Service: High Customer Satisfaction at Low Cost

Scott StolzSenior Vice President

Administration

The 3 Keys Behind Superior Customer Service

▲ Ownership

▲ Ownership

▲ Ownership

But What Does “Ownership” Really Mean?

The ability to say, “Yes, I can do that for you.”

The Tragic Phrases of Customer Service

▲ Rather than, “yes, I can”, we usually hear…:– “You can’t…”– “You must…”– “You have to…”– “We can’t…”

Most companies ask…

“Why should we do it?”

at JNL, we ask…

“Why shouldn’t we do it?”….

The differences are slight, but theconsequences of these differences are huge

What Facilitates Ownership?

▲ An environment where it is OK to make mistakes

▲ An environment that encourages people to ask: – “Why do we do it this way?”– “Why can’t we just…?”

▲ A service structure that supports the environment you want to create– We have found that cross-functional teams

facilitate the ownership we seek to promote

Old Structure: 1995 - Spring 2000

▲ Client must work with multiple departments and people

▲ Service reps only see their small piece of the big picture

▲ Structure does not facilitate “ownership” of a problem - too easy to:– Pass the problem on and/or…– Point fingers at the other functional areas

Life New Business/Underwriting

Life Applications and Reissue

TSCPhone Calls On Everything ExceptCommissions, Illustrations, PACS

Customer Service CenterAnnuity Issue, Withdrawals

Broker ManagementCommissions & Licensing

Operations SupportPACS, Illustrations, UL

403B Support, Correspondence

Customer

Today’s Structure

▲ Client can meet all their needs within each product line▲ Structure facilitates ownership - it’s hard to blame or

point fingers at the person sitting next to you

Life Division

- Phones

- Policy Issue

- Inforce Service

Fixed Division

- Phones

- Policy Issue

- Inforce Service

Indexed Division

- Phones

- Policy Issue

- Inforce Service

Variable Division

- Phones

- Policy Issue

- Inforce Service

Client

Support Functions

Call Center Support

QA & Training

Technology Support

Licensing & Commissions

This structure is small enough to be responsive to customers, but big enough to provide all the resources needed to add significantamounts of business at virtually no additional cost

Since We Restructured To Enable Individual ‘Ownership’…

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Average daily phone volume has been reduced 33% due to fewer transfers and higher first call resolution

Company Complaints Cut In Half

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Telephone Service Levels Stabilized

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GOAL Overall Fixed Annuity Life Inforce Life Pending Life Indexed Annuity

SIP &

Conversion to

Lucent Phone

System(08/26/00)

CTI Policy #

Routing &

RMO

Reorganization

(11/12/01)

Inforce & Pending Life Single Skilled

(01/01/02)

Telephone service levels (% of calls answered within 30 seconds) has stabilized and exceeded our 80% goal in 26 of the last 28 months

Tenure Nearly DoubledAverage Tenure vs. Number of Customer Service Associates

OVERALL (Fixed Annuity, Inforce & Pending Life & Indexed Annuity)

18

.9 20

.3

18

.5

18

.81

8.1

19

.01

7.7

16

.01

6.1

15

.41

6.3

15

.0

16

.0

17

.0

15

.51

5.0 16

.41

6.8

15

.8

16

.9

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.91

6.8

17

.8

18

.41

9.2 20

.52

1.8

22

.3 23

.8

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.6

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.9

26

.92

7.6

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.5

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.62

1.3

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.4 23

.8 25

.22

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.02

6.4 27

.72

8.0

87 85

95

102

95

88

10498

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96 9894 93

109114

106105110109

114109107109

106103101 99

9489

86 87

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110106

103101104

97 96 94

88 86

121

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Average Tenure Number of Customer Service Associates

Turnover in the phone center has decreased. The required number of phone reps has decreased. Average tenure of telephone reps has nearly doubled.

History of Annual Service Expenses

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JNL Assets

$ Thousands JNL Assets

Service Rated Better Than Competition

29%

31%46%

21%

29%

67%

0%

25%

50%

75%

100%

Life Fixed Index

Pe

rce

nt

Much Better Slightly Better

Service Comparison by Product(Percent Rating JNL Better Than Competitors)

60%75%

88%

JNL agent survey – Spring, 2002

Technology is a tool…

…For providing superior service. It is not in itself the answer. ▲ RACE (Rapid Annuity Entry) - Expert system:

– Checks data against good order requirements– Integrates electronic images and workflow– Provides a platform for electronic order delivery

▲ NICE – Digitally records voice, data and keystrokes – Enables us to monitor calls for coaching

and QA purposes

Technology is a tool…

▲ Internet: focused on features our clients will really use– Policy account values– Contacting us– Pending policy and commission information– Product performance– Investment rellocations– Address changes

Our Service Philosophy has Enabled Us to…▲ Attract and retain better people▲ Reduce staff▲ Reduce hiring and training costs▲ Reduce phone calls, errors and

customer complaints

All of which has given us a platform to issue more policies and support more assets with no increases in expenses

The Real Secret to Superior Customer Service

It’s not a secret at all. It’s just hard work.