collects metrics on medical professionals for performance reviews and uses them for customer recommendations as well Using Oscar's web front end, consumers can see whether individual doctors predominantly treat patients in their twenties or thirties, what language the doctors speak, and other metrics Provides some other unique benefits: access to free generic drugs and a complete medical history—doctor's visits, X-ray results, prescriptions— that members can look up online Benefit packages are designed to be similar to cellphone plans. For instance, every family member enrolled in a silver plan is entitled to three physician visits a year without incurring additional cost Oscar can be purchased on New York’s health insurance exchange, New York State of Health, the organized marketplace for New Yorkers to shop, compare and enrol in health insurance coverage Raised $40 million from Thrive Capital, Founders Fund, General Catalyst and Khosla Ventures

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 135 Source: secondary research Health Insurance: Health.com.au KEY POINTSCOLLATERAL Launched in June 2011, after raising $3.6 million Hired a team of health insurance experts from some of Australia’s biggest insurance companies First new entrant into the private health insurance market since 1977 and the first pure-play online health fund in Australia Founded by ex-realestate.com.au executive Andy Sheats, and backed by former NSW Liberal leader John Brogden Rapid growth, now claiming to cover 90,000 Australians Strong relationship with key distributor iSelect, where iSelect receive a fee for each completed sale Very active in Social Media Strong Board and Management Team (several senior ex Promina staff)

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 136 Source: secondary research Health Insurance: Kaiser Permanente A closed-loop, integrated delivery and finance model powered by health informatics KEY POINTSCOLLATERALS Kaiser Permanente is a health care provider that combines both a health insurance plan and care delivery in a single organization based in Oakland, California Made up of three distinct groups of entities: - Kaiser Foundation Health Plan and its regional operating subsidiaries - Kaiser Foundation Hospitals - autonomous regional Permanente Medical Groups Serves more than 9 million members and employs more than 17,000 physicians, 180,000 employees, 37 medical centers, and 611 medical offices $60B revenue (2013) Without a separate insurance company intermediary, Kaiser saves money, which it then uses to offer lower health insurance rates In the last decade, Kaiser has developed state-of-the-art health informatics along with a Patient-Centred Medical Home (PCMH) model. Nine million patients can now access their own electronic records using mobile devices, a first step toward consumer engagement and personalized In 2011, Kaiser led the nation among Medicare health plans with a number-one ranking in 9 out of 37 measures of effectiveness of care. Kaiser has cut in half the number of broken bones in seniors, by targeting those most at risk, and prescribing a course of action with follow-up by a coordinated team. It has cut the death rate from HIV to half the national average, by treating HIV as a chronic condition with a 12-item checklist. In Colorado, it is credited with reducing deaths from coronary disease by 73%, using an innovative program that uses electronic health records and a clinical care registry to link coronary patients to teams of pharmacists, nurses, primary care doctors, and cardiologists One recent initiative is the Care Connectivity Consortium (CCC), just launched by Kaiser, Geisinger, Mayo Clinic, Intermountain, and Group Health Cooperative. The effort aims to connect the electronic-records databases of these industry leaders—much as Visa did with banks in the 1950s—to improve data flow between provider groups

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 137 Source: Oliver Wyman, “Convergence: Opportunities for Innovation in the New Health Economy,” 2014. Health Insurance: CareMore Rebuilding healthcare for frail elderly patients CareMore is relatively small health care provider (54,000 members), but it is a market leader in patient-centered medicine, based in the US CareMore exclusively serves a Medicare Advantage population, focusing its resources on the 15% of its patient panel that generates 60% of its healthcare costs. These are the frail elderly who are at risk of falling and breaking a bone or diabetic patients facing a potential amputation At the heart of the CareMore model is a clinical care center where patients can come (or are brought) for health or nutrition education, a fall-prevention clinic, and toenail clipping or wound-care management. While a physician leader coordinates patient care, the care team includes social workers, nurse practitioners, fitness trainers, nutritionists, pharmacists, and care coaches Medicare Advantage and risk-adjusted global payments help to make CareMore’s patient-first business design really work. By receiving an age- and health-adjusted payment for its full patient panel, CareMore allocates resources to provide the most overall value Patients engage in iPhone conference calls with healthcare professionals and are remotely monitored with devices that feed data automatically to doctor. They also have singing pillboxes that chime when it is time to take medications CareMore’s performance is market-leading: hospitalization rate 24% below average, hospital stays 38% shorter than average, amputation rate among diabetics 60% below average, and overall member costs are roughly 18% below the Medicare average; CareMore earns top five-per cent scores in clinical quality and patient satisfaction every year MARKET-LEADING PATIENT-CENTERED CARECOLLATERALS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 138 Case Study: iSelect iSelect operates an E2E comparison model across the majority of its business Source: Investor presentation, Feb 2014, I Select COMPLETED ISELECT E2E SALE

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 139 Source: Investor presentation, Feb 2014, I Select Case Study: iSelect Quite effective in client conversion; third main health insurance provider after Medibank and Bupa ISELECT CONVERSION RATIO – HEALTH INSURANCE Accounts for 20% of the new PHI policy sales in Australia To enter the comparators game, Medibank offers AHN on the iSelect website - in this way retained its first position as Health Insurer provider in Australia KEY POINTS

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 140 Case study: Connected Health Simplifying health insurance Source: Oliver Wyman, “Convergence: Opportunities for Innovation in the New Health Economy,” 2014. US based ConnectedHealth provides a benefits shopping platform that offers consumers an integrated marketplace for health and financial protection Extremely easy to use digital customer interface Developed using proprietary choice architecture, has award-winning decision-making tools Key focus on: Personalized Recommendations Consumer Guidance and Support Data and Analytics Partnership with the Federal Government PROMOTING CONSUMERISM IN HEALTHCARE COLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 141 Source: secondary research Case study: Telstra Health Connected health care for everyone COLLATERALSKEY POINTS Offering four main products: Provider Applications Tele-health Connected Healthcare Intelligence Connecting patients, healthcare workers, hospitals, pharmacies and health funds to build a safer, more convenient way to manage health – with patients at the centre. The Vision : to re-imagine the future and help create a truly connected healthcare system. You’ll connect to your doctor, your doctor can connect with other providers and will be able to access your medical information where you want, when you want. We’ve assembled an expert team and are committed to working with healthcare providers, funders and government to make our health system experience the power of connection

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 142 Source: www.tokiomarine.com; http://www.martinlee.sg/launch-of-tm-earlycare-earlycare-rider/www.tokiomarine.com Case study: Tokio Marine Offers TM Early Care, combining dread disease, life insurance, and a wellness benefit Launched in Singapore in January 2013 by Tokio Marine Life Insurance, a division of Tokio Marine Asia and Tokio Marine Insurance Group Provides lump sum payout on either death or the diagnosis of any of 30 covered dread diseases (e.g., Alzheimer’s, Major Cancers, Multiple Sclerosis, Stroke) Unlike many critical illness covers offered, the emphasis of this cover is on providing treatment early, when the condition is less severe Offers a wellness benefit of S$100 every two years provisional to maintaining an exercise regime or a regular health check-up Incorporates 5 special conditions, including breast reconstructive surgery following a mastectomy Offered as a rider to existing life insurance plans or as a stand-alone plan Targeted to customers aged 25-45; reflected on the website: a clean design, easy-to-navigate information and links to social media and email KEY POINTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 143 Case study: MLC Best Doctors Free service provided to MLC insurance holders COLLATERALKEY POINTS Free service Independent and confidential advice for any condition, injury or illness that affects your way of life Covers critical conditions such as heart attack, cancer and stroke, as well as non-critical conditions such as allergies, severe migraines and back pain Access to the following range of medical advice services. In-depth Medical Review™ A leading international expert will conduct a full review of your diagnosis and treatment plan. The Best Doctors team will collect and analyse all your relevant medical records, retesting pathology if required. Within weeks, you’ll receive a comprehensive report from a world- leading expert, which you can discuss with your treating doctor. Ask The Expert If you’re seeking fast answers to key questions about your condition, Ask The Expert is for you. Within a few days all your questions will be answered in detail by a world-leading expert, giving you greater clarity about your condition and how to tackle it. Doctor Online Submit your basic medical questions to Best Doctors’ carefully selected panel of Australian GPs and receive a response within 48 hours. Source: secondary research

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 144 Source: secondary research Case study: Welltok COLLATERALSKEY POINTS Welltok is a consumer health engagement platform Lets risk-bearing population health managers offer their members customized wellness and condition management programs, including various incentives for positive wellness behaviour Provides ways for health plans and providers to offer condition management programs and incentives to people dealing with (potentially costly) health conditions like diabetes Integrates with popular fitness wearables, like those from FitBit, and with fitness apps like Fatsecret Insurers or providers can use the platform to reward members for walking a certain number of steps each month, as measured by the FitBit device Based in Denver, raised $25M to date

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 145 Case study: Hootsuite Social media management platform, allows SME access to marketing management tools at a fraction of the cost Source: secondary research Social media management system for brand management The system’s user interface takes the form of a dashboard, and supports social network integrations for Twitter, Facebook, LinkedIn, Google+, Foursquare, MySpace, WordPress, TrendSpottr and Mixi Based in Vancouver, British Columbia, Canada, Hootsuite has over 500 staff located in Vancouver, San Francisco, New York, Hong Kong, London, Sydney, Singapore, and other countries The company operates on a freemium model and has over 10 million users in more than 175 countries The service is commonly used to manage online brands and to submit messages to a variety of social media services, including Twitter, Facebook, Google+ and Mixi Companies and organizations known to use Hootsuite include Facebook, the Obama administration, HBO KEY INSIGHTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 146 Case study: Zendesk Provides a cloud-based customer service platform, removing the fixed costs to provide high quality customer service Source: secondary research Founded in Denmark in 2007 Employs roughly 500 people and serves more than 40,000 customers in 140 countries Zendesk's software is written in Ruby on Rails, and is notable for its ability to integrate with dozens of content management systems, customer relationship management tools, and web apps Released an IOS app in 2013 In August 2013, Zendesk released Help Center, an addition to the Zendesk customer service platform that allows customers to access self-service options including a knowledge base and community forum, searchable through a central customer portal KEY INSIGHTS COLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 147 Case study: Klout Uses social media analytics to rank its users according to online social influence Source: secondary research Klout is a website and mobile app that uses social media analytics to rank its users according to online social influence via the "Klout Score", which is a numerical value between 1 and 100 In determining the user score, Klout measures the size of a user's social media network and correlates the content created to measure how other users interact with that content Klout uses Twitter, Facebook, Google+, LinkedIn, Foursquare, Wikipedia, and Instagram data to create Klout user profiles that are assigned a unique "Klout Score Higher scores corresponding to a higher ranking of the breadth and strength of one's online social influence The primary business model for Klout involves companies paying Klout for Perks campaigns, in which a company offers free services or products to Klout users who match a pre-defined set of criteria including their scores, topics, and geographic locations Begin displaying business analytics aimed at helping business and brand users learn about their online audiences KEY INSIGHTSCOLLATERAL

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 148 Source: secondary research Case study: iTriage COLLATERALKEY POINTS Global health care technology company founded in 2008 by two emergency medicine physicians that empowers people to live with health at hand The healthcare app lets quickly and easily take action every day—it helps finding medical answers in real-life language, locate care options, connect with doctors, and maintain own health information—all in one safe place Target 4 key stakeholders: Consumers: find medical answers, locate care options, connect with doctors and securely maintain your health information Providers: Increase patient engagement and empower decision making by actively connecting with patients searching for care Health Plan: Improve the delivery system by supporting and guiding patients toward the most appropriate, cost-effective in-network care Employers: Increase employee engagement and empower better decisions by guiding to appropriate in-network and lower cost care options

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 149 Source: secondary research Case study: Healthgrades Provides information about physicians, hospitals, and health care providers COLLATERALKEY POINTS Founded in 1998, based in Colorado amassed information on over 3 million U.S. health care providers In 2014 launched the first comprehensive physician rating and comparison database in the United States The database allows users to search for physicians based on their experience in a particular area or procedure Evaluates hospitals solely on risk adjusted mortality and in-hospital complications Its website evaluates roughly 500 million claims from federal and private reviews and data to rate and rank doctors based on complication rates at the hospitals where they practice, experience, and patient satisfaction Its analysis is based on approximately 40 million Medicare discharges for the most recent three-year time period available Data is analysed using a proprietary methodology

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 150 Additional ‘Mini’ Case studies CompanyCapabilityDescription Citibank Online inter- corporate lending module Citigroup is expanding TreasuryVision, its treasury management portal, to enable corporates to track performance and compliance for lending between parts of the same business, either domestically or internationally. For firms with international units, differing tax laws can make managing intercompany lending difficult, creating a sweet spot for Citi's new product. Wells Fargo Engaging customers on social media through content generation and interactivity Wells Fargo currently operates seven blogs, three YouTube channels, a number of Facebook pages, Twitter accounts, a financial literacy program and a virtual world, called Stagecoach island. The bank’s twitter account, @Ask_WellsFargo, was named as a specific call to action to encourage people to interact with the bank on a personal level. Wells Fargo is committed to providing practical and comprehensive financial education to help guide individuals, families and businesses on the path to financial success via blogs, Twitter and other social media programs. Stagecoach island is an online game where users earn, save and spend virtual money - players earn virtual money by answering questions about banking and personal finance, and they can earn virtual interest on their balances by saving their virtual dollars overnight Barclays Credit card designed and built using community crowdsourcing Dubbed the Barclaycard Ring, the MasterCard-affiliated product is Barclays’ first foray into the U.S. card market. Barclays collected information about which features the card should have via Twitter, Facebook and Google+, in addition to through its own dedicated website. The bank will be engaged with this online community of card members well beyond the initial stages of product design - Cardholders of the Barclaycard Ring, he says, will be akin to shareholders, and they will be able to weigh in on future matters relating to the card. Source: secondary research

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 151 Additional ‘Mini’ Case studies CompanyCapabilityDescription American Express Call Centre Agent Strategies Jim Bush, who leads American Express service operations globally removed call center scripts, traditional behaviour-based quality monitoring metrics, and limits on average handling time. Instead of focusing on traditional productivity measures largely aimed at controlling call center costs, he made it a key success measure to earn the enthusiastic recommendations of card members. The American Express team's framework substitutes guidelines for hard limits, judgment for scripts, and coaching for monitoring. Why does this work? Because employees are deeply involved in figuring out how to meet fundamental business objectives. Bush and his team don't dictate how employees achieve those outcomes, but do make sure they receive plenty of feedback on how well they are doing. Service expenses actually went down under the new system as employees devised and shared solutions to common customer issues. Better yet, among customers who are promoters, American Express sees a 10-15% increase in spending and far better retention rates Vodafone Engaging customers on social media through content generation and interactivity Project Victoria is an internal project in Vodafone to become less worried about numbers and to "treat every lost customer as a lost lover”. Taking away the raw numbers and trying to think of customer churn as a "broken relationship”. According to Vodafone's chief marketing officer Kim Clarke, it's seen a number of big changes in how the telco deals with customers through their local call centre based in Hobart. "Honesty and trust," said Morrow. "When we make mistakes — and those things will happen — we want to call it, acknowledge it, rectify it and move on."

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 152 Additional ‘Mini’ Case studies CompanyCapabilityDescription First National Bank ASB Bank Linking mobile banking platforms with social networks First National Bank of South Africa has tied its mobile banking application to Facebook, enabling users to run the application from within the social media site. New Zealand's ASB Bank launched an upgrade to its mobile payments app that enables users to send money to friends through Facebook. Dell Interpreting social media traffic Dell and Comcast, both leaders in social marketing and support, have already integrated Twitter data to allow brand managers and support teams to actively track what’ s being said in tweets. Marketers will have the ability to understand the mood, find new sales leads, respond faster to customer needs and maybe even anticipate needs by listening into their conversations and taking action

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 153 Additional ‘Mini’ Case studies CompanyCapabilityDescription Metro Bank Deutsche Bank Jyske Bank Branches to become retail stores for financial products Metro Bank in the UK unquestionably has a very high quality ‘store’ experience (they don’t call their retail points of presence branches), as evidenced by their Net Promoter Score which is higher than any other retail bank in the UK. Deutsche Bank with their Q110 branch in Berlin and Jyske Bank in Denmark, have taken the retail concept to its ultimate with advisors strolling the store and products bundled in packaging you take off the shelf. Burberry Retail stores augment brand and drive E- commerce At the beginning of each season, Burberry turn their store as entertainment destination, engaging with customers through an audio-visual experience featuring big screens and iPads. Loyal customers are invited to the store for an exclusive opportunity to buy new season range and customers view the new collection through catwalks showcased on big screens in tore and are able to order via iPads. Bankinter Virtual channels to interact with bank BankInter allow their business customers to use virtual channels to interact with them via online video conferencing, helping SMEs save valuable time by providing anytime / anywhere access. They launched their ‘Mobile Virtual Network’ in partnership with Dutch telecoms operator KPN, using the Orange network to reduce customer’s cost of data transfer. A Cisco case study claims this model delivered positive results with over 1,000 video calls per day and improved closure rates (up to 25%) Tesco Virtual Store In South Korea Tesco has created a virtual store in the subway where commuters can order their groceries from a virtual wall. This innovation and convenience has contributed to making Tesco the number one grocery brand online in South Korea Amtrak Self service An example of an excellent self service environment is the Amtrak speech-enabled IVR for schedule information and fares, which is referred to as Julie, as that is how the automated voice addresses herself. Julie keeps the call moving, asks the right questions and make sure the caller doesn’t worry about getting locked into a trip accidentally. Julie says that no fares will be booked until the end of the call, and allows callers to research schedules without having an exact date – avoiding a common reason for drop-off in many similar IVRs

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 154 Additional ‘Mini’ Case studies CompanyCapabilityDescription Best Buy Target Sears Cross channel integration For multichannel retailers, the ability to offer satisfying cross-channel experiences is essential to future growth. Cross View recently named Target, Best Buy and Sears the top three fittest cross- channel businesses in a recent analysis of the top 25 multichannel retailers. The retailers attracted strong scores for cross-channel best practices such as offering same-day pickup of web orders in bricks and mortar stores and for making pending web data accessible to customer services representatives at call centers Starbucks Omni-channel integration: Seamless customer dialogue Starbucks uses over 11 online channels to engage and collaborate with customers and uses location based services to offer rewards to customers. Starbucks has launched a mobile loyalty and commerce platform to further monetize mobility and has monetized social media by creating a journey for its customers. Starbucks launched e-gift cards, which integrated with Facebook, and m- gift cards via mobile app. In 2011, customers loaded up $2.4 billion in credits on prepaid loyalty cards and processed more than 26 million mobile payments Simple Creating a better interface for banking through the Web and mobile Apps Simple (formerly BankSimple) aims to help consumers manage cash in the easiest, most straight- forward way possible. In partnership with financial institutions which will hold the actual deposits, Simple is focusing on simplifying the banking process by unifying all accounts into one, accessible through a bank card: - Use the Simple card for all your purchases - transactions appear in your account in seconds. -Instead of dealing directly with checking and savings accounts, you just tell BankSimple your goals, and they manage your money for you. -“Current Balance” doesn’t tell the whole story – the “Safe to Spend” feature answers the question “what can I spend now?” -There are no hidden fees - Simple plans to split the net interest margin with its partner banks

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 155 Additional ‘Mini’ Case studies CompanyCapabilityDescription SNS Bank Combined public and private sites SNS Bank developed an innovative multichannel banking strategy that puts the Web at the centre of the customer relationship. In cooperation with Web design agency info.nl, SNS Bank developed a new site that seamlessly integrates both the public and the secure parts. Customers who are logged into online banking can access all public site content directly from the secure site. They go through shortened application processes for simple products like savings accounts because application forms are prefilled with existing customer data Liberty Mutual Granular home and personal insurance products Liberty Mutual provide several insurance products to householders. These include “breakout” products such as renters and condominium owner covers that are subsets of a traditional homeowners’ product, but with specific limits tuned to the needs of renters and condominium owners. These breakout products include a personal liability cover, a separate flood insurance product and a separate identity fraud insurance cover. Each product is rated separately (rather than using a single set of rating tables) and priced to the exposures associated with each product. Buyers of these products tend to be less sensitive to price, lifting profit margins for Liberty Mutual CitiBank Using big data to cross sell, detect fraud, and analyse credit worthiness Citibank has partnered with IBM to use big data for up-selling/cross-selling opportunities. It is stipulated that they will also use IBM to detect fraud and analyse customer credit worthiness

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 156 Additional ‘Mini’ Case studies CompanyCapabilityDescription CBA Customer centricity to develop deeper relationships Commonwealth Bank of Australia (CBA), which has made a significant investment in developing deeper relationships with customers by moving to a new core-banking platform based on a customer-centric model. "This helps us better understand customers, their roles and relationships, compared to an account or product-based view,“ explains CBA's senior media adviser Steve Batten. "The bank is actively pursuing technology trends like big data to get deep insights about our customers from a wider range of sources, and be more meaningful in their lives.“ SAGA Creation of a broad offering for a specific affinity group Saga has built a broad offering to the UK over-50 market with excellent results: 2.2 MM FS customer base (+10% of 50plus segment), with profits of ~A$143 MM p.a. in 2004. Saga was bought by Charterhouse Financial in 2004 for A$3.25 BN, implying a P/E multiple of 23. Saga created a comprehensive platform for “50+” market by offering cover financial services, travel, radio, media, community and other needs of the affinity group, heavily relying on direct marketing to 7.6MM customer database, developing a strong brand service for “50+”. Danske Bank Auto CRM Danske Bank was awarded the Cross Channel Integration award for putting their customers right in the center with a wide range of digital touch-points and service windows. The bank manages to create user-friendliness and real-time updates on all platforms that meet customer needs for fast service. Whatever channel and platform, Danske Bank customers can make agreements and be served 24-7 ABN AMRO Consistent, simple, and easy to understand communication ABN Amro has made a strong commitment to make all communications, both internal and external, clearer and easier to understand. In a speech, the bank’s CEO, Gerrit Zalm, said, “The language used should be simpler, such that 90% of the population understands it.” According to Zalm, the language initiative applies not just to written brochures, web ages and the like but also to spoken language when staff members advise customers. The overall goal is transparency, clarity, easy interactions, no misunderstanding and ultimately better service and higher levels of customer satisfaction

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 157 Additional ‘Mini’ Case studies CompanyCapabilityDescription BlueKai Aggregation of intent data BlueKai is at the center of the digital data economy and the largest data auction marketplace for all audience data. With quality and fair market pricing at its core, BlueKai attracts and aggregates intent data from top tier providers to reveal valuable in-market shoppers across key verticals. As a result, the BlueKai Exchange is the largest source of high performance intent data revealing over 160M unique consumers who are ready to buy. The BlueKai Exchange offers over 30,000 data attributes across in-market, demo, geo, psycho and occupational categories to increase performance and scale for direct response and branding campaigns RockBridge Statistical customer segmentation techniques Rockbridge’s preferred statistical approach for customer segmentation is Latent Class Analysis, which produces mathematically precise and highly distinctive groupings, and is superior to traditional cluster analysis methods. They also support Principal Components Analysis and CHAID Analysis for some customer segmentation studies. They maintain proprietary segmentation tools, including Techqual™ scale for measuring receptiveness to cutting edge products and services, and the Greenovator™ scale for classifying consumers by their receptiveness to green products and services. Rockbridge is skilled in telling a compelling story that gives management insight into how their customers think and how they can best leverage the results in target marketing ANZ Changing sale side of relationship management The head of technology for ANZ Bank's institutional arm has said that big data will help the bank become intimate with the needs of its customers, in an age when those customers no longer want to spend a lot of time in meetings. "Our customers expect us to turn up fully understanding everything about their business, and with a value proposition for them that's already tailored, before you walk in the door."

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 158 Additional ‘Mini’ Case studies CompanyCapabilityDescription Verizon Mobile carriers are mining, packaging, and repurposing their subscriber data to create powerful statistics Mobile carriers are now carefully mining, packaging, and repurposing their subscriber data to create powerful statistics about how people are moving about in the real world. More comprehensive than the data collected by any app, this is the kind of information that, experts believe, could help cities plan smarter road networks, businesses reach more potential customers, and health officials track diseases. Verizon Wireless shows how such a program could come together. In late 2011, the company changed its privacy policy so that it could share anonymous and aggregated subscriber data with outside parties. That made possible the launch of its Precision Market Insights division last October. DSB Interaction Analytics to improve customer service DBS Bank Ltd has rolled out interaction analytics technology at its Singapore-based customer centre to enhance its customer center efficiency. By using speech analytics, DBS can identify the type of calls that require longer handling time such as loan enquiries. Once these topics are flagged, the analytics solution goes one step further to pinpoint recurring key phrases across these calls. The bank then uses this information to determine the underlying causes such as unclear communications, process issues or knowledge gaps. T Mobile Some integration across data sources T-Mobile USA, Deutsche Telekom’s US-based mobile unit, has used Informatica’s PowerCenter to predict customer defections based on the analysis of its 33m customer data records, web logs, billing data and social media information. By combining big transaction and big interaction data, T- Mobile has gained a better view of the reasons behind customer defections, which it was able to cut in half in a single quarter. Cable Com Customer attrition Cablecom, a Swiss telecoms operator, has reduced defections from one-fifth of subscribers a year to fewer than 5 per cent by crunching the data it already had. Its software spotted that although customer defections peaked in the thirteenth month, the decision to leave was made much earlier, around the ninth month, as indicated by things such as the number of calls to customer support services. So Cablecom offered certain customers special deals seven months into their subscription and reaped the rewards.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE Source: secondary research 159 Additional ‘Mini’ Case studies CompanyCapabilityDescription Farmers Insurance Sharing analytics data with intermediaries to increase profitable new business Farmers Group, a subsidiary of Zurich Insurance, is using analytics to improve the science of new business acquisition and customer retention. They are sharing their analytics insights with intermediaries to drive more personal lines business in its direction at lower cost. By focusing on customer lifetime value rather than the traditional product class, renewal year or portfolio view, Farmers’ analytics team identified that the top 20% of customers delivered 80% of premium and 90% of profit. The analytics team steered intermediaries to target more of these customers. By doing so, they were able to lower their acquisition cost, improve their gross written premium and lift profit without lowering pricing. EBM Insurance Virtual underwriting software improves risk selection One leading brand stated that as many as 10% of motor insurance applicants did not provide details on previous claims. Government statistics claim that one in six applicants input false information. EMB’s own research uncovered that 20% of the population surveyed considered it acceptable to bend the truth when applying for insurance. By harnessing access to “big data” such as external databases, EMB has been able to profile applicants and perform consistency checks on some data provided to insurers. By looking at three dimensions – driver, vehicle and insurance covers, EMB has been able to identify and remove a dangerous lag in underwriting capability. eBay Next best offer EBay bought New York startup Hunch to help improve its recommendation services. EBay said it will use Hunch’s “taste graph” technology to provide its users with non-obvious recommendations for items based on their unique tastes. Progressive Segmentation Progressive has put analytics and modelling to profitable use in defining new segments. Mining widely available insurance industry data, Progressive defined narrow groups, or cells, of customers—for example, motorcycle riders age 30 and above, with college educations, credit scores over a certain level and no accidents. For each cell, the company performed a regression analysis to identify the factors that most closely correlate with the losses that group engenders. It then set prices for the cells that would enable the company to earn a profit across a portfolio of customer groups.

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 161 TitleSourceDescription Ace out-of-the-ordinary interactions to win loyal customers Bain & Co., 2012This article identifies three loyalty enhancing strategies. Customer centric bankingInfosys, 2013 Banks today are moving back to basics, shifting attention from complex product offering to developing greater connect and intimacy with the customers. This paper from Infosys highlights some of the challenges banks face in this transition and seeks to delve upon the approaches to achieve this transformation seamlessly Customer retention Ernst & Young, 2013 In this case study, one of EY’s clients - the life insurance division of a leading Australian bank - was struggling to retain customers. The paper describes how the customer lapse rates were above industry benchmark, and how EY diagnosed the key drivers of lapse Customer loyalty in retail banking Bain, 2012 This edition of Ban & Company 's annual survey of consumer loyalty in retail banking covers 150K account holders in 14 markets. The major survey findings were a surge in mobile banking and the need to tailor digital and physical channels to the priorities of high value customer segment Delivering exceptional customer experience Accenture, 2013 This paper from Accenture describes how in today's insurance environment, where features and price can be quickly matched by competitors, customer experience is becoming one of the primary drivers of differentiation and, ultimately, high performance How to build analytics into the insurance value chain Ernst & Young, 2013 This paper explores how insurance companies can apply whole brain analytics to solve business problems and find new areas of value. It also explain the practical realities of embedding a useful and usable core analytics capability through the organisations Insurance 2020, unleashing the value from values PWC, 2013 The central message from Insurance 2020 is that whatever an organisation is doing in the short term - be this dealing with market instability or just day to day business - needs to be looking at how to keep pace with the sweeping social, technological, environmental, economic and political developments ahead Insurance, customers and growth KPMG, 2013 KPMG explains how deep understanding of customers, products and services is crucial to delivering profitable growth, and how relationship and customer loyalty will be strengthened Insurers, intermediaries and interactions IBM, 2013 IBM believes insurers need to allow their customers broad access to information while keeping the special relationship with intermediaries alive, in order for the industry to recapture lost trust Maximising customer retention Accenture, 2013 Companies can achieve better retention rates, reduce acquisition costs and boost market share by addressing the root causes of customer attrition and applying targeted treatment strategies that involve all service channels and functions in an end-to-end effort to improve the customer experience Suggested Relevant Articles and Additional Knowledge References

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 162 TitleSourceDescription Setting a New Course: The Customer Experience Challenge Facing Central Europe’s Retail Deloitte, 2012 This long report contains insights at two levels. Firstly, a surprisingly useful analysis of customer satisfaction and its drivers. Secondly, relatively comprehensive analysis of retail banking markets across Central Europe Five ‘no regrets’ moves for superior customer engagement McKinsey, 2012This article identifies some ways to jump-start customer engagement across an organization Benefitting from Big Data: Leveraging Unstructured Data Capabilities for Competitive Advantage Booz & Co., 2012 The article provides workmanlike presentation of the trends toward overwhelming growth in the volume, variety and velocity of unstructured data – a veritable “data tsunami”. It cites several mainstream examples of data sources and the productive uses to which they can be put. Next Generation Loyalty Management Systems: Trends, Challenges, and Recommendations Capgemini, 2012 This paper looks at trends in loyalty management across three dimensions—operational, market and technology—and explores challenges and recommendations for financial institutions. Driving Business Value from Integrated Multichannel Distribution Accenture, 2012 The basic idea of putting middle ware between product and manufacturing is not new, but the notion of an assembly layer that combines product and service components in a multi-channel architecture is. This paper is very well written and provides useful take-aways for most retail internal consultants. Customer-Centricity in Retail Banking BCG, 2012 This article discusses all aspects of the banking business model in customer-centric speak, then specify three partially intersecting patterns of customer centricity: Guardianship (think lite advice/wealth bank models); Retailing (think community marketing rather than store experience) and Convenience (think frictionless). The Challenge for the New Bank CIO: How to Achieve Customer-Centricity by Making Better Use of Six Emerging Technologies Booz & Co., 2012 This report on how to achieve customer-centricity using six emergent technologies i.e. mobility (the use of mobile devices), high-end analytics, big data management, next-generation data processing, cloud computing, and service- oriented architecture. Banking Technology Vision: Technology Waves That Are Reshaping the Banking Landscape Accenture, 2012 Accenture has studied how technology and business trends are converging—and what that means for banks. Read this report to learn about the technology waves that are shaping the banking landscape and how those technology trends align with banking trends, and how banks can leverage technology to achieve high performance. Suggested Relevant Articles and Additional Knowledge References

© Internal Consulting Group 2015 KAR 022 – Lead Conversion Best Practices in Health Insurance | COMMERCIAL IN CONFIDENCE 163 TitleSourceDescription So you really think you are customer focused Oliver Wyman, 2013 Retail financial services companies are the least trusted industry sectors globally, viewed amongst the weakest on service and responsiveness. OW explains how it happened and what is the best approach to solve the problem The journey toward greater customer centricity Ernst & Young, 2013 The paper describes how customers are willing to build long-term relationship with their providers and purchase multiple products. However, insurers must improve the effectiveness of their communication, as well as recognise and reward the value of the relationship. The valued insurer – leading the pursuit of sustainable growth KPMG, 2013 KPMG defines four key attributes - Focus, Efficiency, Agility and Trust - that a successful and valued insurer should consider embedding in its business model and integrating into its strategy The powerful economics of customer loyalty in Australia Bain, 2013 Two Bain partners from the Sydney office describe how for an enterprise to thrive, it has to invest in loyalty-building initiatives that will yield a high return Voice of the customer Europe Ernst & Young, 2012 EY consumer insurance survey in Europe Voice of the customer Americas Ernst & Young, 2013 EY consumer insurance survey in the Americas Welcome to the consumer revolution Ernst & Young, 2013 EY describes how insurers can heed the Voice of the Customer, rethink relationship and embrace innovation to drive profitability and market leadership. The document also includes the 2012 EY Global Consumer Insurance Survey results Suggested Relevant Articles and Additional Knowledge References

UNBUNDLED CONSULTING PROJECT SUPPORT CAPABILITY BUILDING PROFESSIONAL ASSOCIATION Internal Consulting Group Email enquiries@internalconsulting.com or visit our website at www.internalconsulting.comenquiries@internalconsulting.com 164

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