08s-grp4

123 Main Street Newark, DE 19711 April 22, 2008

Mr. John Smith Director of Market Research ABC Insurance Company 987 Market Street Wilmington, DE 19801

Dear Mr. Smith:

ABC Insurance Company has searched for help in solving their problem of expanding their business beyond older adults to a younger generation. Here at Delaware Business Solutions we have tried to answer your call and produced a proposal of how we can solve your problems.

Enclosed you will find our proposal, which discusses the problem ABC Insurance Company is facing, the objectives and procedure we will take to tackle the problem, and the progress schedule.

If you need clarity of any part of the proposal please contact us, so that we may answer any questions you might have. Thank you for you time. I look forward to hearing from you soon.

Sincerely,

Kate Scagnelli AliShah Jones Jay Silvestri

Enclosure

Delaware Business Solutions Proposal for ABC Insurance Company Proposal Delaware Business Solutions (DBS) proposes to broaden ABC Insurance Company’s clientele to include the younger adult population of people in their 20’s. This will help boost sales and increase profits. Statement of Problem In today’s economy people are cutting back on anything and everything they can, including life insurance. Also, since people are living longer and longer, young adults are not investing in life insurance because they do not see the need or benefits. Objective By understanding your need to increase revenues, we can develop a plan that will make this possible. We will research the advantages for a 20-30 year old to have life insurance and the odds that they will need it. Our goal is to expand ABC’s clientele to include those of the younger population. Procedure 1. We will meet with you to a. discuss your visions and needs b. discuss how we are going to move forward 2. We will survey small numbers of diverse people in their 20’s through verbal questionnaires to a. understand their feeling on life insurance policies. b. learn, through studying your current internet advertisements, what your company can do to appeal to young adults so that they would be willing to invest in a life insurance policy. c. analyze what type of policies they would be interested in. 3. We will research a. the number of fatalities for people between 20 and 30 years of age per year (month and/or week) and the causes of these deaths. b. geographical areas where more people invest in life insurance policies and the reasons for doing so. c. how other life insurance companies are currently marketing towards young people online d. the amount competitors charge for premiums in order to show the lower price you will be able to charge once we are able to increase your clientele e. average cost of funerals f. cost of medical bills that can be a result of hospitalization prior to death. 4. We will analyze the results of our surveys and research. 5. We will present to you a. our suggestion of how you can effectively expand your clientele and increase profits. 6. We will provide you with a full report at the close of this project, which will be May 21, 2008. Record of Service Delaware Business Solutions has successfully provided solutions for over fifty firms in the Delaware area. Our list of clients can be presented at any time upon request. We are experts in the field of business management and marketing. We also have experience in helping businesses expand into new markets. Cost of DBS We will be compensated based on your increase of clientele and revenue. If we do not help you, you will not incur any costs. Schedule Week 1 (April 28th-May 2nd) - initial meeting, collection of data from ABC - analysis ABC’s current situation Week 2 (May 5th- May 9th)- begin surveying individuals in their 20’s -begin research on causes of death in people between the ages of 20 and 30 Week 3 (May 12th-May 16th) - analysis our results Week 4 (May 21st) - presentation to ABC

"In death there are no do-overs, we have to get it right the first time so that we have no regrets later." – I was thinking we could put this on the cover as like a slogan. ABC Insurance Company has hired us, Delaware Business Solutions, in hopes that we could come up with a plan to expand your business beyond older adults to a younger generation. After weeks of research, analyzing, determination, we have answered your call and produced a recommendation of how we can solve this issue.
 * Letter of Transmittal **** - ** In this we need to just state everything that is included in the report.
 * Table of Contents **
 * List of Tables and Figures **
 * Executive Summary **

Enclosed you will find a summary of the results of our research, results of our surveying, a conclusion, and finally, our recommendation. We researched your competitors to see how they market towards a younger generation, in order to expand our knowledge of your industry. Also, we researched the advantages for a 20-30 year old to have life insurance and the odds that they would require it to determine the extent to which we believe young adults need life insurance. The surveying helped us see through young adult’s eyes, their feelings about advertising and life insurance for themselves.

Our recommendation is NEED to insert whatever it is.

Life insurance is put in place to give financial assistance should one have an untimely (or timely) death. Rarely do we know when that day will come and the general public does not often think about the inevitable. Usually those who think about things such as familial security and finances are older adults. Therefore, life insurance policyholders are rarely young adults. This leaves the infrequently accessed market of young adults available for any company able to attract their attention. The purpose of this report is to provide ABC Insurance Company with the information necessary for them to understand the benefits of having younger clients. The propositions in this report come from select research in this field and amongst young adults. ABC Insurance Company wants to increase profits. There is available space for the company to grow and the way by which the company can grow must have little to no barring on the current clients. Revenue for the company has been steady for the past couple of years while the price of staying is business has risen. ABC Insurance Company has found that other insurance companies are significantly raising prices to combat the increasing price for business. Though this is the most efficient and fastest way to increase capital, ABC Insurance Company does not want to cause a considerable increase in the cost of life insurance to their clients. Delaware Business Solutions has found that in order to keep costs low to all clients while still raising company revenue, ABC Insurance Company must take on more clients. The proportion of young adults as compared to older adults holding life insurance policies is small, revealing young adults to be the perfect group to add to current clientele. Through direct communication with young adults between the ages of 20 and 30 and research of ABC Insurance Company as well as some of the leading competitors, Delaware Business Solutions has created some recommendations for building clientele. We propose that ABC Insurance Company become more accessible and visually appealing to young adults. Young adults are attracted to things that are familiar, vivid, and necessary. Included in this report, Delaware Business Solutions will provide research, conclusions to the research, and recommended ways in which ABC Insurance Company can increase clients by attracting younger adults.
 * Introduction

** The things in red have not/can not be researched. If we can’t find information about them then we need to delete those sentences. We also then need to delete them from the proposal. In order to familiarize ourselves with the Life Insurance Industry and try to solve the issue at hand, we conducted a lot of research. First, we looked at how other life insurance companies are currently marketing towards young people online. Also, we found an average amount competitors charge for premiums in order to show the lower price you will be able to charge once we are able to increase your overall clientele. Next, we studied statistics of the number of fatalities for people between 20 and 30 years of age per year and the causes of these deaths. Then we searched for the geographical areas where more people invest in life insurance policies and the reasons for this. Finally, we discovered an average cost of funerals and medical bills that can be a result of hospitalization prior to death. This research will not only give us more knowledge of your industry but will also help us formulate a need for young adults to purchase life insurance. First, we// visited the websites for four popular insurance companies to see how they present themselves visually. We used New York Life, Met Life, Prudential, and AIG. Each site except for MetLife focus on families and older adults through the pictures and text provided on the websites. The colors and abundance of text does not seem to be something for a younger audience. New York Life, though they have larger easier to read text as compared to the other sites, still portrays family type pictures and is lacking eye catching colors, animation or socially familiar aspects. Prudential's site is lacking color and is full of text, with no attraction to younger adults. AIG's pictures that appear on the site are of older adults and families and do not have eye catching colors. It seems to be a site that young adults would not find interest in. MetLife on the other hand has brighter colors, and though there is no animation, there is small amounts of colorful drawings. They also have the socially familiar Snoopy (famous character from Charlie Brown) to assist in catching the attention of prospective and current clients. This site displays more of what we want ABC Insurance Company to incorporate in their future. The other sites we can use as examples of how the majority of insurance companies portray themselves and how we can make ABC Insurance Company different from the rest. //
 * Research Results **

The average amount competitors charge for premiums is $500, if ABC is able to increase their clientele by a significant amount they would be able to lower their premiums throughout the entire company making themselves more appealing compared to other insurance companies. Below you will see two tables showing deaths, percentage of total deaths, and death rates for the ten leading causes of death from the age of twenty to thirty-four, by race and sex. It is important to look at the death statistics of the potential age group that we are trying to gain as customers. It is important in two aspects. The first being when ABC Insurance tries to advertise to potential customers they have to show them that it would be worth their money to invest in life insurance. The second is ABC has to analyze the death rates of this new potential age group so they know what premiums they must charge. The two main causes of death, which would be covered, are accidents and assaults. Because these two causes are covered it be something that we could use as a way to bring new customers.

Rates per 100,000 population in specified group.

Table 1. All races, both sexes, 20–24 years ||  Number  || Percent of Total Deaths || Rate || All causes || 19,715 ||   100.0  ||   94.0  ||  Accidents (unintentional injuries)  || 8,624 ||   43.7  ||   41.1  ||  Assault (homicide)  || 3,153 ||   16.0  ||   15.0  ||  Intentional self-harm (suicide)  || 2,616 ||   13.3  ||   12.5  ||  Malignant neoplasms  || 978 ||   5.0  ||   4.7  ||  Diseases of heart  || 672 ||   3.4  ||   3.2  ||  Congenital malformations, deformations and chromosomal abnormalities  || 226 ||   1.1  ||   1.1  ||  Human immunodeficiency virus (HIV) disease  || 160 ||   0.8  ||   0.8  ||  Cerebrovascular diseases  || 142 ||   0.7  ||   0.7  ||  Pregnancy, childbirth and the puerperium  || 131 ||   0.7  ||   0.6  ||  Influenza and pneumonia  || 118 ||   0.6  ||   0.6  ||  All other causes (residual)  || 2,895 ||   14.7  ||   13.8  || Table 2. All races, both sexes, 25–34 years ||  Number  || Percent of total deaths || Rate || All causes || 40,868 ||   100.0  ||   102.1  ||  Accidents (unintentional injuries)  || 13,032 ||   31.9   ||   32.6  ||  Assault (homicide)  || 5,074  ||   12.4  ||   12.7  ||  Intentional self-harm (suicide)  || 4,495  ||   11.0  ||   11.2  ||  Malignant neoplasms  || 3,633  ||   8.9  ||   9.1  ||  Diseases of heart  || 3,163  ||   7.7  ||   7.9  ||  Congenital malformations, deformations and chromosomal abnormalities  || 420 ||   1.0  ||   1.0  ||  Human immunodeficiency virus (HIV) disease  || 1,468  ||   3.6  ||   3.7  ||  Cerebrovascular diseases  || 567  ||   1.4  ||   1.4  ||  Pregnancy, childbirth and the puerperium  || 131 ||   0.7  ||   0.6  ||  Diabetes mellitus  || 599 ||   1.5  ||   1.5  ||  Septicemia  || 328 ||   0.8  ||   0.8  ||  All other causes (residual)  || 8,089  ||   19.8  ||   20.2  ||

geographical areas where more people invest in life insurance policies and the reasons for this. When researching the costs of funerals we found that according to the most recent statistics from the National Funeral Directors Association, the average cost of an adult funeral in 1996, excluding outer burial container, cemetery, marker, engraving, cash advance items such as flowers or obituaries was $4,782. Ten years later, in 2006, the average adult funeral cost was $6,195. That is a $1,413 increase in ten years which equates to a $141.30 per year increase in the cost of an adult funeral. To clarify the items typically included in the cost of an adult funeral are basic services fee, embalming, other preparation of the body, hearse, removal/transfer of remains to funeral home (from place of death), use of the facilities, equipment and staff for the viewing and ceremony at the funeral home, basic memorial stationary package and a metal casket.

In 2006, the average retail price for a casket was $2,263. The average retail cost of a burial vault was $1,242. Caskets and outer burial containers (vault or grave-liners) can both influence cost. Caskets generally range in price from $600 – $10,000 and higher based on quality, material type (wood, steel, stainless-steel, copper, bronze, etc.), features, and warranty. Outer burial containers generally start at $600 and can go much higher based once again on material type, material thickness, concrete or steel, sealing or non-sealing, warranty, lined or unlined, etc.

Finally, the cost of funerals varies regionally. The South Atlantic Region which includes Delaware, Maryland, Virginia, West Virginia, North Carolina, South Carolina, and Florida, is ranked third in the nation boasting the lowest cost for funerals on average. The cost of medical bills varies depending on health insurance coverage location, but we found that in general, in 2007, total health care spending in the United States was $2.3 trillion, or $7600 per person. U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.2 trillion by 2016. In 2007, employer health insurance premiums increased by 6.1%. The annual premium for an employer health plan covering a family of four averaged nearly $12,100. The annual premium for single coverage averaged over $4,400. Although nearly 47 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens. Health insurance expenses are the fastest growing cost.

With the 2008 Presidential elections rapidly approaching, rising health care costs is the top personal financial concern for Democratic voters (45%) and Republicans (35%), well ahead of higher taxes or retirement security.

One in four Americans say their family has had a problem paying for medical care during the past year, up 7% in the past nine years. Nearly 30% say someone in their family has delayed medical care in the past year, a new high based on recent polling. Most say the medical condition was at least somewhat serious. A recent study by Harvard University researchers found that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68% of those who filed for bankruptcy had health insurance. In addition, the study found that 50% of all bankruptcy filings were partly the result of medical expenses. Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem. One half of workers in the lowest-compensation jobs and one-half of workers in mid range-compensation jobs either had problems with medical bills in a 12-month period or were paying off accrued debt. One-quarter of workers in higher-compensated positions also reported problems with medical bills or were paying off accrued debt. We need a conclusion to this section…. We need to talk about how this research has helped us.

Here I think we should insert graphs and then write a short summary (maybe one paragraph) of the results and how they are going to help us. code After interviewing 12 (thats all I had access to) people between 20-30, I found that code code familiarity, wierd and obscure things and purpose were the main things that draw them to code code ads and make them want a product/service. code code So basicly if they hear a familar song, see a familar face or something really out of the code code ordianry associated with a product or service, they are likely to pay attention and code code consider the product/service. Also if the service is something that they can be convinced code code is worth while to them, they will consider it also. – AliShah’s results. code code code code I (Kate) interviewed 15 people: code code code code 1.           a. Newspaper ads - 1 code code b. Magazine ads - 2 code code c. Commercials - 12 code code d. Billboards – 0 code code code code 2. When you look at advertisements, what is the first thing that catches your attention? code code Most people said either something out of the ordinary or a famous person. 1 person said while watching tv if a commercial comes on that is either really loud or really quiet than that will grab their attention. One of the people who said magazine said it usually something with bright colors. code code code code 3. What must an advertisement have to keep your attention? code code Most common answers: code code - can’t be too long code code - must be funny or exciting code code - must have action code code code code 4. At this time in your life, are you concerned with how your family will manage should you have an untimely death? code Everyone said that they really hadn’t thought about it…but once they did they said yes. code a. If this has not yet been one of your concerns, what everyday things would make it a concern? code Most common answers: -If I suddenly got sick -If someone else in my family or close to me passed or got very ill. code 5. Do you have life insurance? code code All said no. code code code code a. If so, did you obtain it on your own or through you employer? code code code code code code b. If through your employer, do you believe it is necessary to obtain code code additional life insurance on your own? code 6. Do you feel that life insurance is necessary for you at this time? Most common answers: - no, because I’m not supporting anyone. - no, because I have health insurance and my family would be able to afford a funeral if anything did happen to me  Only one person said yes, and it was because she is pregnant. ** Conclusion and Recommendation ** 1. http://www.planningfortomorrow.net/2008/03/analyzing-cost-of-funeral.html Sunday, March 23, 2008 "Analyzing The Cost of a Funeral" Posted by Fred H. Kitchen, CFSP
 * Survey Results **
 * References **

2. Poisal, J.A., et al, Health Spending Projections Through 2016: Modest Changes Obscure Part D’s Impact. Health Affairs (21 February 2007): W242-253.

3. The Henry J. Kaiser Family Foundation. Employee Health Benefits: 2007 Annual Survey. 11 September 2006. http://www.kff.org/insurance/7672/index.cfm

4. California Health Care Foundation. Health Care Costs 101 — 2005. 02 March 2005.http://www.chcf.org/

5. Heron, Melonie. "Deaths: Leading Causes for 2004." National Vital Statistics Reports Volume 56, Number 520 Novermber 2007 19-20. 8 May 2008 .

6. "Average Insurance Costs." CompuQuotes. 16 May 2008 .

7. http://www.nchc.org/facts/cost.shtml © 2008 National Coalition on Health Care. All rights reserved code 1. What kinds of advertisements most appeal to you? (Circle one) code code a. Newspaper ads code code b. Magazine ads code code c. Commercials code code d. Billboards code code code code 2. When you look at advertisements, what is the first thing that catches your attention? code code code code code code code code 3. What must an advertisement have to keep your attention? code code code code code code code code 4. At this time in your life, are you concerned with how your family will manage should you have an untimely death? code code code code code code a. If this has not yet been one of your concerns, what everyday things would make it a concern? code code code code code code code code 5. Do you have life insurance? code code code code a. If so, did you obtain it on your own or through you employer? code code code code code code b. If through your employer, do you believe it is necessary to obtain code code additional life insurance on your own? code code code code code code code code 6. Do you feel that life insurance is necessary for you at this time? code
 * Appendix 1. Survey **