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Prudential’s Group Insurance Key Account Program

United Parcel Service

Group Insurance Executive Sponsor: Michelle Crecca

Group Insurance Relationship Manager: Jessica Gillespie and Carlina Torres

GI Account Team: Jason Hall (Account Executive) and Karen Guntor (Account Manager)

SSG Key Account Relationship Manager: Kathy Sayko

Enterprise Account Team: Amy Price (Retirement), Bill Evans (Retirement), Jim Murphy (PREI), Joe Carrabes (Jenn),

Peter Taggart (PFI)

Client Contact: Amy Nations

Relationship Length: 12/1/2009

Renewal: 1/1/2016

Last Meeting Date: 5/15/2014

Upcoming Meeting Date: TBD

Control Number: 76536

Website: www.ups.com

http://www.google.com/url?url=http://logos.wikia.com/wiki/File:UPS_logo_2003.png&rct=j&frm=1&q=&esrc=s&sa=U&ei=cyvaVLyuK4WeNvWOgYgC&ved=0CCAQ9QEwBQ&usg=AFQjCNHsN53z2tbWr-jVJQTGU8gD7DHScg


Current Premium with Prudential’s Group Insurance

Premium as of 4th Qtr 2014

Coverage # of Lives Annualized Premium 2012 ALR 2013 ALR 2014 ALR 2014 ELR

Basic Life

7,718,094.72 84.52% 83.86% 94.00% 91.91%

Optional Life

32,822,421.92 84.52% 83.86% 94.00% 91.91%

Total 102,359 40,540,516.64

Coverage Information

Coverage Carrier Renewal Date Additional Information

Basic Term Life Prudential 1/1/16 Optional Life Prudential 1/1/16 Dependent Life Prudential 1/1/16 Retiree Life Prudential 1/1/16 GUL/GVUL Prudential 1/1/16 Travel

AD&D Prudential 1/1/16 VAD&D Prudential 1/1/16 Accident

Critical Illness STD Insured ASO/ATP STD Statutory STD LTD Insured ASO/ATP LTD LTC MetLife

NLTCC – National Long Term Care Coaltion

Absence FMLA


Consultant

Consultant Contact Name Contact Information

Alliant Tom Greene 404-784-3791,

[email protected]

TPA

TPA Contact Name Contact Information

AonHewitt Patti Schmidt

770-243-3367 [email protected]

Key Decision Makers

Name Title Contact Information

David Abney CEO

Abney succeeded Scott Davis on September 1, 2014, as part of an orderly transition in which Davis retired as CEO but retained the role of non-executive chairman.

Teri Plummer McClure Chief Legal Officer and Sr. Vice President, Human Resources

and Employee Communications

Bryan Brum Attorney-Employee Benefits


BJ Dorfman Benefit Manager


Amy Nations Healthcare Appeals Corporate Benefits

404-828-4383, [email protected]

Donna Morrison Health Care Manager


mailto:[email protected]

mailto:[email protected]


Company Overview

UPS is headquartered in Atlanta, Georgia. Founded in 1907 as a messenger company in Seattle, Wa United States, UPS has grown into a multi-billion-dollar

corporation by clearly focusing on the goal of enabling commerce around the globe. As the world’s largest package delivery company and a leading global

provider of specialized transportation and logistics services, UPS continues to develop the frontiers of logistics, supply chain management, and e-commerce;

combining the flows of goods, information, and funds. UPS has 318,000 U.S. employees and 395,100 employees worldwide (77,000 International). Their 2013

revenue $55.4B.

NYSE: UPS

Package Operations 2013 Revenue: $46.5 billion 2013 Delivery Volume: 4.3 billion packages and documents Daily Delivery Volume: 16.9 million packages and documents Daily U.S. Air Volume: 2.3 million packages and documents Daily International Volume: 2.5 million packages and documents Service Area: More than 220 countries and territories; Every address in North America and Europe Customers: 9.4 million daily (1.5 million pick-up, 7.9 million delivery) Online Tracking: Average 47.5 million daily tracking requests Retail Access: The UPS Store®, 4,800, includes 1 Mail Boxes Etc.; UPS Customer Centers, 1,500; Authorized outlets, 11,400; UPS Drop Boxes, 39,000; Kiala / UPS Access Points, 11,300 Operating Facilities: 1,990


Delivery Fleet: 96,361 package cars, vans, tractors, motorcycles, including 3,152 alternative-fuel and technology vehicles UPS Jet Aircraft Fleet: 237 Chartered Aircraft: 388 Daily Flight Segments: Domestic - 940; International - 1, 015 Airports Served: Domestic - 382; International - 346 Air Hubs: United States: Louisville, KY (Main Global Air Hub); Philadelphia, PA; Dallas, TX; Ontario, CA; Rockford, IL; Columbia, SC Europe: Cologne/Bonn, Germany Asia Pacific: Shanghai; Shenzhen; Hong Kong Latin America and Caribbean: Miami, FL, USA Canada: Hamilton, Ontario

Supply Chain and Freight 2013 Net Revenue: $8.9 billion

UPS Supply Chain Solutions Key Services: Logistics and distribution; transportation and freight (air, sea, ground, rail); freight forwarding to 195 countries; international trade management, and customs brokerage. Specialty Services: Service parts logistics; technical repair and configuration; supply chain design and planning; returns management. Facilities: 528 facilities in more than 120 countries; 30.9 million sq. ft. Delivery fleet: 519

UPS Freight Key services: Leading provider of less-than-truckload services coast to coast. Delivery fleet: 5,759 vehicles; 19,391 trailers


Facilities: 213 service centers

Recent News

January 23, 2015 (Dow Jones Newswires) UPS Warns Of Disappointing Results United Parcel Service, Inc. warned of disappointing fourth-quarter and full-year results, as higher-than-expected seasonal expenses and currency headwinds dragged down earnings. Chief Executive David Abney called the fourth-quarter results "disappointing" and said the company plans to reduce operating costs and implement new pricing strategies. December 18, 2014 (Dow Jones Newswires) UPS Agrees To Terms With ORTIE To Acquire Polish Healthcare Logistics Company Poltraf UPS today announced it has agreed to terms with Poland-based investment fund ORTIE to acquire its pharmaceutical logistics company Poltraf Sp. z o.o. The acquisition will further strengthen UPS's healthcare expertise and network in Europe, enabling compliant logistics services to customers for streamlining their product supply to the fast-growing healthcare markets of Central and Eastern Europe. UPS expects to complete the transaction in the first half of 2015, subject to customary closing conditions. Terms of the deal are not being disclosed. December 4, 2014 (New York Times) UPS Suit Hinges On An Ambiguous Pregnancy Law A Supreme Court argument on Wednesday in a pregnancy discrimination case against United Parcel Service had, for the most part, the arid quality of a logic problem, with the justices wrestling with an ambiguous federal law. November 14, 2014 (Wall Street Journal) UPS Sets Ambitious Targets For Profit Growth United Parcel Service Inc. executives laid out the company's five-year plan on Thursday, highlighting aggressive cost-cutting measures, as well as ambitious growth targets. The company is targeting earnings-per-share growth of more than 50% over the period to between $7.62 and $9.12 in 2019. It expects profit this year of $4.90 to $5 a share. The century-old delivery giant is setting a high bar for itself. In the past two years, its earnings per share have grown less than 5%. Home delivery of e-commerce purchases has been a drag on its profitability in the U.S. October 24, 2014 (Atlanta Business Chronicle) UPS Q3 Profit Jumps 10.7% United Parcel Service Inc. (NYSE: UPS). The Atlanta-based package shipper and logistics company reported its third-quarter profit jumped nearly 11 percent and it expects holiday shipments to climb 11 percent. October 22, 2014 (Baltimore Business) Journal UPS To Raise Rates In 2015


United Parcel Service will raise rates an average 4.9 percent Dec. 29 across its ground, air, international and freight services within and between the U.S., Canada and Puerto Rico. The company raised rates an average 4.9 percent this year as well.

Client Meeting Schedule

The meetings between Prudential and UPS are facilitated twice a year. Any additional meetings needed are arranged upon request.

SWOT ANALYSIS

STRENGTHS:

For the previous twelve years, Prudential has had an extremely solid relationship with Dee Fennell at UPS. This is one of the primary reasons we

have currently kept this business intact. We have also been successful integrating with Hewitt, their TPA. Unfortunately, Dee is no longer

employed at UPS as of 2015. Working in our favor is that the basic life for a big chunk of the unions moved to the teamsters on 6/1/14. This

should hopefully improve the overall loss ratio going forward.

WEAKNESS:

Dee was replaced by Amy Nations. The good news is that we have built a strong relationship with Amy. The bad news is that she is posting out

for other positions at UPS. Alliant has not had the best Pru relationship in the recent past. Al Rapp retired as benefit manager at the end of

2014. He has been replaced by BJ Dorfman. BJ’s previous role was as union negotiator.

OPPORTUNITIES:

We have quoted for UPS’s Disability business, and for their union LTD insureds. We were not successful. We will need to make sure that we are

able to customize their program sufficiently to meet their specific needs.

THREATS:


UPS is extremely cost-conscious. We are using the approach of growing our Optional Life Insurance business to mitigate poor past financial

experiences with this account.

Additional Case Comments

During the current difficult financial times, UPS is focusing on cost reduction in all areas of their business, including employee benefits.

Specifically, they are working to develop early retirement programs to help cut their benefit cost exposure.

Meeting Notes

Meeting Date Client Attendees Pru Attendees Meeting Type Discussion Details Notes Follow-Up Needed?

5/15/2014 Amy Nations Karen Guntor Other Corporate Health Fair for Non-union Employees

Karen met and worked with Amy at the annual UPS Corporate Benefit Fair at the UPS Corporate Headquarters location to meet with Employees to discuss and answer questions about their life coverages with Prudential. The turn out was very good with an estimated 300 employees.

No

12/17/2013 Karen Guntor Leander Tangsing Client Service Meeting Group Life Claims Update - Service Call

Karen Guntor took Leander Tangsing from Group Life Claims to lunch with Amy and Patti for a Group Life Claim update and service call. We discussed their bene designation set-up and also a billing issue where UPS is remitting premium for L2727 at the wrong rate and that an adjustment is required. Patti acknowledged that they were

Yes


working on this on their end and Amy asked to be kept informed.

7/16/2013 Amy Nations Karen Guntor Enrollment Marketing & Enrollment Campaing

Karen Guntor called Amy Nations to talk about whether they would agree to a marketing and enrollment campaign for the Flexible Benefits Plan this year since the campaign last year was successful. Due to the plethera of changes with the majority of the bargaining plans moving to the teamsters once the contracts are ratified, they do not want to embark upon another campaign at this time. UPS will be sending out a tremendous amount of mailers and communications this year and they do not want to add any additional information. Amy said that they would be interested in another campaign next year. Also, enrollment kits for each plan will be ordered and shipped once Amy can confirm the quantity that is needed.

Yes

5/17/2013 Al Rapp, Donna Morrison, Amy Nations

Jimmie Pogue, Jason Hall, Karen Guntor

Year End Review 2012 Year End Meeting Met with UPS to introduce their new Prudential Executive Sponsor, Jim Pogue and to present/review the 2012 year end results. We had the opportunity to talk about the results of the marketing and enrollment

No


campaign that was done during annual enrollment for the non-union Flex plan, their change to on line web claim submissions, the conversion from the IMAC to Compass billing system, their updated and revised enrollment kits and the various admin error reviews from the past year. We also sited the success of the marketing campaign for the non-union Flex plan and used it as an opportunity to ask them to considered another campaign this year. We talked about Critical Illness and they spoke about their current product with MetLife and their recent effort to inform and educate their employees about this product. They were disappointed in the lack of response about it by their employees. We also reviewed the Seventh Annual EE Benefits Study, updated them about our new and innovative digital employees communications, the Life Needs Estimator (they have one on their intranet site created by Aon Hewitt) and we gave them access to the E-Resource Center and Benchmarking Tool.

5/16/2013 Amy Nations Karen Guntor Other Corporate Health Fair Karen Guntor attended the Annual Corporate Health Fair

No


for the non-union Flexibile Benefits employees. Pru had a table with customized enrollment kits, flyers, a rolling table top power point presentation and giveaways. Amy manned the table too and we spoke with approximately 100 to 150 employees that stopped by.

4/10/2013 Amy Nations Karen Guntor Other Rate Conversion for Compass UPS agreed to a rate conversion for the Employer Paid Non-Union Dep Life rate from a per ee rate to per $1,000 for the Compass conversion. This, due to a rounding issue in Compass as the system cannot round to three decimal points.

Yes

4/9/2013 Amy Nations Jason Hall, Karen Guntor

Year End Review Year End Meeting Amy at UPS confirmed their availability for a Year End meeting and the opportunity to meet their Executive Sponsor on either 5/13/2013 or 5/17/2013. AM to confirm and schedule.

Yes

4/3/2013 Amy Nations Karen Guntor Other Various, see below. AM had schedule call with Amy a UPS to review current and ongoing status of various items including a rate conversion for the Employer Paid Dependent Life rate for the non-union group to a per $1,000 rate rather than a per employee rate. Prudential requested this rate conversion due to converting this case to Compass which cannot bill at the per

Yes


employee rate to 3 decimal points. Compass would require rounding. Reviewed the billing/remittance process for UPS once the APA funds they are using to subsidize the dep rates until they are exhausted. Gave Amy both the old (contribution) and new (contract) rates to calculate the difference. Annual Audit/Financial Validation refresher that in July of each year, Prudential validates the volume reported on the billing statements are in line with census data with RKS. Discussed the Compass conversion and the time line for completion, reinstatement language clarification to update contract and plan documents, scheduling a year end review meeting and introducing the Executive Sponser. Jim Pogue, a review of how the International Employee group is updated each year and also when it's time to get the LETS member update after their year end reviews and salary increases.

2/27/2013 Amy Nations Karen Guntor Other APA Monies An email confirmation with Amy states the following: Effective 1/1/2013 for the Local 2727 Contrib Life Benefit Package, UPS decided to use the balance of

No


the APA funds to subsidize the Local 2727 Dep Life Rates until they fun out. Pru agreed to accept the contribution rate through 10/31/2013, then bill (report as due) UPS for the balance due to the contract rates until this union reverts back to the contract rates for contributions. UPS confirmed that the contract expires 11/1/2013 and that UPS cannot confirm when the new contract will be ratified or that dependent uion contract rates will revert back. Also, the case structure is changed to add this bill group.

1/1/2013 Amy Nations Karen Guntor Enrollment Enrollment Campaign Results 2013 Enrollment Campaign Analysis received from Amy for the non-union group (Flex) showing a 19% headcount increase in OGL activity and a 66% headcount increase in OADD activity compared to the 2012 enrollment activity.

Yes

7/10/2012 Amy Nations Karen Guntor, Thomas Gesualdi, Sherry Higgins

Enrollment Marketing & Enrollment Campaign

Weekly conference call to work through the upcoming marketing and enrollment event for the non-union plan.

Yes

6/22/2012 Amy Nations Karen Guntor, Thomas Gesualdi, Sherry Higgins


Weekly conference call working through marketing and enrollment plan for the non-union plan.

Yes

6/1/2012 Amy Nations Karen Guntor, Thomas Gesualdi,


Had marketing and enrollment campaign kick-off

Yes


Sherry Higgins call to develop the strategy for the upcoming enrollment event for the non-union plan.

5/17/2012 Dee Fennell Karen Guntor

Client Service Meeting Annual Corporate Wellness Vendor Fair

Met with Dee at the UPS Corporate office to observe the set-up for the annual corporate wellness vendor fail. We will attend the corporate annual benefit fair in October. Also, reviewed the Schedule of Plans Amendment to the Contract for updates that Dee requested. Discussed life claim web submissions since we will not be implementing the weekly EDI death claim file submission. Set-up a call with UPS and AonHewitt to go through the web submission process and demo for their further consideration.

No

5/8/2012 Al Rapp, Donna Morrison, Amy Nations from UPS and Tom Greene and Amanda Kayatt from Alliant.

Karen Guntor, Danielle Rainone, Jason Hall, Thomas Gesualdi

Other Presentation and introduction of Prudential Marketing Communications Campaign

Prior to Marketing Communications Campaign discussion, a historical review of the APA was covered for the benefit of those who had not had prior familiarity with this funding device. It was confirmed that there will be no plan changes, but UPS is very interested and receptive to accepting Prudential's predominant involvement and assistance with educating their employees and to heighten their awareness of

Yes


their life insurances needs and opportunities. There was an open dialogue of ideas and and with suggestions about how to develop and how to proceed with the appropriate campaign for UPS. There were take aways to get the plan started. The first kick-off with UPS is scheduled for 5/16.

3/19/2012 Dee Fennell and Amy Nations

Jason Hall, Karen Guntor

Re-Enrollment,Other Marketing and Enrollment Campaign

Met with Dee and Amy to present the Marketing and Enrollment Campaign and the new SPLASH page with needs calculator in anticipation of marketing and implementing the proposed plan changes for the non-union optional life plan that were discussed with their acceptance of Prudential's renewal offer for 3 years. Also, met Amy Nations the new UPS contact that will be replacing Dee and who will be working with Prudential in the future.

Yes

1/19/2012 Al Rapp, Dee Fennell, BJ Dorfman, Donna Morrison, Bryan Brum, Stephen Hearn and Alliant, Tom Greene, Emily McGhee and Amanda Kayatt

Jason Hall, Karen Guntor, Mary Rose, Carol Taggart

Renewal Meeting Renewal Presentation Underwriters, Mary Rose and Carol Taggart joined Jason Hall and Karen Guntor to present the renewal and offer a continuation of rates for one year subject to some required actions. Renewal was also presented with some recommended actions. Amanda Kayatt has been

Yes


communicating with Mary Rose requesting a few confirmations and clarifications. Mary is reviewing with Tim Eaton and will have additional information for Amanda on 1/26/2012.

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