Deloitte Case Challenge Presentation

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KPSL GROUP BENEFITS STRATEGICFOCUS SOLUTION.

Alexander McCord

Brian Devlin

Evander Duck

John MacDonald

Manas Kulkarni

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Objectives•Improve the ROE of the Shareholders

•Stabilize Net Income at the Enterprise Level

•Build a Sustainable Competitive Advantage for

KPSL Group Benefits

Corporate Philosophy“Committed to Being the Best in Understanding

and Underwriting the Risks You Face in Your

Business and in Your Life”

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Focus on Both the Small and Mid-size

Market, but Outsource the Account

Servicing Component of the Value Chain.

Strategy 3:

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ROE Issues: Pre Tax Margin

Leading GB Firms Strong Pre Tax MarginKPSL GB Unit:

4.5% Below Average

19.8% Below Industry Leader

Regular Cost Over-Runs

High Cost Structure

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ROE Issues: Pre Tax Margin

Continued

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ROE Solutions:

•Outsourcing•Servicing Component

– Reduce Focus on Less Profitable Components of the Value Chain

•Redefining Focus•Distributing

– Highest Value Capturing Component

•Underwriting– More Focus on Strong Field Underwriting Process

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Negative Feedback Loop

Stabilize Net Income at the

Enterprise Level

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Stabilize Net Income at the

Enterprise Level

•Consistency in Costs and Revenues Income Stabilization

•Reduce Costs: Outsourcing

•Increase Revenues: Investment in IT, Entering Small Case Market

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Build a Sustainable Competitive

Advantage for KPSL Group Benefits

IT has high impact company performance•Currently an area of low competency

•Inflexible Systems

Entrance into small-case segment requires improved IT Systems•Lower Cost, More Efficient Way to Reach Customers

Continued

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Build a Sustainable Competitive

Advantage for KPSL Group Benefits

Partnership with Reputable Financial Institution•Well Capitalized

•Stress Enhanced Financial Performance (Weakness)

•Have Built in Customer Database for Enhanced Distribution to Reach Smaller Niche Markets

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Further Investigation

•Overall NewCon Strategy for Small-Case Market– Greatest Strength: Proprietary Service Technology Platform– Qualitative analysis of other expenditures

•Specific Functional Area ROI by Competitor– Particularly KPSL’s Weaknesses:

– Marketing– Information Systems– Product Development– Employee Development

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Final Reasoning

• Option 3 is Logical and Economical

Strengthens ROE

Stabilizes Net Income

Establishes Competitive Advantage

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THANK YOU FORYOUR TIME.

QUESTIONS?