Pitch Summer Project Salar Bijili To Siib

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Confidential. All trademarks appearing herein belong to their respective owners.
Project Review –
Summer Internship Program 2009
Name: Salar Bijili
Institute: SIIB, Pune
Project Title: Business opportunities for Genpact in the U.S LTCI Industry
CoE: BFSI - Genworth
Date: 08/06/2009

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Executive Summary
The Project
Explore business opportunities for Genpact in the U.S LTC
Insurance Industry
Recommendations
 LTCI has potential to grow and Genpact should expand our
business in LTCI leveraging our capabilities
 ***content suppressed***
Key Project Findings
 LTCI Industry poised to grow with aging baby boomers,
reverse mortgaging and stricter Medicaid norms
 LTCI carriers are looking at group LTCI and hybrid products
to grow their business
 Top LTCI carriers have pain areas in benefit ratios,
persistency, LTCI growth and future reserves
 ***content suppressed***
Project Approach
 Study the current U.S LTCI Industry and its potential growth
 Identify major players, their pain areas and growth strategies
 Map our capability to pain areas
 Suggest a go-to-market plan for Genpact

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Study U.S
LTCI
industry
Project Flow
LTCI Industry
snapshot
STEP 1
STEP 2 STEP 3
CM
Prospect LTCI
carriers
Identify pain areas
of the carriers
Map our
capabilities
to pain areas
Objective
Competitive
benchmarking
Deliverable
STEP 2 STEP 3 STEP 4 STEP 5
FINAL DELIVERABLE
List of
carriers
Report pain areas
of carriers
Capability map
of
Genpact
Benchmark report
Go-to-market plan
with a
business case
What?

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STEP 1: Understand U.S LTCI Industry
Objective:
“To study the LTCI industry in the
U.S, its potential and why Genpact
should look to grow there”
Deliverable:
“U.S LTCI Industry - Snapshot”
STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

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Overview of the LTCI Industry
Need for LTC Insurance
 Growing costs of long term care
 Baby boomers(77 million)- Increased
Longevity
 Shrinking role of Medicaid in long
term care
Current state of LTC Insurance
 35% LTC privately funded- $80.8 bn
 4.8 mn lives covered
 Premium in force - $8.6 bn
LTC Insurance is the most viable option to cover growing long term care costs as self-
insurance is not affordable by many aging Americans.

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Potential market for LTC Insurance
Source: AARP-Across the states profiles of long term care and independent living – By ari houser, 2009
LTCI has become competitive and has immense potential
to grow in the future
Informal LTC Formal LTC
Vs

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Why LTCI Industry?- The way forward
 Emergence of hybrid/combination products
 Life and annuities with LTC
 Reverse mortgaging as a source of LTC funding
 $3 trillion of home equity with seniors
 Shift from MedicAid to private LTC carriers
 Stringent norms for Medicaid LTC
 LTC and elder care legislation
 Could boost LTC sales by tax incentives
LTCI is poised to grow and Genpact, give our service capabilities should look for growing
our business in the U.S LTCI domain
Annexure : Click here

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STEP 2: Identify prospective LTCI carriers
Objective:
“Identify major LTCI carriers and spot
potential ones for Genpact to target ”
Deliverable:
“List of LTCI carriers for Genpact to
target”

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LTCI carriers - Identification
Genworth financial
John Hancock
Prudential LTC
MetLife
CNA corp
UNUM corp
Northwestern LTC
Penn treaty America
Bankers Life & Casualty Co
Allianz life
State farm LTC
New York Life
Aegon Americas
Massachusetts mutual
The companies identified are top 10 LTCI carriers in the group and Individual LTCI
business
IDENTIFIED
Identification criteria
1. Leading Insurance player in the
U.S with varied LoB
2. Top 10 U.S Individual / Group
LTCI carrier

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LTCI Carriers - Prospective
Genworth financial
John Hancock
Prudential LTC
MetLife
CNA group
UNUM group
Northwestern LTC
Penn treaty America
Bankers Life & Casualty Co
Allianz life
State farm LTC
New York Life
Aegon Americas
Massachusetts mutual
Genworth financial
John Hancock
Prudential LTC
MetLife
CNA corp
UNUM corp
The companies are top 10 LTCI carriers with visible problem areas
IDENTIFIED
PROSPECTIVE
Prospect criteria
1. Availability of SEC filings
2. Demonstrable financial pain

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STEP 3: Identify Problem areas of Prospects
Objective:
“To identify problem areas, business
challenges and growth strategies of
prospective clients”
Deliverable:
“A report on the pain areas and
growth strategies of prospective LTCI
clients”

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LTCI carriers- Profitability Indices
Ratios- Compared
65.80
78.20
92.90
78.70 75.50
67.40
38.5
20.6 20.2
30.1 31.5
19.8
0.00
20.00
40.00
60.00
80.00
100.00
LTCI carrier
Ratio %
Loss ratio
Expense ratio
Loss ratio 65.80 78.20 92.90 78.70 75.50 67.40
Expense ratio 38.5 20.6 20.2 30.1 31.5 19.8
Genworth
financial
John
Hancock
MetLife CNA corp.
UNUM
corp.
Prudential
LTC
High benefits ratios are the major problem areas of prospective clients
Source – 10-K and 10-Q filings of respective companies -**-margins for the entire company
Median
Median
Carrier Before tax OM After tax OM
Genworth financial 22.00% 4.50%
John Hancock FS N.A 10.00%
MetLife 7.50% 5.00%
CNA group -17.60% -56.20%
UNUM group 18.10% 6.7% **
Prudential LTC 2.78% -6.00%
Operating Margins
Benefit ratios

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Problem Areas- LTCI carriers
LTCI carrier Expense ratio Persistency rate Loss ratio Net premium to
net benefits
LTC growth Future benefits for
LTC
Genworth financial 38.5% in Q1-2009 N.A 65.8% and GBR is
104.3%
1.16 Net income
Stagnant since
2006 inspite of
increase of 27% in
sales
$11.1 bn. 26.7%
increase in
reserves and
benefits
John Hancock FS 20.6% N.A 78.2% 0.84. Benefits
payout increased
16% over 2007
$177.8 mn in 2008.
Q1-09 Sales
dipped by 27%
over Q1 2008
$9.4 bn
MetLife 20.2% N.A 92.9%* from 90.6%
in 2007
1.18 Declined by $7 mn
over 2008
$11.6 bn
CNA group. 30.1% N.A 78.7%(Overall) 1.25 Premiums dropped
from $618 mn to
$612 mn in 2008
$41.6 bn (Overall)
UNUM group. 31.5% 95.5% in 2008
dipped to 95% in
Q1-2009
75.5% in 2008 and
74.2% in Q1-2009
0.94 Sales for
individual and
group have
declined since
2006
$2.9 bn. Reserves
(Incurred) LTCI has
increased 21%
over 2007
Prudential LTC 19.8% 85.6% -Q4’08 from
91.4% - Q1
87.2% - Benefits
ratio 2008
0.94 Increase of 40%
over 2007**
$3.34 bn
Source – 10-k filings *- For non medical health business **- for group disability (All figures for 2008 unless specified otherwise)
These 6 identified carriers have visible pain areas in their LTCI business

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LTCI Problem areas - Takeaways
 Improper pricing assumptions
 Efficiency of underwriting and actuarial support
 Impact of premium rate hike
 High Surrenders, withdrawals
 Competitive pressure
 Product features, sales effectiveness, pricing and consumer feedback
 Long tail of LTC Insurance product
 Actuarial financial projections
• Underwriting and Agent commission expenses
• Policy administration and maintenance expenses
Loss ratio
Expense ratio
Persistency rate
LTC sales
Future reserves
The LTCI carriers face challenges due to high benefit
ratios, loss of sales and inefficient forecasting of
reserves

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Growth strategies - Takeaways
 Focus on combination and group LTCI markets
 Innovation in product design
 Effective utilization of capital
 Enhance ratings
 Effective distributor channels
 High NPS
Expansion
Preferred provider
Capital efficiency
 Expansion of business to new markets
Geographic reach
LTCI carriers look at Innovation, preferred provider status
and capital efficiency as key strategies to grow

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STEP 4: Perform a capability map
Objective:
“Map our capabilities to the problem
areas and growth strategies of the
identified LTCI carriers”
Deliverable:
“Genpact-Capability map”

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 Benefits ratio could be attributed to
 Fraudulent claims
 Cost of claims and claims experience
 Underwriting expenses and effectiveness
 Forecasting and Persistency
 ROI on marketing
 Tax reporting
Business Challenge
Benefit ratios
 Ratio of incurred losses, expenses and loss
adjustment expenses to net premiums earned
***content suppressed***
Genpact Capability
Capability map - Takeaways
 Loss of LTCI sales attributed to
 Segmentation
 Competitive pressure
 Pricing and product design
 Sales force effectiveness
 Customer preference
 Forecasting
Business Challenge
LTC sales
 Annual sales of LTCI products
Genpact Capability

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Capability map - Takeaways
 Executing the growth strategy in
 Expand product lines
 Preferred provider status
 Capital efficiency
 Cut operating expenses
 Brand recognition
 Enhance service standards
Business Challenge
Growth Strategy
 Growth strategies of LTCI carriers
Genpact Capability
 The challenges may be related to
 Predicting persistency
 Future benefits and reserves
 Solvency issues
 Credit ratings
Business Challenge
Other Challenges
 Other challenges that carriers face in their business
Genpact Capability

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LTCI carriers – Capability map
LTCI carrier Expense ratio Persistency rate Loss ratio Net premium to
net benefits
LTC growth Future benefits for
LTC
Genworth financial 38.5% in Q1-2009 GBR is 104.3% Net income
Stagnant since
2006 inspite of
increase of 27% in
sales
$11.1 bn. 26.7%
increase in
reserves and
benefits
John Hancock FS 0.84. Benefits
payout increased
16% over 2007
MetLife 92.9%* from 90.6%
in 2007
CNA corp. 30.1% 78.7%(Overall) Premiums dropped
from $618 mn to
$612 mn in 2008
UNUM corp. 31.5% 75.5% in 2008 and
74.2% in Q1-2009
0.94 Sales for
individual and
group have
declined since
2006
$2.9 bn. Reserves
(Incurred) LTCI has
increased 21%
over 2007
Prudential LTC 0.94
Our capability maps to key pain areas
***content
suppressed***
***content
suppressed***
***content
suppressed***

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STEP 5: Competitive Benchmarking - Genpact
Objective:
“Benchmark Genpact with our
competitors and find out key
strengths, opportunities,
differentiating factors that aid in
the go-to-market plan”
Deliverable:
“Competitive Benchmarking study”

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List of Competitors for Genpact
Competitor Category Competitive Edge
IBM DAKSH*
Technology company
into BPO
1. I.T-BPO Integration
2. Claims Adjudication
3. Nearshoring in
Philippines
EXL SERVICES** Pure play BPO
1. TPA license
2. Nearshoring in
Philippines
WNS HOLDINGS** Pure play BPO
1. Proprietary technology
2. Clinical research and
care management
3. European language
expertise
FIRSTSOURCE* Pure play BPO
1. PIPAL research
leverage
2. IQPC award in quality
excellence
PATNI BPO***
Technology company
into BPO
1. Predictive – Fraud
Analytics
2. S.A and Brazil
operations
Apart from pure play BPO, I.T companies are also our competitors.
*- Players in health insurance **- As per 10k filings of Genpact ***- Patni BPO is a player in LTCI
Competitor criteria
1. Top 15 BPO players in India
2. Direct competitors of
Genpact**
3. Player in Health insurance
field

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Competitive Benchmarking study - Key takeaways
 Grow existing and new clients, promote excellence
 Pursue strategic alliances and enhance global capabilities
 Could be detrimental to business
 Improve on-shore and near-shore capabilities
 I.T-BPO integration and proprietary technology by competitors
 Reduce customer side technological obsolescence
 Strategic M&As propel growth and aids in scalability
 Competitors into M&A in analytics and claims
• Diversify exposure to multiple geographies and across Industries
• Focus on emerging markets (as per CEO statement)
Strategic Focus
Revenues
Legislation
Innovation
M&A
From being a captive, now we have grown to be a forward thinking,
Innovating and the biggest player in BPO Industry

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Genpact Benchmarking study - Key takeaways
 Our competitors into near shoring operations
 We can focus on countries with good GSLI* rank
 Lowest attrition rate among competitors
 Critical to BCP and knowledge retention
 85% from existing clients
 CAGR at 85% from global clients
 Leader in control on personnel expenses compared to our competitors
 Could optimize Further expenses using technology (UC)
• Six sigma, domain capabilities and Virtual Captive Model of operations
• Competitors into TPA license, predictive analytics, Industry partnerships
Near shoring
Differentiators
Attrition
Repeat business
Financial ratios
* - GLOBAL SERVICES LOCATION INDEX – All data from annual filings, websites and press releases
Ownership
 Oak hill capital partners own 36.6% stake in EXL services, our competitor
 Could be detrimental to our business due to one large stakeholder
Genpact is positioned well in the market with low attrition, near shoring abilities, key
differentiators and healthy financials

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SWOT of Genpact - Takeaways
STRENGTHS WEAKNESSES
 G.E DNA with visionary leadership  Reliance on G.E for 47% for revenues (G.E margins are
high compared to global clients**)
 Scalability, end-end process (Six Sigma) and domain
excellence
 Limited experience in pricing and long selling cycle**
 Low employee attrition  Low I.T-BPO integration in services
Strategies for using strengths: Strategies for minimizing weaknesses:
 Project the value proposition in having a robust visionary
leadership, process excellence, low employee turnover and
high knowledge retention to prospective clients
 Focus on global clients, I.T-BPO integration
OPPORTUNITIES THREATS
 Recessionary trends may result in more cost optimization
and room for innovation
 I.T companies into BPO
 Indian BPO services growing at 40%  Threat of Legislation in U.S and India
 Near shoring capabilities in Guatemala and Mexico and
growth of emerging markets (GSLI*)
 Exposure to multiple currencies
 Emergence of electronic health records (for insurance) and
aging of Insurance underwriters in the U.S
 Influence of one major shareholder (Oak hill capital)
Strategies for leveraging opportunities: Strategies for eliminating threats:
 Look into emerging markets that do well in GSLI*
 Strategic M&A given our strong financials
 Enhance I.T expertise in BPO operations
 Move to SEZ as a tax saving measure
**- as per 10k filings-2008 *- Global services location Index Annexure : Click here
Project our competitive strengths, explore upcoming opportunities, mitigate threats and
position ourselves as a BTO

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Go-to-market Plan

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Go-to-Market plan- Genpact
Objective:
“Collate key findings from the
previous steps and suggest a go-to-
market plan for Genpact ”
Deliverable:
“Go-to-Market plan – Genpact with a
business case”

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Go-to-market plan
Objective
To prospect, develop and sustain long term
strategic relationships delivering business
impact throughout the end-end LTCI business
process.
Whom do we sell to?
 Top 10 LTCI carriers in the U.S
 Visible problem areas in their LTCI business
 Companies with strategic focus on capital
efficiency and LTCI growth
How do we sell?
Why do we sell?
• ***suppressed***

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Define the Target customer
Type of companies
Segment and geography
Target audience
Situational factors
Compelling reason to buy
Our target customers are top LTCI carriers and have visible problem areas in
their LTCI business
 TOP LTC Insurance carriers in the U.S
 LTC Insurance (Individual and group)
 Predominantly U.S and U.K
 CXO
 Recessionary trends
 Loss of sales in LTCI and stagnant growth
 High benefit ratios

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Competitor Analysis
Genpact is uniquely placed in the LTCI domain to cater to ever dynamic
client business
 WNS global
 EXL services
 FirstSource
 IBM daksh
 I.T companies into BPO – Eg.Infosys, Patni, Accenture,
TCS
 I.T-BPO Integration
 TPA license for claims adjudication*
 Strategic M&A and partnerships**
*- EXL services has TPA license for claims adjudication in 45 states in the U.S
**- Patni with milliman consultants, EXL with Inductis, Firstsource with Pipal research, WNS with Aviva global
Our major strengths
Our competitors
Competitors strength
Competitive positioning

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 CNA is into the following segments
 Property and casualty
 Life Insurance
 Annuities
 Pension deposit
 Long term care
The Business
The Company
 Continental casualty company, one of the top 5
group LTCI carriers is an arm of CNA Insurance
group (NYSE:CNA). State of domicile is Illinois.
Leows corp owns 90% of common stock as of 2008.
Its employee strength is 9000
 New CEO Thomas Motamed from 2009 has his
focus is on strengthening financial ratings,
enhancing underwriting discipline*
 All states in the U.S
 California, NY, FL, TX, IL, NJ, Pennsylvania and
Missouri contribute 43% of the business
 Operations in Canada, Europe, Argentina, APAC
Geographic reach
Prospective Client – CNA group
 Managing Loss ratio and adverse claims experience
 Dip in LTCI sales
 Managing Expense ratio
 Accuracy of Actuarial assumptions
 Improve Policy persistency
 Maintain and enhance credit ratings – Currently A-
by S&P
 Tackle Competitive pressure
Business Challenges
 Expense management
 Grow group LTCI business
 Develop Industry specific expertise
 Investments in customer service and business
technology
Growth strategies
*-Source - http://www.roughnotes.com/rnmagazine/2009/april09/04p032.htm
 Loss ratio – 78.7%
 Expense ratio – 30.1%
 LTCI new business 2008- $612 mn
 Net loss 2008 - $344 mn
 Operating margins
 Before tax: -17.6%
 After tax: -56.2%
Financial data

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Genpact Value proposition – CNA group
Address What? Why? Leverage Whom? How?
Loss ratio Opportunity to optimize claims
and cost of claims, improve
underwriting and prevent fraud.
About 3% of claims in U.S health
insurance are fraudulent
***content suppressed*** 1. ***content suppressed***
New Business Boost top line growth and explore
new revenue streams
Expense ratio Trim middle line. Optimize
marketing and agent costs and
enhance ROI on marketing
expenses
Underwriting efficiency -
Actuarial
Effective underwriting results in
better pricing, claims experience
and forecasting of policy reserves
*- For hypertension and diabetes
Our value proposition aids in fraud analytics, Underwriting support and control of benefit
ratios

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Genpact Value proposition – CNA group - contd
Address What? Why? Leverage Whom? How?
Policy persistency Opportunity to retain customers
and grow
Product development Penetrate new markets and grow
market share
Distributor efficiency Optimize distributor costs ***content suppressed*** 1. ***content suppressed***
Service Quality Enhance TAT for its customers,
customer retention and
subsequently better positioning in
the LTCI market
Credit ratings To gain Investor confidence and
enhance controllership
Our value proposition addresses reputational and service related risks of CNA group
*- For hypertension and diabetes

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Business Impact for CNA group – Prospective client
Where is the Impact?
Proven Impact for our existing
clients
Result of the Impact for our
existing clients
Solvency ratios - RBC ***content suppressed*** ***content suppressed***
Fraudulent claims ***content suppressed*** ***content suppressed***
End-end LTCI cycle ***content suppressed*** ***content suppressed***
Potential business impact for CNA group with Genpact partnership.

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In Conclusion
 The U.S LTC Insurance industry, with
innovative products and leverage of aging
population is poised to grow in the years to
come. Most of the LTCI carriers battle problem
areas and have a strategic focus to grow in
LTC Insurance products.
 *** content suppressed***
The project was limited to the scope mentioned above because of non availability of time (7 weeks was the time spent),
BFSI sales reports, Marketing strategy of Genpact. The research done was with information made available to me apart
from Internet sources.
This project could be tailored for Individual clients mapping Genpact
capabilities to specific problem areas

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Annexure
No Annexure Name File Go back
1 LTCI Industry snapshot Back
2 LTCI carrier rankings ***suppressed*** Back
3 LTCI carriers-Comparison ***suppressed*** Back
4 Pain areas for identified carriers Back
5 Capability map – Genpact ***suppressed*** Back
6 Competitive benchmark takeaways-
Genpact
***suppressed*** Back
7 Competitive Benchmark report – Genpact Back
8 CNA Group snapshot ***suppressed*** Back
9 Case study – Ingenix ***suppressed*** Back
10 Genpact F&A business Impact ***suppressed*** Back
11 GSLI rankings Back
12 Insurance Factbook 2009 ***suppressed*** Back

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Reference material – Long term care
No Name Source Month and year of publication
1 Basics of LTCI SOA May 2006
2 Cost of care survey – Genworth Genworth March 2007
3 Who buys LTC insurance – A study on demography AHIP April 2007
4 LTC financing options Georgetown univ June 2007
5 Using reverse mortgages to manage risk of LTC SOA April 2004
6 Income, poverty, insurance coverage in the U.S US census bureau August 2007
7 National healthcare expenditure projections SOA 2008
8 LTC industry snapshot New orleans meeting May 2005
9 Understanding the current market of LTCI SPC intl N.A
10 Why is the LTCI industry small? Research paper August 2004
11 2008 group and individual LTCI review LIMRA 2008
12 LTC may be a roadblock for baby boomers Lincoln group June 2008
13 Aging America – Achilles heel Centre for LTC reform September 2005
14 Annual review 2007– combination products LIMRA 2008
15 Combination products – Individual insurance market LIMRA 2008
16 Profiles of LTC and independent living AARP 2009
17 Desirability of LTCI vs self insurance FPA 2006
18 HECM and LTCI Univ of George town 2005
19 Impact of recession on LTCI sales LIMRA 2008
20 Research on Medicaid and uninsured Kaiser 2009
21 LTCI expected to show steady and slow growth Insurance news net 2008
22 National spending on LTC Univ of George town 2007
23 Essential healthcare reform SCAN Dec 2008
24 Current state of LTC market in the U.S Milliman April 2004

37
Reference material – LTC carriers
1 10k of all companies Respective sites 2008
2 10Q filings Respective sites 2008
3 Annual reports Respective sites 2008
4 John hancock intelligence Information John hancock 2008

38
1 2009 outsourcing dangerously Black book of outsourcing 2009
2 PATNI launches life NB STP solution Patni 2005
3 Indias’ top BPO and IT companies D&B 2009
4 Care management and Analytics Patni 2008
5 BPO health insurance services Patni 2008
6 BTO lessons learned Kilpatrick stockton N.A
7 Claims BPO Patni 2008
8 Implementing sourcing to fuel insurance growth WNS 2009
9 Best practices report – HR NASSCOM 2008
10 The global I.T report World economic forum 2009
11 Global sourcing – Analysis of offshoring locations Morgan chambers 2007
12 Offshoring for long term advantage AT kearney 2008
13 Guatemala – Essence of opportunity Govt sources N.A
14 Firstsource acquires medassist First source 2007
15 Next gen offshoring Booz allen hamilton 2007
16 Long term care and technology – Need to be nimble Patni 2007
17 Predictive analytics Patni 2005
18 ITO and BPO – A work of difference Gartner 2005
19 Annual reports, 10K and 10Q filings Respective sites 2008
20 Healthcare case study Firstsource 2008
21 Firstsource wins IQPC awards Firstsource 2007
22 ITES-BPO summit NASSCOM 2007
23 Operational excellence- next frontier in outsourcing Mckinsey 2007
24 The case for transformation Global services media July 2008
Reference material – Competitive benchmarking

39
Contact Information
Salar Bijili
salar.bijili@genpact.com
+91-96544-49412
www.genpact.com
Thank You

Pitch Summer Project Salar Bijili To Siib

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