Merrill Lynch Insurance Company

Group 7

COMPANY OVERVIEW Merrill Lynch & Co., Inc. is a global financial

services firm owned by Bank of America now known as Bank of America Merrill Lynch.

MERRILL LYNCH INSURANCE Bank of America agreed to sell Merrill Lynch

Life Insurance Company and ML Life Insurance Company of New York (together “Merrill Lynch Insurance Group” or “MLIG”) to AEGON for $1.3 billion

Take Over AEGON (AEX: AGN/NYSE: AEG) and Merrill Lynch (NYSE: MER) announced on 31st December they have finalized their agreement to form a strategic business relationship in the areas of insurance and investment products. AEGON USA, Inc. also completed the acquisition of Merrill Lynch Life Insurance Company and ML Life Insurance Company of New York for U.S. $1.25 billion in cash. The purchase price includes excess surplus of approximately $425 million.

COMPANY INFORMATION

 Revenue -▼ US$ 62.675 Billion  Operating income -▼ US$ -12.831 Billion  Net income -▼ US$ -7.777 Billion  Total assets -▲ US$ 1.020 Trillion  Total equity -▼ US$ 31.932 Billion  Sales-▼:2008-US$33.4 million  Employees :-2007-60,000

2008-9,700  Parent -Bank of America  Website -www.ml.com

Insurance Companies suffering from losses Merrill Lynch, which has been taken over by

Bank of America, today reported a record loss of $15.31bn for the fourth quarter, while Citigroup posted an $8.29bn loss.

Bank of America Corp. reported a fourth-

quarter loss of $1.79 billion and went on the offensive to answer critics and shore up support for the giant Charlotte, N.C., lender during a time of crisis

Aviva posts £747-mn profit in the first half of

Prudential Financial, Inc. Announces Second

Quarter 2009 Results; Net income of Financial Services Businesses attributable to Prudential Financial, Inc. of $538 million, or $1.25 per Common share State Farm: $6.3B P/C Underwriting Loss, $2.1B Operating Loss in 2008 MetLife announced a net loss of $1.4bn for the second quarter of 2009, compared with a second quarter net profit of $915m in the second quarter of 2008. Conclusion : Merill Lynch is one of the largest loss making insurance companies listed in the Fortune 500 Companies of 2009.

Forward Looking Statements Changes in general economic conditions, particularly in

the United States, the Netherlands and the United Kingdom.

Changes in the performance of financial markets,

including emerging markets.

The frequency and severity of insured loss events. Changes affecting mortality, morbidity and other

factors that may affect the profitability of our insurance products.

Changes affecting interest rate levels and continuing

low interest rate levels and rapidly changing interest rate levels.

 Acts of God, acts of terrorism, acts of war and

pandemics;

 Changes in the policies of central banks and/or

governments;

 Litigation or regulatory action that could require us to pay

significant damages or change the way we do business;

 Customer responsiveness to both new products and

distribution channels;

 Competitive, legal, regulatory, or tax changes that affect the

distribution cost of or demand for our products;

 Our failure to achieve anticipated levels of earnings or

operational efficiencies as well as other cost saving initiatives;

 The impact on our reported financial results and financial

condition as a result of our adoption of International

THE CAUSE OF WORRY   In January 2008 quarter report and April 2008

quarter report it was heavy loss of 9.83,1.97 billion $. Merrill responded to its losses by raising capital through the sale of preferred shares; however experts suggest that such a strategy may pose a risk to the company's credit rating which could cause an increase to the company's borrowing costs. On January 2009 john Thain (then CEO) also resigned from the company because just prior to the acquisition of Bank of America he had rushed to pay bonus to the employee but he allegedly did not disclose it while the negotiation with the bank.

Thain was also named as a co-defendant in a

class-action lawsuit filed by shareholders against Bank of America and Merrill Lynch. The global turndown has affected each and every division of the company to the worst. As a result it has also affected the insurance subsidiary in all of its units throughout the world. The worst hit insurance area is the life insurance area. Small competitors gaining a niche and taking the market share and emerging threat with their innovative insurance policies.  

Blueprint

Turn around Strategies Re-insurance of policies having high risks Tie ups with Educational and Corporate

Institutions for Group Insurance policies Motivate employees to sell more policies. As larger the number of policies, the less the probability of risk. Incentives to staff to perform well Promise more benefits to the existing shareholders, so there will be less chances of policy withdrawals

Diversify to General Insurance Tie up with Consumer durable and Automobile

Industries in order to get more policies. Extending the Insurance period with the same premium amount for General Insurances Having stalls in Exhibitions Seminars, which will create awareness about the benefits of having Insurance policies Introducing Customer friendly schemes Relying on Customer Retention Programs

Conclusion Merill Lynch can revive its policies and can

get back to track. All it has to do is to infuse fresh ideas into the business and look customers from a different angle. By adopting the above mentioned strategies, the company can come up with flying colors. All it needs to do is to focus on customer retention plans and derive strategies so as that the policy holder are delighted with the service and gets to more number of customers.