Overcoming Challenges to Aligning Legal, Ethical and Commercial Objectives

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Overcoming Challenges to Aligning Legal, Ethical
and Commercial Objectives

• CBI March 29th, 2004
• The Research and Advisory Group

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About the RA Group

• The RA Group, the specialist Diversity, Ethnic
  Urban Marketing in Financial Services Consulting
  Firm, exists to help Financial Services clients
  establish strategically sustainable, highly
  profitable market positions in these rapidly
  developing market segments.
• It is founded upon the belief that extraordinary
  opportunity is being wasted in the field of
  diversity marketing. In its view, of the very
  many diversity strategies in place today, very
  few can be described as either fully articulate,
  or, to be blunt, successful. 
• Where the Group has worked with clients to evolve
  fully articulate strategies, subsequent success
  has been measured in dramatic terms, rather than
  in incremental results. Helping clients share
  such success is the Mission of our Group.

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Key issues an alignment challenge

• Commercial
• Avoiding stereotyping and generalizing.
• Compliance
• Avoiding discriminatory selection
• Avoiding discriminatory service.
• Ethical
• Resolving different priorities between
• Foundation work and Community Investment
• Diversity suppler programs
• Recruitment initiatives.
• Objective
• Negotiating resource pressure
• Implementing a clear and agreed ROI framework
• Avoiding program management responsibility
  without authority
• Ensuring top-level buy-in, drive and review.

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Optimal program structure and management
Ethnic initiative controller
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Achieving alignment The RA Groups investment
validation methodology
Market and investment validation methodology
Select Footprint
Define Competences
Competitive Overlay
Investment Benchmarks
Layer Objectives
Real Addressable Market Assessment
Establish Investment Ceiling
Source
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Geographic differences illustrate stark
difference within groups
Product investments as a proportion of liquid
assets, 2002e
NYC
LA
Chicago
Mutual Funds
15
18
22
IRAs and Retirement Accounts
52
50
72
Annuities and Other Managed Assets
11
10
14
Cash Value of Life Insurance
14
13
19
Wealth index
1.00
0.83
0.86
Sample All Hispanics
Select Footprint
Source
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The importance of Acculturation
Indiana Hispanics propensity to purchase
multiple insurance products, including life, by
acculturation status, 2003
Select Footprint
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Layer objectives
Corporate objectives Increase share of business
from growing minority communities, fulfill
foundation requirements and avoid legal challenge.
Personal Lines
Life and Investment
Claims
Legal
Corporate ethnic program objectives Attract
100,000 new customers. Deliver return on
investment from year 2.
Philadelphia Grow new accounts from Asian /
Latino
New York Increase African-American base
Miami Grow Affluent Cuban Funds under Management
Community Relations and Foundation Objectives
Achieve threshold of positive press, and support
defined flagship projects
Layer Objectives
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Definition of competencies
In-program agencies
Community origin staff
Field mgmt buy-in
State
100
250
High
25
400
Moderate
Define Competences
35
520
Low
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Real Addressable market
Real new business available from emerging
affluent ethnic Chinese, Flushing, Queens, NY,
2003e
Real Addressable Market Assessment
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PC Competitor Map National, minorities
Volume of business
Brokers
State Farm
Allstate
American Family
Nationwide
Farmers
Prudential
GEICO
Competitive Overlay
Progressive
Share of Voice
12
Geographic competition for Hispanic life
insurance business
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Establish investment ceilings
Investment ceiling to target Indian Asians SMBs
in Greater Boston 2003-2012
Establish Investment Ceiling
14
Set investment benchmarks
MSA-level investment metrics new auto policies,
Hispanic-dominant geographies
Realized Business, 2004
Available Market
Competitor Filter
Competence Filter
5,500 / 9,650
85,000
75
15
Geo. 1
4,800 / 4,000
80,000
50
10
Geo. 2
5,500 / 6,175
95,000
65
10
Geo. 3
Investment Benchmarks
5,500 / 10,320
86,000
60
20
Geo. 4
15
Optimal program structure and management
Ethnic initiative controller
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Contact
Andrew Nuttney The Research and Advisory
Group New York NY 10009-1537 Office ()
212-217-9625 Fax () 212-217-9116 anuttney_at_resea
rchandadvisorygroup.com
www.researchandadvisorygroup.com