Agency Technology Implementation

Pike-Conway-Dahl Insurance Agency

Multi-Company, Multi-Product Worksite Marketing

For
Agency Growth

Introduction: Agency Revenue Tools LLC is an outgrowth of The Pike-Conway-Dahl

Insurance Agency, an Independent Insurance Agency with offices in Maine and New
Hampshire. This agency was an early implementer of a multi-company approach to
worksite marketing of property-casualty insurance products and has been in the worksite
insurance marketing business for over ten years.

The mission of Agency Revenue Tools LLC is to enable Independent Insurance Agents
to aggressively and effectively achieve growth in property-casualty personal lines, as well
as in other consumer insurance product areas, primarily by bringing the competitive
advantage of a multi-company, multi-product approach to groups of individual
employees at the worksite.

Agency Revenue Tools LLC is the creator of Worksite Marketing Manager, a second-
generation technology tool that allows Independent Agents to efficiently and accurately
manage the payroll deduction process. By adopting the Agency Revenue Tools Agency
Growth Plan, Independent Agents can create a marketing and service environment that is
delivered, with endorsement by participating employers, to the worksite, where consumer
insurance product prospects and customers are to be found.

The net result of effective implementation of a sound agency business plan, utilizing the
opportunities presented by Multi-Company, Multi-Product Worksite Marketing, is
fourfold:
1. Significant Business Growth;
2. Greatly Improved Personal Lines Client Retention;
3. Major Efficiency Gains resulting from virtually total elimination of payment
related cancellation activity (This element produces similar efficiencies for
carriers with whom the Independent Agent places business in this manner);
4. Increased Revenue Stability within the Independent Agency, this being the result
of lessened reliance on one major revenue source (traditionally, the commercial
property-casualty account, which is won or lost annually).

For participating insurance companies, this new environment also means increased
business, greatly improved retention and the same dramatic reduction in payment-related
policy status issues that inure to the Independent Agency.

For endorsing employers, this activity, brought to them by an Independent Insurance

Agency, means improved employee retention and a workforce whose appreciation is
directed to their employer by this easy and competitively-priced method of paying for
insurance that must be purchased (homeowners and auto insurance), as well as other,
voluntary insurance and related products and services.

For participating employees, the Independent Agency delivers an end to the need to meet
insurance company-imposed deadlines for payment by cash or check, to avoid threats of
cancellation for non-payment of premium. The Agent also gives employees the ability to
think of their home and auto insurance premiums as another voluntary benefit that can be
conveniently purchased through their employer’s payroll system, thus building employee
goodwill toward the employer.

I. Description of Technology and its Benefits

General Description of Technology Implemented:

Worksite Marketing Manager allows the conversion of full-term policy premiums
involving any combination of insurance carriers, lines of business, products and services
to a payroll deduction basis of premium collection, requiring only one payroll slot within
any employer payroll system, whether automated or manual, internal or out-sourced.

The system is ASP-Based, utilizing XML Technology. The application takes advantage
of Internet Explorer 5.5 or above.

Discussion of What This Technology Does for Agency and How it has Improved
Business Processes/Work Flows:
Beginning with full-term policy premiums, Worksite Marketing Manager recognizes
employer payroll conventions, calculates employee deductions for policies, advises
employers and employees of amounts to be deducted, calculates deduction changes
caused by midterm policy endorsements, bills the employer, reconciles moneys received
with the amount billed, generates accounts current for insurance companies represented,
provides detailed production reports, and calculates agency commissions from Worksite
Marketing activities. Efficient, electronic communication with employers’ payroll
systems is available for Agencies who have opportunities to deal with employers whose
payroll systems have such capability.

Description of the Major Benefits/Payback from this New Technology to the Agency
and the Customer (Try to be specific in terms of dollars saved, staff time saved, new
capabilities created, etc.):
The primary purpose of Worksite Marketing Manager is to support a Multi-Company,
Multi-Product revenue growth strategy, within an Independent Insurance Agency. That
being said, a very important by-product of this type of premium collection process is that,
provided proper conventions are in place, there will be no late-payment related issues
(cancellation, cancellation warnings, reinstatement, or in-force status checks) generated
by business sold and serviced within this agency activity area. Normally, payment-
related issues consume 25%-50% of most agency personal lines service representatives,
with similarly significant time consumption on the insurance company side of the
transaction.
Worksite Marketing Manager is available to Independent Insurance Agents, only as a
supporting element in the Agency Revenue Tools Multi-Company, Multi-Product
Revenue Strategy. It is not sold as a standalone software product. In order to acquire
access to Worksite Marketing Manager, agencies must attend a two-day training school,
within which trainees are exposed to all elements of the Strategic Growth Plan, Prospect
Management, Client Service Issues and manipulation of Worksite Marketing Manager.

Initial cost of the Agency Revenue Tools Plan is $2,500., including setup and training.
Monthly support fees are $350.

Annual support costs to a participating agency are approximately equal to the revenue
derived from 30 or less personal accounts. The basic agency license will support 3,000
individual insureds, each with an unlimited number of policies. By the time that limit
(which can be increased) is reached, the agency should be realizing at least $600,000.
annual property-casualty commissions (Based on a conservative estimate of $200. agency
commission per personal lines account) .If the participating agency expands its menu of
consumer insurance products and services beyond homeowners and auto (particularly
into non property-casualty insurance products and services), realized commissions should
expand accordingly.

II. Details of the Technology Implementation

More Detailed Discussion of the Specific Hardware and/or Software acquired, the
Steps Taken to Implement it, and how it fits with the rest of the Agency’s
Technology:
Worksite Marketing Manager requires Microsoft Internet Explorer, Version 5.5 or
higher. High speed Internet access is highly recommended, although the system will
function on a fast analog connection.

Time Required for Agency Staff to Implement the New Technology:

Two days of attendance at an Agency Revenue Tools Training School (included in initial
setup cost) is required for all participating agencies. Attendees are exposed to the Agency
Revenue Tools Multi-Company, Multi-Product Worksite Marketing Strategy (How to
solicit employers, how to successfully solicit insurance carrier participation, how to work
with employee groups, how to market various insurance products through the worksite,
etc.), as well as manipulation of Worksite Marketing Manager. Required attendees
from agency staff include one production-oriented person, as well as the person who will
be responsible for the operation of Worksite Marketing Manager.

Additional operators of the software can be trained by phone, if desired. A basic, “hands-
on” training session would require one, three-hour telephone/Webex call with the agency.

Please describe any difficulties in implementation:

As mentioned earlier, Agency Revenue Tools LLC enables Independent Insurance
Agencies in the implementation of a growth and retention process. This process does
require focus on the part of the agency. On an ongoing basis, Agency Revenue Tools will
continue to support the agency business strategy with problem solving suggestions, as
well as continuing evolution of the Worksite Marketing Manager System. If problems
arise, either with software or the business process, Agency Revenue Tools provides
solutions service throughout Coast-to-Coast business hours.

Would you do anything differently in hindsight:

The entire Agency Revenue Tools business strategy was built on our own Independent
Insurance Agency worksite marketing experience, coupled with several years of
consulting and training agencies and companies, within Agency Revenue Tools LLC.

Worksite Marketing Manager , as a product, contains elements of its evolutionary

predecessor, IDS, enhanced by our knowledge of the automation needs of Independent
Insurance Agencies that engage in multi-company, multi-product worksite marketing.
That experience is the result of 10 years of experience in the field, both as Independent
Agents and as a group of people experienced in the development, sales and support of
users of the IDS System.
III. Costs and Return on Investment

Cost of the New Technology Broken Down as follows—

Hardware: Agency must make available at least one PC (vs. Mac) computer with
Windows 98,2000, XP, 128 megabytes RAM, 5 gigabyte disk capacity and Internet
connectivity to Internet Explorer, version 5.5 or higher. Costs vary widely, with “street”
costs beginning at approximately $700. in discount stores. In most cases, agencies can
utilize existing hardware, since dedicated machines are not necessary.

Software: Initial cost of the Agency Revenue Tools Plan is $2,500., including setup and
training. Monthly support fees are $350.

Annual support costs to a participating agency are approximately equal to the revenue
derived from 30 or less personal accounts. The basic agency license will support 3,000
individual insureds, each with an unlimited number of policies.

Outside Technology Consultant/Professional: NA dollars; NA hours

Should not be necessary, in most cases. Routine business-case consulting is available via
email or telephone from Agency Revenue Tools Support and are included in Support
Fees. Individual, customized consulting and training are available, when appropriate,
through Agency Revenue Tools LLC, at reasonable fees.

Other (Please describe this cost factor(s)): As long as high-internet access is available
to the Agency, there are none.

Total number of agency workstations impacted: Number will vary, but, as few as one.
In the basic license, Independent Agents receive passwords to Worksite Marketing
Manager that allow two individuals to access the software, simultaneously. Because the
system is accessible from any adequately equipped PC, be it desktop or laptop, the
system is completely portable and can be operated within the Agency, at the
worksite, or from any other location.

If an Agency desires access by more than two, simultaneous operators, additional

passwords are available for an additional monthly support fee of $175. per password.

Please estimate the Return on Investment time period for this implementation:
Once the Agency Revenue Tools LLC plan is installed, with two Agency staff members
having been trained, Return on Investment depends on each Independent Insurance
Agency.

Annual support fees for the basic installation (3,000 individual insured capacity, two
simultaneous individual system users, unlimited number of policies) amount to $4,200.
Minimum annual agency commission for a single personal lines account (auto and
homeowners polices covering two cars and a modest home) should be at least $200. and
will nearly always be substantially higher.

First-year cost to each Agency will be $6,700. At most, cost factored into ROI should be
the equivalent of the first 34 accounts written in the first year of activity and the
equivalent of the first 21 individual personal lines accounts written each successive year.
Even in its first year of this activity, the ROI time for this investment should be no more
than two months from actual startup, with participating employee groups in place. With
effective use of the Agency Revenue Tools Strategic Marketing Plan, annual system
support costs should be recovered within the first two weeks of each year, or less.

The cost of agency personnel dedicated to this revenue growth project must also be
factored into ROI calculations. However, nearly any Independent Insurance Agency, with
existing personal lines staff, should be able to implement activity successfully, without
adding to staff, until growth makes this advisable.

IV. Training

Time Required to Train Each Staff Member to Use New Technology Effectively:
As stated earlier, two members of Agency staff must attend an Agency Revenue Tools
LLC School. Sessions involve two consecutive days, and are usually held in Portland,
Maine. Group Training Sessions, consisting of an adequate number of agencies, can be
held at any location (cost dependent upon location), and special pricing is available for
insurance companies wishing to sponsor agency groups.

Once initial Agency training has been completed, additional staff training is available on
request, via telephone and Webex, for reasonable fees.

V. Future Plans and Agency Information

Next Technology Opportunity Agency Plans to Pursue:

Within our Agency, Pike-Conway-Dahl intends to pursue full installation and
implementation of an imaging system. This should be accomplished during the next
several months.

Within its Multi-Company, Multi-Product Worksite Marketing Division, Our Agency

will also be implementing and testing a prospect and client relationship software system
(aka CRM) that has been designed specifically for use by Independent Insurance
Agencies, in pursuit of their Multi-Company, Multi-Product Worksite Marketing Plan.
With the test phase completed, this product will become another Tool offered to its
Independent Agent customers by Agency Revenue Tools LLC.

Name of Agent:
Asa O. Pike, CPCU

Name of Agency:
Pike-Conway-Dahl

Address:
P.O. Box 230
117 Main Street
Fryeburg, ME 04037

Phone:
888-756-8647

E-mail:
asa@agencyrevenuetools.com