This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. AXA Business Protection Selling Business Protection

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Topics to cover… 1.Business Protection – The Need 2.Selling Business Assurance Planning Preparation Execution

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Business Protection – The Need Why do people go into business? Do it to make money Build their business as part of a dream Expect to pass on the rewards to their family and heirs Want to see the business survive and flourish Enjoy the independence and take pride in its success Want to be own boss and be in control If a key person becomes seriously ill or dies…

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Business Protection – The Need What businesses purchase what protection? Shareholder Protection Loan Protection Executive Income Protection Partnership Protection Key Person Protection Sole TraderPartnershipLimited Company

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Why sell Business Protection? The market… Business Protection is a largely untapped market. At the start of 2007 there was an estimated… 4.7 million businesses in the UK, which equates to approx: 1,200,000 plc 507,000 partnerships 3,000,000 sole traders Source: BERR Press Release 2008 With most SMEs having little or no Business Protection cover, the scope and market potential is substantial

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Why sell Business Protection? The market… 60% of businesses do not have business protection Source: Swiss Re Insurance Report 2005 In 2005, Swiss Re’s Insurance report discovered: The average Life Cover sum assured applied for in 2008 was over £474,000 for Business Protection. Over 3 times more than for Personal Protection Source: AXA Applications 2008 Its estimated that only 5 – 10% of companies have Key Person cover Source: Swiss Re Insurance Report 2005

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Why sell Business Protection? The opportunity… It is also worth noting that Business Protection discussions can lead to further opportunities There is a £500 billion Business Protection Gap Source: Swiss Re Insurance Report 2007 A subsequent report in 2007 found:

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Business Protection – The Need There have been over 200,000 business closures in the first half of 2008 Source: Barclays Newsroom, 2008 half year start ups and closure report 5.8 million working days were lost due to sickness or injury between June 2007 and July 2008 Source: National Statistics Feature – Sickness absence from work in the UK, 2008 Your clients can protect against… Individuals have a 40% chance of serious illness before age 60 Source: censuswww.statistics.gov.uk Individuals have a greater than 1 in 8 chance of death before age 65 Source: interim life tableswww.gad.gov.uk

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Prepare by: Knowing the technical- we can help Learning the structure /script Visualise positive outcomes Preparation Fail to prepare, prepare to fail “ ”

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Typical Sales Process Selling Business Protection

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Sole practitioners Partnerships Small Limited Companies Quoted Companies Managing Director Finance Director Partnership Senior partner Partnership Secretary The world loves a specialis t Identify clients...

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Flyers and sales aids Presentations to the business community Existing clients Referrals Professionals that already work for you Breakfast meetings etc Find a way in…

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Be here Prepare for the first meeting…

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection The first meeting… The objective: To raise awareness of this aspect of managing business risk Complete a preliminary corporate fact find Seek permission to conduct a full review of the risks Agree who should be involved ( decision makers) Seek initial views on business value/key person value and why there is a risk. Design and use questionnaire covering this.( note: not all people you speak to will be privy to information you might hold) Ask for justification of values etc

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Deeper analysis Memorandum/articles –do they restrict share deals Ask about loans and ability to repay Seek views on what happens if share holder dies Seek to understand consequences of key person death More individual fact finds? Don't forget other business opportunities Aim to really understand what the client wants Keep in mind the requirements of the provider Following meetings…

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Routes to a satisfactory conclusion: LOA on Key Person Shareholder Protection in Trust for other Shareholders Partners in trust for other Partners or Accrual agreement and own life for beneficiaries. Capital accounts still need to be dealt with. Combine Key Person and Shareholder Protection in one policy in trust for other Shareholders LOA on Shareholders to “buy-back” shares Understanding the Underwriting approach ( varies with each provider) Work out a solution…

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Taxation matters; Key person, the insurance is to protect revenue – which in turn provides profit Loan protection – no tax relief Share protection- no tax relief Premiums generally paid by the business and treated as earned income therefore subject to income tax Claims treated on their merits (despite how premiums have been treated) but generally only true key person insurance is taxed as a business receipt This information has been based on our understand of current tax legislation, which is subject to change and individual circumstances Work out a solution cont’…

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Generally available 100% Quoted companies 50% (if controlling interest) Lost if asset is subject to a sale agreement Only available on assets used in running the business IHT Business Property Relief

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Prepare a report: The situation The risks The solutions The costs The detail Next steps Putting pen to paper…

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Present to the Board (ensure minutes taken) If other professionals are in attendance address their issues and seek their agreement in front of the group Seek Board approval Move to the paperwork In the Boardroom

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Check requirements Understand the usual underwriting approach 3 years profit figures/accounts No Financial Questionnaires required under £1 million for Life Cover and £500,000 for Critical Illness Cover Medical questionnaires ( Tele-underwriting?) Discuss case with Underwriting Team before submission Be ready to justify sums assured Submit the paperwork

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Share protection for directors Key person protection Key person protection for shareholders as all three are key to the company’s continuing success Possible business loan protection for bank overdraft Business loan protection for directors’ loan accounts Executive Income Protection What would TAT Limited be interested in? Selling Business Protection Case study – TAT Limited

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. TAT LIMITED DIRECTORS’ REPORT PROFIT ……. AFTER TAXATION £180,480 ( £89,829) RECOMMENDED DIVIDEND £500 PER SHARE ACTIVITY – TRAINING AND DELIVERING OF TECHNICAL EXCELLENCE DIRECTORS & INTEREST IN SHARE CAPITAL ORD SHARES AT £3.33 EACH AT AT Greg Derek Brian 100

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. BALANCE SHEET – £ 300,000 60,000 8,000 FIXED ASSETS PROPERTY TANGIBLE ASSETS MOTOR VEHICLES FIXTURES, FITTINGS 2006 £ 350,000 70,000 10,000 £ 368, ,000 CURRENT ASSETS TRADE DEBTORS STOCKS MONEY MARKET CASH ON HAND 180, , , , , ,000 91,000 15, ,000 CURRENT LIABILITIES 8,000 1,000 75,000 TRADE CREDITORS ACCRUED CHARGES PROPOSED DIVIDEND 9,000 1, ,000 13,000TAXATION43,000 10,000 3, ,000 PAYE & INC HM CUSTOMS & EXCISE/VAT BANK OVERDRAFT 10,400 4,000 40, , ,200NET CURRENT ASSETS118, ,200TOTAL NET ASSETS548,600 How secure? How old? Healthy cash position Not much owed Re valued ? Why, to support trade debtors?

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. REPRESENTED BY SHARE CAPITAL & RESERVES ££ 999CALLED UP SHARE CAPITAL ,829RETAINED PROFIT57, _______ DIRECTORS’ LOAN ACCOUNTS _______ More detail required

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection TAT Limited - advice Key person is linked to central government and wins substantial LEA contracts. 50% of gross profit of £2million directly related to her sales. She earns £500k Directors value the business at 3 times gross profit and are all fully engaged in the business. Each would want £2 million ( inclusive of loan account) as a “walk away” value Each want wealth advice at a personal level The business wants advice on pension arrangements

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Key person insurance 5 year renewable term Life Cover - £3 million Share protection 20 year term £2 million in trust for each of the other directors Executive income protection on all directors Other areas result in IHT planning and pension sales Selling Business Protection TAT Limited - solutions

AXA Protection Account Business Protection This presentation is directed at professional financial advisers only and should not be distributed to or relied upon by retail customers. Selling Business Protection Business Assurance sales require strategy and planning Knowing your customer means understanding their wishes before you look at the technical Building solutions requires the technical bits Presenting solutions is best done on paper and at Board meetings Selecting the provider is more about the support offered rather than the raw cost Fees and Commission fit well in this market In summary