<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 22, 1999
ReliaStar Financial Corp.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-10640 41-1620373
(State of Incorporation) (Commission file number) (I.R.S. Employer Identification No.)
</TABLE>
20 Washington Avenue South
Minneapolis, Minnesota 55401
(Address of principal executive offices) (Zip Code)
(612) 372-5432
(Registrant's telephone number)
================================================================================
<PAGE>
Item 5. Regular Analysts Meeting
------------------------
On September 22, 1999, ReliaStar Financial Corp. conducted a regularly
scheduled on-site meeting with securities analysts. A summary of material
distributed to those who attended the meeting is filed as an exhibit to, and
incorporated by reference in, this report.
Item 7. Financial Statements and Exhibits.
---------------------------------
Exhibit
99. Summary of ReliaStar Financial Corp. September 22, 1999 Analysts'
Briefing Book.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RELIASTAR FINANCIAL CORP.
Date: September 22, 1999 By: /s/ Richard R. Crowl
----------------------------------------
Richard R. Crowl, Senior Vice President,
General Counsel, and Secretary
<PAGE>
Looking Ahead: ReliaStar in 2000
Onsite Analyst Meeting [SUMMARY]
September 21-22, 1999
Minneapolis, MN
[PICTURE OF RELIASTAR LOGO APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
Introduction
1 RELIASTAR
================================================================================
- --------------------------------------------------------------------------------
Forward Looking Statements
- --------------------------------------------------------------------------------
All statements contained in this report relative to markets for the Company's
products and trends in the Company's operations or financial results, as well
as other statements including words such as "anticipate," "believe,"
"expect," and other similar expressions, constitute forward-looking
statements under the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause actual results to be
materially different from those contemplated by the forward-looking
statements. Such factors include, among other things: general economic
conditions and other factors, including market receptiveness to new products,
prevailing interest rate levels and stock market performance, which may
affect the Company's ability to sell its products, the market value of the
Company's investments and the lapse rate and profitability of the Company's
policies; the Company's ability to achieve anticipated levels of operating
efficiencies; mortality and morbidity; changes in federal income tax laws
that may affect the relative tax advantages of some of the Company's
products; and regulatory changes or actions, including those relating to
regulation of financial services affecting bank sales and underwriting of
insurance products and regulation of the sale, underwriting and pricing of
insurance products.
2 RELIASTAR
================================================================================
Page 1
<PAGE>
- --------------------------------------------------------------------------------
"Looking Ahead to 2000"
3 RELIASTAR
================================================================================
- --------------------------------------------------------------------------------
Presentation Overview
- --------------------------------------------------------------------------------
. Forces shaping our competitive environment
. How ReliaStar will capitalize on opportunity
4 RELIASTAR
================================================================================
Page 2
<PAGE>
- --------------------------------------------------------------------------------
Competitive Environment
- --------------------------------------------------------------------------------
Forces Driving Continued Growth
. Push for seamless financial services industry
. Continuing consolidation
. Increasing demutualizations
. Attractive demographics
5 RELIASTAR
================================================================================
- --------------------------------------------------------------------------------
Competitive Environment
- --------------------------------------------------------------------------------
Regulatory Changes: Financial Services Reform
. Outcome of reform legislation uncertain
. Personal involvement in process since `95
. First priority is a level playing field
. Bank alliance only one avenue for growth
6 RELIASTAR
================================================================================
Page 3
<PAGE>
- --------------------------------------------------------------------------------
Competitive Environment
- --------------------------------------------------------------------------------
Scale: It's More Than Size
. Consolidation slowing but still a force
. Behemoths setting pricing standards
. ReliaStar addressing scale issues by...
- Reducing unit costs
- Doing targeted acquisitions
- Delivering value beyond pricing
7 RELIASTAR
================================================================================
- --------------------------------------------------------------------------------
Competitive Environment
- --------------------------------------------------------------------------------
Trend Toward Demutualization
. Access to capital to fuel growth
. Increase competition for investors' $$
. Forced to compete on same terms
. Cultural challenge for mutual companies
8 RELIASTAR
================================================================================
Page 4
<PAGE>
- --------------------------------------------------------------------------------
Competitive Environment
- --------------------------------------------------------------------------------
Consumer Trends
. Accumulating wealth for retirement
. Intergenerational transfer of wealth
. Estate planning needs
. Long-term care needs
. Hunger for information
. Role of Internet
9 RELIASTAR
================================================================================
- --------------------------------------------------------------------------------
Capitalizing on Opportunity
- --------------------------------------------------------------------------------
Industry Organizations Responding
. ACLI promoting awareness of...
- Tax advantages of products
- Importance of protection products
- Benefits of income you can't outlive
. LIFE reinforcing value of life insurance
- Ad campaign creating awareness
10 RELIASTAR
================================================================================
Page 5
<PAGE>
- --------------------------------------------------------------------------------
Capitalizing on Opportunity
- --------------------------------------------------------------------------------
[FOLLOWING SLIDES DESCRIBE HOW RELIASTAR IS SEEKING TO GROW]
================================================================================
Page 6
<PAGE>
- --------------------------------------------------------------------------------
Individual Product
Markets
RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1999 Operating Earnings
- --------------------------------------------------------------------------------
(Percent Contribution)
----------------------------------------------------
Personal Financial Services 36%
Tax-Sheltered and Fixed Annuities 26
----------------------------------------------------
Worksite Financial Services 21
Reinsurance 14
Other Business Units 3
--
Total 100%
Note: Based on insurance product and financial services operating results,
before special charges, for the 12 months ended June 30, 1999
2 RELIASTAR
- --------------------------------------------------------------------------------
Page 1
<PAGE>
- --------------------------------------------------------------------------------
PFS: ReliaStar Individual Insurance Lines Group
----------------------------------------------------------------------------
. Products
. Target Markets
. Distribution
. Service Operations
3 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PFS Management Office
----------------------------------------------------------------------------
. Dubes, Gelder, Weber
. Leverages expertise across broad cross section of
ReliaStar organization
. Distribution management
. Sales support and marketing
. Service operations
4 RELIASTAR
- --------------------------------------------------------------------------------
Page 2
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
. Minneapolis -- variable life
. Avon -- term life, universal life
. Seattle -- fixed/variable annuities
5 RELIASTAR
- --------------------------------------------------------------------------------
[GRAPHIC OF SEGMENT PRODUCTS AND TARGET MARKETS]
Page 3
<PAGE>
[GRAPHIC DESCRIPTION OF RELIASTAR'S VUL MARKET BY CUSTOMER SEGMENTS]
- --------------------------------------------------------------------------------
Product Initiatives
----------------------------------------------------------------------------
. PaineWebber
. Pilgrim Capital Corp.
. Product Development
. Triple X
8 RELIASTAR
- --------------------------------------------------------------------------------
Page 4
<PAGE>
- --------------------------------------------------------------------------------
Marketing Initiatives
----------------------------------------------------------------------------
. Estate planning "in a box"
. Seminar lead generation
. GEMS
. Business owner tools
. SAM
9 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PFS and TSA/FA Operating Income
----------------------------------------------------------------------------
[BAR CHART APPEARS HERE]
($ in millions)
1994-1998 CAGR:A 25.3%
TWELVE MONTHS
ENDED DECEMBER 31,
1994 70.8
1995 107.0
1996 123.4
1997 145.5
1998 174.3
1999 186.6
Note: Business segment data prior to 1997 presented on a pro forma basis.
1999 data based on 12 months ended 6/30/1999
10 RELIASTAR
- --------------------------------------------------------------------------------
Page 5
<PAGE>
- --------------------------------------------------------------------------------
PFS and TSA/FA Top Line Growth
----------------------------------------------------------------------------
($ in millions)
1994-1998 CAGR: 19.6%
[BAR CHART APPEARS HERE]
TWELVE MONTHS ENDED
DECEMBER 31,
1994 465.6
1995 721.6
1996 700.0
1997 836.2
1998 952.3
1999 975.4
Note: Business segment data prior to 1997 presented on a pro forma basis.
1999 data based on 12 months ended 6/30/1999
11 RELIASTAR
- --------------------------------------------------------------------------------
Page 6
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Products
------------------------------------------------------------------------------------------------
Fixed
Fixed Annuity
2nd VA VA Non- Annuity Non-
Markets Term UL -to-die VUL SVUL Qualified Qualifed Qualified Qualified
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
K-12 TSA TSA TSA
- ---------------------------------------------------------------------------------------------------------------
Career PPGA PPGA PPGA PPGA PPGA
Military
- ---------------------------------------------------------------------------------------------------------------
Government PPGA PPGA PPGA PPGA PPGA
Employees
- ---------------------------------------------------------------------------------------------------------------
Mid/upper- BGA BGA BGA
Mid income PPGA PPGA PPGA PPGA
AB
- ---------------------------------------------------------------------------------------------------------------
Business BGA BGA BGA BGA BGA BGA
Owners PPGA PPGA PPGA PPGA PPGA
AB
- ---------------------------------------------------------------------------------------------------------------
Upscale/ BGA BGA BGA BGA BGA BGA BGA
Affluent PPGA PPGA PPGA PPGA PPGA PPGA PPGA
AB
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
[FOLLOWING SLIDES DESCRIBE RELIASTAR'S DISTRIBUTION
CHANNELS FOR INDIVIDUAL PRODUCTS]
14 RELIASTAR
- --------------------------------------------------------------------------------
Page 7
<PAGE>
[FOLLOWING SLIDES DESCRIBE "ENVOY" MARKETING INITIATIVE]
<PAGE>
- --------------------------------------------------------------------------------
Service Center: Objectives
----------------------------------------------------------------------------
. Improve operating efficiency
. Enhance customer service
34 RELIASTAR
- --------------------------------------------------------------------------------
Page 17
<PAGE>
- --------------------------------------------------------------------------------
Service Center:
----------------------------------------------------------------------------
. Minot
. training effort
. Technology
. Transition well under way
35 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Customer Service Consolidation
----------------------------------------------------------------------------
. Expected cost savings: $12-14 million (pre-tax) (approximately
20-25% on base of $55 million)
. Provides more seamless service for customers and producers
. Technology should drive efficiency gains
. Facilitates integration of future acquisitions
. Full clientization of data should enhance marketing capabilities
36 RELIASTAR
- --------------------------------------------------------------------------------
Page 18
<PAGE>
- --------------------------------------------------------------------------------
Highlights To Date
----------------------------------------------------------------------------
December Approved Service Center strategy
March Broke ground in Minot
April Hired Minot management staff
June Finalized training plans
July Hired 250 Minot associates
August Held Grand Opening
November Go `live'
37 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Training
----------------------------------------------------------------------------
. "Pre-Hire Program" began in April
. August training at Minot State University
. Moved to new building after 8/30 Grand Opening
. Training effort to continue to 11/5
38 RELIASTAR
- --------------------------------------------------------------------------------
Page 19
<PAGE>
- --------------------------------------------------------------------------------
Transition
----------------------------------------------------------------------------
On schedule:
. November `99: Annuities (Seattle & Minneapolis)
. March `00: Life Call Center (all locations)
. June `00: Life Administration (all locations)
. Aug. `00: New Business & Field Services (Minneapolis)
. Oct. `00: New Business & Field Services (Avon & Woodbury)
39 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Technology
----------------------------------------------------------------------------
. Technology to drive efficiency gains
. Enhanced capabilities:
- Image Workflow
- Policy Administration Utility
- Data Warehouse
- Telephony
- Common New Business System
40 RELIASTAR
- --------------------------------------------------------------------------------
Page 20
<PAGE>
- --------------------------------------------------------------------------------
Service Center: Ongoing Expense Savings
----------------------------------------------------------------------------
(Pretax, $ in millions)
1999 2000 2001 2002 2003
Net increase (decrease)
Facilities-related $ -- $2 $(1) $(1) $(1)
Personnel-related -- (7) (10) (12) (13)
----- ---- ----- ----- -----
Net ongoing impact $ -- $(5) $(11) $(13) $(14)
on expenses
Note: Non accruable transition costs in 1999 and 2000 are expected to be $5
million and $3 million, respectively.
41 RELIASTAR
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Products
----------------------------------------------------------------------------------------------------
Fixed
Fixed Annuity
2nd VA VA Non- Annuity Non-
Markets Term UL -to-die VUL SVUL Qualified Qualified Qualified Qualified
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
K-12 TSA TSA TSA
- -----------------------------------------------------------------------------------------------------------------
Career PPGA PPGA PPGA PPGA PPGA
military
- -----------------------------------------------------------------------------------------------------------------
Government PPGA PPGA PPGA PPGA PPGA
Employees
- -----------------------------------------------------------------------------------------------------------------
Mid/upper-
mid income
- -----------------------------------------------------------------------------------------------------------------
Business BGA BGA BGA BGA BGA BGA
Owners PPGA PPGA PPGA PPGA PPGA
AB
- -----------------------------------------------------------------------------------------------------------------
Upscale/ BGA BGA BGA BGA BGA BGA BGA
affluent PPGA PPGA PPGA PPGA PPGA PPGA PPGA
AB
- -----------------------------------------------------------------------------------------------------------------
Service Operations
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Page 21
<PAGE>
- --------------------------------------------------------------------------------
PFS Summary
----------------------------------------------------------------------------
. Manage expenses
. Strengthen product line
. Strengthen marketing
. Strengthen sales management competencies
. Continue to build cross selling activity
43 RELIASTAR
- --------------------------------------------------------------------------------
Page 22
<PAGE>
- --------------------------------------------------------------------------------
Broker/Dealer
Services
RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ReliaStar Broker/Dealers:
Washington Square Securities, Inc.
PRIMEVEST Financial Services, Inc.
Financial Northeastern Companies
RELIASTAR
- --------------------------------------------------------------------------------
Page 1
<PAGE>
- --------------------------------------------------------------------------------
ReliaStar Broker/Dealers
----------------------------------------------------------------------------
Why are the Broker/Dealers important?
. Facilitate cross marketing
. Gather assets
. Operational capabilities to support multiple opportunities
. Earnings growth potential
3 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Washington Square Securities, Inc.
----------------------------------------------------------------------------
. Broker/Dealer for Independent Producer Channel
- Full service broker/dealer supports Enterprise variable products
strategy
- Important capability to facilitate recruiting of producers
- Reps associated with WSSI as of August 31, 1999 - 2,386
4 RELIASTAR
- --------------------------------------------------------------------------------
Page 2
<PAGE>
- --------------------------------------------------------------------------------
[SLIDE DESCRIBES WSSI STRATEGY FOR REGISTERED REPRESENTATIVE RETENTION]
5 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Washington Square Securities, Inc.
----------------------------------------------------------------------------
($ in millions)
1995 1996 1997 1998 1999*
---- ---- ---- ---- -----
Revenues 19.0 39.4 55.3 78.7 45.3
Growth 107% 40% +42%
Net Income .9 1.5 1.1 2.5 .9
Proprietary Sales 124 245 309 418 242
(Premiums & Deposits)
Customer Assets Held N/A N/A 5,915 8,312 9,620
* First six months only
6 RELIASTAR
- --------------------------------------------------------------------------------
Page 3
<PAGE>
- --------------------------------------------------------------------------------
Washington Square Securities, Inc.
----------------------------------------------------------------------------
($ in millions)
Gross Retail Sales
[BAR CHART APPEARS HERE]
TWELVE
MONTHS
ENDED
DECEMBER 31,
1992 194
1993 340
1994 386
1995 492
1996 1,127
1997 1,484
1998 1,960
1999* 2,569
*Annualized based on 6 months
7 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Washington Square Securities, Inc.
----------------------------------------------------------------------------
($ in millions)
Gross Retail Sales
TWELVE MONTHS Mutual Other Total
ENDED DECEMBER 31, Life Annuities Funds Activity Retail Sales
- ------------------ ---- --------- ------ -------- ------------
1996 74 313 657 84 1,127
1997 84 448 723 231 1,484
1998 107 605 979 269 1,960
1999* 97 783 1,268 421 2,569
* Annualized based on 6 months
8 RELIASTAR
- --------------------------------------------------------------------------------
Page 4
<PAGE>
- --------------------------------------------------------------------------------
PRIMEVEST (as a business unit)
----------------------------------------------------------------------------
Third party marketing Broker/Dealer focused on the bank market:
. Focus on community and small regional banks
. #1 market share in number of bank relationships (575 banks)
. #2 market share in gross retail sales
. Full service or discount service
. Product delivery
. Field organization
. Compliance and regulatory support
9 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIMEVEST (as a business unit)***
----------------------------------------------------------------------------
($ in millions)
SIX
MONTHS
ENDED
TWELVE MONTHS ENDED DECEMBER 31 JUNE 30,
-------------------------------------- --------
1995* 1996* 1997 1998 1999**
----- ----- ---- ---- ------
Revenues 19.2 33.1 42.0 53.9 33.2
Growth 73% 26% 30%
Net Income .3 1.4 1.7 2.5 2.2
Proprietary Sales -0- -0- 6.0 21.0 24.0
(Premiums & Deposits)
Customer Assets Held 2,151 3,553 4,699 6,770 7,069
* Acquired October, 1996
** First six months only
*** Adjusted
10 RELIASTAR
- --------------------------------------------------------------------------------
Page 5
<PAGE>
- --------------------------------------------------------------------------------
PRIMEVEST (as a business unit)
----------------------------------------------------------------------------
($ in millions)
Gross Retail Sales
[BAR CHART APPEARS HERE]
TWELVE
MONTHS
ENDED DECEMBER 31,
1996 2,296
1997 2,959
1998 3,780
1999* 4,140
* Annualized based on 6 months.
11 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIMEVEST (as a business unit)
----------------------------------------------------------------------------
($ in millions)
Gross Retail Sales
TWELVE
MONTHS Mutual Other Total
ENDED DECEMBER 31, Life Annuities Funds Activity Retail Sales
- ------------------ ---- --------- ----- -------- ------------
1996 -- 106 283 1,906 2,296
1997 2 137 342 2,478 2,959
1998 4 163 473 3,140 3,780
1999* 4 210 550 3,378 4,140
* Annualized based on 6 months
12 RELIASTAR
- --------------------------------------------------------------------------------
Page 6
<PAGE>
- --------------------------------------------------------------------------------
PRIMEVEST (as a business unit)
----------------------------------------------------------------------------
[SLIDE DESCRIBES PRIMEVEST'S STRATEGIC DIRECTION]
13 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIMEVEST (as operations center)
----------------------------------------------------------------------------
Broker/Dealer Strategy: One Back Office Operation
Multiple Sales Fronts
[CHART DESCRIBING END USES OF OPERATIONS]
14 RELIASTAR
- --------------------------------------------------------------------------------
Page 7
<PAGE>
- --------------------------------------------------------------------------------
PRIMEVEST (as operations center)
----------------------------------------------------------------------------
. New Technology
- Internet capabilities
> Contact and portfolio management system
> Web-based trading
- Common remitter capability
- Consolidated statements
. Move WSSI Clearing to PRIMEVEST
. Consolidate Other Operations Functions
15 RELIASTAR
- --------------------------------------------------------------------------------
Page 8
<PAGE>
- --------------------------------------------------------------------------------
Financial Northeastern Companies
----------------------------------------------------------------------------
Business
. Provides services to over 2,500 credit union customers
- Brokering and underwriting CDs
- Fixed income securities sales
. Brokerage Services to Institutions and high net worth individuals
Opportunities
. Cross-sell PRIMEVEST Services to FNC Credit Unions
. Cross-sell FNC CD Brokerage and fixed income capabilities to PRIMEVEST
Institutions
. Move clearing to PRIMEVEST
. Expand capabilities leveraging RLR financial strength
17 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Financial Northeastern Companies
----------------------------------------------------------------------------
1998 Retail CD League Table
Rank Manager Amount ($MM)
---- ------- ------
1. Morgan Stanley Dean Witter 6,529.1
2. Merrill Lynch 6,493.8
3. Salomon Smith Barney 4,211.0
4. LaSalle 3,424.5
5. Oppenheimer 2,664.7
6. BT Alex Brown 1,490.4
7. Paine Webber 1,100.1
----------------------------------------------------------
8. Financial Northeastern 442.0
----------------------------------------------------------
9. Lehman Brothers 392.5
10. Prudential Securities 289.6
Others 1,767.4
--------
Total 28,805.1
18 RELIASTAR
- --------------------------------------------------------------------------------
Page 9
<PAGE>
- --------------------------------------------------------------------------------
Capital
Management
RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Components of Capital Management
- --------------------------------------------------------------------------------
. Effective deployment of capital
. Preserve financial strength ratings
. Optimize cost of capital
. Maintain financing flexibility
2 RELIASTAR
- --------------------------------------------------------------------------------
Page 1
<PAGE>
- --------------------------------------------------------------------------------
Deployment of Capital
----------------------------------------------------------------------------
. Investment in current business operations
. Investment in acquisitions
. Share buyback programs
3 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Investment in Current Operations
----------------------------------------------------------------------------
. "Target Surplus" = equity allocated to each business unit, based on
risk exposure and ratings objectives
. Each product is priced to achieve a target ROI, with investment
computed using "target surplus"
. Consolidated RLR maintains capital levels that support our financial
strength ratings
4 RELIASTAR
- --------------------------------------------------------------------------------
Page 2
<PAGE>
- --------------------------------------------------------------------------------
Business Unit ROI Objectives
----------------------------------------------------------------------------
Personal Financial Services 14%
Tax-Sheltered and Fixed Annuities 13%
Worksite Financial Services 20%
Reinsurance 35%
Mutual Funds 20%
--------------------------------------------------
RLR Financial Objective 16%
--------------------------------------------------
5 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Risk-Based Capital Ratios
----------------------------------------------------------------------------
(As of June 30, 1999, for ReliaStar Life)
Rating Agency Ratio
------------- -----
A.M. Best 179%
Standard & Poor's 164%
Note: Minimum ratio targeted to maintain
current ratings is 160%
6 RELIASTAR
- --------------------------------------------------------------------------------
Page 3
<PAGE>
- --------------------------------------------------------------------------------
Financial Strength Ratings
----------------------------------------------------------------------------
Subs RLR
---- ---
A.M. Best A+ --
Standard & Poor's AA A
Moody's A1 A3
. Solid financial strength ratings are very important to distributors
and customers
7 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ReliaStar Acquisition Strategy
----------------------------------------------------------------------------
. Expand distribution, products, and service capabilities
. Build scale in core business lines
. Meet financial criteria:
- accretive to EPS in first 12 months
- consistent with ROE objective
- complementary to financial strength ratings
8 RELIASTAR
- --------------------------------------------------------------------------------
Page 4
<PAGE>
- --------------------------------------------------------------------------------
Capitalization Ratio
----------------------------------------------------------------------------
1997 1998 1999E 2000E
---- ---- ----- -----
Capitalization
Ratio 24% 29% 33% 31%
Notes:
1) Calculated as long-term debt plus preferred securities (TOPrS),
divided by total capital
2) 1999E adjusted for financing associated with completed stock
buybacks and Pilgrim acquisition
3) 2000E assumes no additional debt or equity offerings in 2000
4) Target maximum ratio of 35% to preserve current ratings
9 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Acquisition Financing Capacity
----------------------------------------------------------------------------
($ in millions)
(Based on 35% Max. Cap. Ratio)
Financing Structure 2000 2001* Cumulative
------------------- ---- ----- ----------
100% debt $250 $200 $450
80% debt/20% stock 375 275 650
60% debt/40% stock 675 475 1,150
40% debt/60% stock 3,400 2,400 5,800
greater than 35%
debt/less than 65%
stock unlimited unlimited unlimited
-----------------------------------------------------------------
* Assuming indicated transaction volume completed in 2000
Note: Analysis does not reflect limits imposed by fixed charge coverage
ratio or other constraints
10 RELIASTAR
- --------------------------------------------------------------------------------
Page 5
<PAGE>
- --------------------------------------------------------------------------------
Fixed Charge Coverage Ratio
----------------------------------------------------------------------------
1998 1999E 2000E 2001E
---- ----- ----- -----
Coverage
Ratio 8.2x 7.3x 7.1x 8.2x
Notes:
1) Calculated as operating earnings before interest and taxes, divided by
interest expense and preferred dividends
2) 1999E - 2001E includes only financings associated with completed stock
buybacks and Pilgrim transaction
3) Target minimum coverage ratio of 6.0x to preserve current ratings
11 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Recent Acquisitions
----------------------------------------------------------------------------
Purpose Financing Date
- ------- --------- ----
Strategic Comb. 4Q99 Pilgrim Capital Corp.
Tactical Debt 2Q99 Financial Northeastern Co.
Tactical Debt 3Q98 KPMG 401(k) Plans Admin.
Tactical Debt 1Q98 LaMar & Phillips, Inc.
Strategic Debt 1Q98 Citizens Savings Bank
Strategic Comb. 3Q97 Security-Connecticut Corp.
Tactical Debt 2Q97 Brandes Int'l Equity Fund
Tactical Debt 4Q96 PRIMEVEST
Strategic Stock 3Q96 SMMS, Inc.
Tactical Debt 2Q95 Advest Mutual Funds
Strategic Comb. 1Q95 USLICO Corp.
12 RELIASTAR
- --------------------------------------------------------------------------------
Page 6
<PAGE>
- --------------------------------------------------------------------------------
Share Repurchases Programs
----------------------------------------------------------------------------
Total Shares
Years Purpose Repurchased
----- ------- -----------
1995, 1997, 1998 Acquisition- 7.1 million
related
1998, 1999 General, 6.3 million
Systematic
13 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Weighted Average Cost of Capital
----------------------------------------------------------------------------
1995 11.5%
1996 11.3%
1997 11.1%
1998 10.7%
1999 10.3%
14 RELIASTAR
- --------------------------------------------------------------------------------
Page 7
<PAGE>
- --------------------------------------------------------------------------------
Capital Management Report Card
----------------------------------------------------------------------------
Objective: Effective deployment of capital
Outcome:
Year ROE
---- ---
1994 15.4%
1995 16.0%
1996 16.4%
1997 15.7%
1998 15.2%
12 months ending 6/30/99 15.2%
5-year average 15.7%
Peer average 13.7%
15 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capital Management Report Card
----------------------------------------------------------------------------
Objective: Preserve financial strength ratings
Outcome:
A. M. Best Life Companies upgraded to
A+ in January 1998
Standard & Life Companies upgraded
Poor's to AA in October 1998
Moody's Life Companies have
maintained A1 rating since
January 1996
16 RELIASTAR
- --------------------------------------------------------------------------------
Page 8
<PAGE>
- --------------------------------------------------------------------------------
Capital Management Report Card
----------------------------------------------------------------------------
Objective: Optimize cost of capital
Outcome: Since 1995, RLR has reduced its
weighted average cost of capital by
120 bp, from 11.5% to 10.3%
17 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capital Management Report Card
----------------------------------------------------------------------------
Objective: Maintain financing flexibility
Outcome:
Since 1995, our capital management efforts have allowed us to:
- Finance 11 acquisitions, with a combination of debt, TOPrS and
common stock
- Repurchase over 13 million RLR shares
- Maintain additional capacity to finance future growth
18 RELIASTAR
- --------------------------------------------------------------------------------
Page 9
<PAGE>
[Right on the Money Logo]
[SLIDES DESCRIBE "RIGHT ON THE MONEY" TELEVISION PROGRAM]
<PAGE>
- --------------------------------------------------------------------------------
Worksite
Marketing
RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1999 Operating Earnings
- --------------------------------------------------------------------------------
(Percent Contribution)
Personal Financial Services 36%
Tax-Sheltered and Fixed Annuities 26
----------------------------------------------------
Worksite Financial Services 21
----------------------------------------------------
Reinsurance 14
Other Business Units 3
---
Total 100%
Note: Based on insurance product and financial services operating results,
before special charges, for the 12 months ended June 30, 1999
2 RELIASTAR
- --------------------------------------------------------------------------------
Page 1
<PAGE>
- --------------------------------------------------------------------------------
Worksite Financial Services
- --------------------------------------------------------------------------------
Four Businesses:
. Group - ReliaStar Employee Benefits (REB)
. 401(k) - ReliaStar Retirement Plans (RRP)
. Payroll Deduction - ReliaStar Payroll Deduct (RPD)
. Financial Education - Worksite Advisory Services (WAS)
3 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Worksite Financial Services
- --------------------------------------------------------------------------------
Business Unit Contribution to Earnings
------------- ------------------------
Group 60%
401(k) 25%
Payroll Deduction 15%
Financial Education --
4 RELIASTAR
- --------------------------------------------------------------------------------
Page 2
<PAGE>
- --------------------------------------------------------------------------------
Worksite Financial Services
- --------------------------------------------------------------------------------
Sales.
[BAR CHART APPEARS HERE]
($ in millions)
- --------------------------------------------------------------------------------
TWELVE
MONTHS
ENDED
DECEMBER 31,
1995 340.9
1996 403.5
1997 502.7
1998 551.7
Jun-99 350
* CAGR without medical 23%
** YTD 6/30/99 sales increased 36% compared to YTD 6/30/98
5 RELIASTAR
- --------------------------------------------------------------------------------
Worksite Financial Services
- --------------------------------------------------------------------------------
ROEs
[BAR CHART APPEARS HERE]
($ in millions)
- --------------------------------------------------------------------------------
TWELVE
MONTHS
ENDED Operating
DECEMBER 31, Income ROE
1996 44.1 17.5%
1997 51.4 18.6%
1998 60.5 20.6%
6 RELIASTAR
- --------------------------------------------------------------------------------
Page 3
<PAGE>
- --------------------------------------------------------------------------------
Worksite Financial Services
- --------------------------------------------------------------------------------
6/30/99 YTD sales comparison
YTD YTD YTD 6/30/99
($ in millions) 6/30/99 6/30/98 YTD 6/30/98
Actual Actual Variance
-------- ------- -----------
Group 67.9 57.5 +18%
401(k) 274.4 193.4 +42%
Payroll Deduction 8.1 6.8 +19%
TOTAL 350.4 257.7 +36%
7 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Worksite Financial Services
Cross Sales
- --------------------------------------------------------------------------------
YTD 6/30/99 vs. YTD 6/30/98
($ in millions)
- --------------------------------------------------------------------------------
[BAR CHART APPEARS HERE]
1998 39.5
1999 88.6
Numbers of Groups Sold
- ----------------------
1995 - 9
1998 - 238
8 RELIASTAR
- --------------------------------------------------------------------------------
Page 4
<PAGE>
- --------------------------------------------------------------------------------
Worksite Financial Services
----------------------------------------------------------------------------
Six months earnings compared to 1998
YTD YTD 1998 to 1999
($ in millions) 6/30/99 6/30/98 Variance
------- ------- ------------
Group 19.0 19.6 (3%)
401(k) 7.1 6.5 + 9%
Payroll Deduction 4.4 2.9 +57%
Financial Education (0.6) (1.2) NM
TOTAL 29.9 27.8 + 8%
9 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Worksite Financial Services
----------------------------------------------------------------------------
[GRAPH DESCRIBING HISTORICAL OPERATING INCOME PROVIDED BY MEDICAL PRODUCTS AND
ALL OTHER WORKSITE PRODUCTS APPEARS HERE]
10 RELIASTAR
- --------------------------------------------------------------------------------
Page 5
<PAGE>
- --------------------------------------------------------------------------------
Worksite Financial Services
- --------------------------------------------------------------------------------
[LINE GRAPH ILLUSTRATION OF HISTORICAL EARNING GROWTH RATES TOTAL WFS, MEDICAL
AND ALL OTHER WORKSITE PRODUCTS APPEARS HERE]
11 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Worksite Financial Services
Overview
- --------------------------------------------------------------------------------
1999 Critical Factors
. Product Development
. Sales Office/Staff Expansion
. Expense Management/AVA
. Acquisitions
. Technology
12 RELIASTAR
- --------------------------------------------------------------------------------
Page 6
<PAGE>
- --------------------------------------------------------------------------------
Group Insurance
- --------------------------------------------------------------------------------
Medical Update
. Completing transition of ASO and Insured Medical to Trustmark
. Retained Stop Loss and other product lines
. Co-located Trustmark account reps
. New business opportunities
- Stop Loss line
- Packaging products
13 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Group Insurance
- --------------------------------------------------------------------------------
Financial Information
. Total premium and fees in $550 million range
. Medical premium should be replaced by worksite products
. Non-medical products operating income 3 year CAGR of +20%
14 RELIASTAR
- --------------------------------------------------------------------------------
Page 7
<PAGE>
- --------------------------------------------------------------------------------
Group Insurance
- --------------------------------------------------------------------------------
Term Life Product
. 9th largest carrier in Group Life premium - $450 million
. 5th largest writer of new Group Life sales in `98 - $67 million
. 6th largest writer of new Group Life sales through 2Q99 - $54 million
(up 25% from `98)
. Group Life sales had a 3 year CAGR of 45%
15 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Group Insurance
- --------------------------------------------------------------------------------
Term Life Product Packaging
. Broad product portfolio
- Traditional group products
- Voluntary offerings
- Cross-sold products
. Most common packaged products with Group Life:
- Disability
- Stop Loss
- 401(k)
- Voluntary payroll deduction products
- MoneySense(R) financial education
16 RELIASTAR
- --------------------------------------------------------------------------------
Page 8
<PAGE>
- --------------------------------------------------------------------------------
Group Insurance
- --------------------------------------------------------------------------------
Competitors: Peer companies and cross-selling competitors
Term Life Disability Stop Loss
--------- ---------- ---------
Hartford UNUM/Provident Boston Mutual
UNUM/Provident Hartford SafeCo
Prudential Standard Sun Life
MetLife
Life/401(k) Life/UL
----------- -------
Principal Colonial/UNUM/Provident
Great West CIGNA
18 RELIASTAR
- --------------------------------------------------------------------------------
Page 9
<PAGE>
- --------------------------------------------------------------------------------
Group Insurance
- --------------------------------------------------------------------------------
[SLIDE DESCRIBES DISABILITY PRODUCT OBJECTIVES]
19 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Group Insurance
- --------------------------------------------------------------------------------
[SLIDE DESCRIBES STOP LOSS PRODUCT OBJECTIVES]
20 RELIASTAR
- --------------------------------------------------------------------------------
Page 10
<PAGE>
- --------------------------------------------------------------------------------
Group Insurance
----------------------------------------------------------------------------
Sales Organization
. Captive sales organization
. Five month training program; sales profile vs. technical
background
. Hire experience reps as needed
. Compensation structure
. Broad product portfolio
. Co-location of specialist key to cross-selling
21 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Group Insurance
----------------------------------------------------------------------------
Sales Expansion Results
. 15% annual sales force growth since `96
- 60 to 95 reps in three years
- 14 to 25 markets; expansion continues
. 48% sales increase with reps less than three years experience
22 RELIASTAR
- --------------------------------------------------------------------------------
Page 11
<PAGE>
- --------------------------------------------------------------------------------
Group Insurance
----------------------------------------------------------------------------
[SLIDE DESCRIBES STRATEGY BEHIND NEW 50-500 EMPLOYER MARKET]
23 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Group Insurance
----------------------------------------------------------------------------
[SLIDES DESCRIBES EXPENSE INITIATIVES]
----------------------------------------------------------------------------
Group Term Life Inforce Premium Rate per $1,000(% change from prior period)
----------------------------------------------------------------------------
1996 1997 1998 YTD 6/99
-------------- ------------- ----------- -----------
$2.63 (-3.7%) $2.54 (-3.4%) $2.52 (.8%) $2.53 (.4%)
----------------------------------------------------------------------------
24 RELIASTAR
- --------------------------------------------------------------------------------
Page 12
<PAGE>
- --------------------------------------------------------------------------------
Group Insurance
----------------------------------------------------------------------------
Expense Initiatives
. Implemented Activity Value Analysis (AVA) throughout division
. AVA predicated on two new operational efforts
- Image and workflow
- Administrative capability for 50-500 market
25 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
401(k)
----------------------------------------------------------------------------
[SLIDES DESCRIBES CHOICEONE PRODUCT FEATURES]
26 RELIASTAR
- --------------------------------------------------------------------------------
Page 13
<PAGE>
- --------------------------------------------------------------------------------
401(k)
----------------------------------------------------------------------------
Product Features - ChoiceOne
Sub-advised Investment Options:
. Both New York and other 49 states
. Expand with Northstar and Pilgrim
. Current sub-advised offerings:
- Goldman Sachs Core US Equity Managed Account
- Goldman Sachs Cap Growth Managed Account
- ReliaStar Opportunity Value Managed Account (OpCap)
- ReliaStar Balanced Value Managed Account (OpCap)
- ReliaStar Value Managed Account (OpCap)
- Salomon Brothers SB Total Return Managed Account
- Salomon Brothers SB Investment Managed Account
- Salomon Brothers SB Cap Managed Account
- PIMCO StockPlus Managed Account
- Mitchell Hutchins Tactical Allocation Managed Account
27 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
401(k)
----------------------------------------------------------------------------
Product Features - ChoiceOne
Mutual Funds: Enhances product offering through choice
. AIM Management Group Inc.
. The Alger Fund
. American Century Funds
. Fidelity Investments
. Lord Abbett & Company
. Neuberger & Berman Funds
. Northstar Investment Management
. Oppenheimer Funds
. Putnam Investments
. The SoGen Funds
. Warburg Pincus Funds
. ChoiceOne's LifeStyles
28 RELIASTAR
- --------------------------------------------------------------------------------
Page 14
<PAGE>
- --------------------------------------------------------------------------------
401(k)
----------------------------------------------------------------------------
Dallas Service Center
. Acquired from KPMG on 10/3/98
. Technology-based strategy
. Small case market
. Quick highlights of our current capabilities
[SLIDES DESCRIBE DALLAS SERVICE CENTER]
29 RELIASTAR
- --------------------------------------------------------------------------------
Page 15
<PAGE>
- --------------------------------------------------------------------------------
Payroll Deduction
----------------------------------------------------------------------------
Products
. New introductions and revised products
- Revised UL and Par Whole Life
- New Disability income product
- Wellness benefit added to cancer policy
. Products under development
- Critical illness
- LTC rider to UL
39 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Payroll Deduction
----------------------------------------------------------------------------
Sales Expansion
. Sales staff transitioned from Arlington, VA to REB field offices
. Additional staff added in Atlanta and Northeast
. Offices now in Atlanta, New Jersey, Chicago, Los Angeles,
Arlington and Dallas; expansion under consideration in
Minneapolis and New Jersey
40 RELIASTAR
- --------------------------------------------------------------------------------
Page 20
<PAGE>
- --------------------------------------------------------------------------------
Payroll Deduction
----------------------------------------------------------------------------
Expense Initiatives
. Implemented Activity Value Analysis (AVA)
- Changes in Printing and Fulfillment
- Billing process
- 10 other smaller initiatives
. Additional initiatives under review
- Image and Workflow/other IT projects
- Utilization of Minot Service Center
- Outsource certain activities
41 RELIASTAR
- --------------------------------------------------------------------------------
Worksite Advisory Services
----------------------------------------------------------------------------
. Addition to ReliaStar worksite package
. Evolving business
- Shifting emphasis from seminars to advisory services
- Non-commissioned sales staff a challenge
. Profit potential minimal over near term
42 RELIASTAR
- --------------------------------------------------------------------------------
Page 21
<PAGE>
- --------------------------------------------------------------------------------
Reinsurance
RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1999 Operating Earnings
- --------------------------------------------------------------------------------
(Percent Contribution)
Personal Financial Services 36%
Tax-Sheltered and Fixed Annuities 26
Worksite Financial Services 21
-----------------------------------------------------
Reinsurance 14
-----------------------------------------------------
Other Business Units 3
---
Total 100%
Note: Based on insurance product and financial services operating results,
before special charges, for the 12 months ended June 30, 1999
2 RELIASTAR
- --------------------------------------------------------------------------------
Page 1
<PAGE>
- --------------------------------------------------------------------------------
ReliaStar Reinsurance Group Operations Summary
- --------------------------------------------------------------------------------
. Division of ReliaStar Life Insurance Company...formed 23 years ago
. 155 associates including 4 international offices and 2 wholly-owned
subsidiaries
. Engaged in Group and Special Risk Reinsurance worldwide
. Recent entrance into Special Insurance Lines
. Variety of businesses provide significant diversification
. High profitability with average ROEs of 45% over the last
10 years
. Considered a top A&H reinsurer in the market by U.S. reinsurance
brokers.
3 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Historical Reinsurance Performance
(in millions)
- --------------------------------------------------------------------------------
[BAR CHART APPEARS HERE]
TWELVE MONTHS ENDED DECEMBER 31,
1995 1996 1997 1998
- --------------------------------------------------------------------
Operating Operating Operating Operating
Income Income Income Income
$28.3 $32.9 $37.2 $42.4
Net Earned Net Earned Net Earned Net Earned
Premium Premium Premium Premium
$167.0 $183.7 $221.9 $320.3
----------------
ROE
1998: 47.30%
1997: 47.70%
1996: 51.10%
1995: 50.38%
Average annual
growth rate of
Net Earned Premium:
24.2%
Average Annual
Growth Rate of
Operating Income:
14.5%
----------------
RELIASTAR
- --------------------------------------------------------------------------------
Page 2
<PAGE>
- --------------------------------------------------------------------------------
1999 Loss Ratio, Net Earned Premium
and Expense Development
- --------------------------------------------------------------------------------
1999 Loss Ratios by Quarter
---------------------------
Line of Business First Quarter Second Quarter July & Aug. 1999
- ---------------- ------------- -------------- ----------------
Life 56.45% 44.14% 44.60%
Medical 79.91% 71.64% 94.00%
All Other 75.95% 74.66% 74.56%
Total 69.34% 63.60% 70.40%
Total 1999 Net Earned Premium by Quarter (millions)
--------------------------------------------------
All Lines $104.0 $102.7 $72.6
1999 Commission and Expense Ratios by Quarter
---------------------------------------------
Line of Business First Quarter Second Quarter July & Aug. 1999
- ---------------- ------------- -------------- ----------------
Life 26.49% 22.09% 21.10%
Medical 28.36% 22.18% 19.50%
All Other 21.81% 22.46% 21.50%
Total 25.17% 22.26% 20.80%
- --------------------------------------------------------------------------------
<PAGE>
[SLIDES DESCRIBE REINSURANCE OPERATING PHILOSOPHY, DISTRIBUTION APPROACHES AND
GROWTH STRATEGIES.]
<PAGE>
- --------------------------------------------------------------------------------
Reinsurance by Unit
($ in millions)
- --------------------------------------------------------------------------------
[CIRCULAR GRAPH APPEARS HERE]
TWELVE MONTHS ENDED DECEMBER 31, 1998
Reinsurance
Management
Special
Managed Insurance
Broker Direct Care Products Disability International
$75.8 $127.4 $18.6 $20.3 $38.6 $39.6
$16.9 $ 11.6 $ 1.9 $ 1.2 $ 4.1 $ 6.7
1998
Reinsurance
Totals:
Net Earned
Premium
$320.3
Operating
Income
$42.4
11 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Earned Premium and Operating Income by Product Group
Twelve Months Ending December 31, 1994-1998
(in millions)
- --------------------------------------------------------------------------------
[BAR GRAPH OF HISTORICAL NET EARNED PREMIUM AND OPERATING INCOME BY GROUP LIFE,
ACCIDENTAL DEATH, WORKER'S COMP. AND GROUP MEDICAL PRODUCT GROUPS FOR TWELVE
MONTHS ENDED DECEMBER 31, 1994 THROUGH 1998 APPEARS HERE]
12 RELIASTAR
- --------------------------------------------------------------------------------
Page 6
<PAGE>
- --------------------------------------------------------------------------------
Net Earned Premium and Operating Income by Product Group
Twelve Months Ending December 31, 1994-1998
(in millions)
- --------------------------------------------------------------------------------
[BAR GRAPH OF HISTORICAL NET EARNED PREMIUM AND OPERATING INCOME BY MANAGED
CARE, GROUP DISABILITY, INTERNATIONAL AND SPECIAL INSURANCE PRODUCTS GROUPS FOR
TWELVE MONTHS ENDED DECEMBER 31, 1994 THROUGH 1998 APPEARS HERE]
13 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net Earned Premium and Operating Income by Product Group
Six Months Ending June 30, 1999
(in millions)
- --------------------------------------------------------------------------------
Net
Earned Operating
Premium Income
------- ------
Group Life $ 25.8 $ 4.4
Accidental Death (All Forms) 17.5 1.3
Workers' Comp. Carve-Out 31.3 7.9
Group Medical 53.8 0.1
Managed Care 14.4 1.5
Group Disability 24.7 1.0
International 22.9 2.3
Special Insurance Products 16.3 1.0
------- ------
GRAND TOTAL $ 206.7 $ 19.5
14 RELIASTAR
- --------------------------------------------------------------------------------
Page 7
<PAGE>
- --------------------------------------------------------------------------------
Total International Results
- --------------------------------------------------------------------------------
(in millions)
[BAR CHART APPEARS HERE]
TWELVE
MONTHS NET
ENDED EARNED OPERATING
DECEMBER 31, PREMIUM INCOME
1993 $4.1 $0.6
1994 $8.1 $1.5
1995 $12.8 $3.6
1996 $18.5 $5.2
1997 $27.4 $5.3
1998 $39.6 $6.7
19 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
International Reinsurance Offices
- --------------------------------------------------------------------------------
(in millions)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
[PHOTO OF [PHOTO OF [PHOTO OF [PHOTO OF
SOREN SCHEUER TONNY ANKER-SVENDSEN HANS WALLAGE ANA STALLINGS
APPEARS HERE] APPEARS HERE] APPEARS HERE] APPEARS HERE]
Copenhagen - 1992 Amsterdam - 1994
Year Net Earned Premium Operating Income Year Net Earned Premium Operating Income
1998 $15,825 $4,413 1998 $11,378 $1,698
[PHOTO OF JAKOB
KOLBYE APPEARS
HERE]
[PHOTO OF [PHOTO OF [PHOTO OF [PHOTO OF
JONATHAN MARC McLEAN APPEARS HERE] LUIS GALVAN
BOWERS APPEARS HERE] APPEARS HERE]
APPEARS HERE]
London - 1996 City - 1999
Year Net Earned Premium Operating Income Office in 1999
1998 $12,416 $ 640
</TABLE>
20 RELIASTAR
- --------------------------------------------------------------------------------
Page 10
<PAGE>
- --------------------------------------------------------------------------------
1998 International Premium
Distribution by Product
- --------------------------------------------------------------------------------
[PIE CHART APPEARS HERE]
Catastrophe AD Life Medical Disability WCA
25% 28% 29% 4% 2% 12%
RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Geographical Growth Opportunities
- --------------------------------------------------------------------------------
. Significant Growth: Argentina, London, Mexico, Scandinavia, Spain &
South Africa
. Modest Growth: Australia, Austria, Belgium, Central America, Colombia,
Chile, England, Far East, France, Germany, Italy, Netherlands, New
Zealand, Portugal & Switzerland
. Emerging Markets (Short Term): Brazil, Eastern Europe, Peru &
Venezuela
. Emerging Markets (Long Term): China & India
[MAP APPEARS HERE]
22 RELIASTAR
- --------------------------------------------------------------------------------
Page 11
<PAGE>
- --------------------------------------------------------------------------------
International Strategy
- --------------------------------------------------------------------------------
. Continued global expansion through increased marketing, strategic
partners, and establishment of additional local offices
. Focus on developed countries with political and economic stability
. Regional and seasoned professional staff familiar with local cultures
. Superior service and strong personal relationships
23 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
International Growth Opportunities
- --------------------------------------------------------------------------------
. Sales in Mexico and Central America through our new Mexico
City office
. Emphasis in Scandinavian markets
. Opportunities in South America
. Additional underwriting from London subsidiary with $6.0 million
additional capital
24 RELIASTAR
- --------------------------------------------------------------------------------
Page 12
<PAGE>
- --------------------------------------------------------------------------------
Workers' Compensation Financial History
(last 10 years)
----------------------------------------------------------------------------
[BAR GRAPH APPEARS HERE]
($ in millions)
TWELVE MONTHS
ENDED Net Earned Operating
DECEMBER 31, Premium Income
1989 $10.1 $6.7
1990 $10.2 $5.5
1991 $11.4 $6.6
1992 $13.8 $7.9
1993 $18.8 $9.3
1994 $21.8 $9.8
1995 $24.9 $12.3
1996 $20.2 $9.1
1997 $25.4 $12.1
1998 $31.8 $12.4
25 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[SLIDES DESCRIBE REINSURANCE STRATEGY AND PHILOSOPHY FOR THE WORKERS'
COMPENSATION MARKET]
- --------------------------------------------------------------------------------
26 RELIASTAR
- --------------------------------------------------------------------------------
Page 13
<PAGE>
- --------------------------------------------------------------------------------
[SLIDES DESCRIBE REINSURANCE DISABILITY REINSURANCE STRATEGY]
- --------------------------------------------------------------------------------
. We stay focused on the bottom line
. We have a diversity of clients
28 RELIASTAR
- --------------------------------------------------------------------------------
Page 14
<PAGE>
- --------------------------------------------------------------------------------
Disability Reinsurance
Twelve Months Ending December 31,
(in millions)
- --------------------------------------------------------------------------------
[BAR GRAPH APPEARS HERE]
NET EARNED OPERATING
PREMIUM INCOME ROE
------- ------ ---
1996 $24.9 $2.0 20.5%
1997 $26.0 $3.2 29.0%
1998 $38.6 $4.1 29.0%
29 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Special Insurance Products
- --------------------------------------------------------------------------------
12-31-95 6-30-99
-------- -------
Occ Acc Occ Acc
Vision Care Vision Care
Student Health
Terrorism AD&D
Travel Accident &
Voluntary AD&D
Stop Loss/BIG
Voluntary Dental
Stop Loss/REM
Stop Loss/IAF
Basic Dental
Small Group Life
Blanket Accident
RX Drug
Serious Illness
30 RELIASTAR
- --------------------------------------------------------------------------------
Page 15
<PAGE>
- --------------------------------------------------------------------------------
Special Insurance Products
Annualized Premium Inforce
- --------------------------------------------------------------------------------
[GRAPH APPEARS HERE]
(in millions)
DECEMBER 31,
1994 $5,717,000
1995 $5,816,000
1996 $13,758,000
1997 $34,597,000
1998 $70,955,000
1999 $95,529,000 (AS OF 6/30/99)
31 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Value-Added Services
- --------------------------------------------------------------------------------
. ROSE(R) Program
. Underwriting
- facultative underwriting
- underwriting manuals
- training
. Actuarial
- reserve analysis
- pricing
- retention analysis
. Research
- Group Disability
- Managed Care
. Administration
- Electronic Funds Transfer
- audits
- customized administration manuals
. Educational Seminars
- Annual ROSE(R)Conference
- Medical Directors Workshop
- Disability Claims Leader Forum
32 RELIASTAR
- --------------------------------------------------------------------------------
Page 16
<PAGE>
- --------------------------------------------------------------------------------
ROSE(R) Program
- --------------------------------------------------------------------------------
. Consulting program for catastrophic medical claims
. First reinsurance based program ... created in 1984
. Supports several reinsurance product lines (Medical/Managed
Care/LTD/Workers Comp/SIP)
. Provided with no cost to clients
- Five expert physicians on exclusive retainer
- Exclusive contract with two national leaders in case management
- Only reinsurer with perinatal and neonatal program (ROSEBUD(R))
- Transplant networks in 42 states ... provider networks in all 50
states
. 1998 savings of $12 million
- $4,496,000 to ReliaStar
- $7,534,000 to clients
33 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fee Income Strategy
- --------------------------------------------------------------------------------
. Generate additional revenue from the risk management of products
within our target market
- Developed through acquired MGUs and existing businesses
- Income which complements risk taking strategies
- Does not involve any life or health contingency risk
. What we have to offer
- ReliaStar paper
- Underwriting expertise
- Claims administration
- Other services
. Currently 5% of earnings ... target 10%
34 RELIASTAR
- --------------------------------------------------------------------------------
Page 17
<PAGE>
- --------------------------------------------------------------------------------
Expense
Management
RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Operating Expense Ratio
----------------------------------------------------------------------------
($ in millions)
1990 1994 1998 2Q99 4Q00P
---- ---- ---- ---- -----
Statutory Premiums 1,140 1,810 3,308 3,611
Operating Expenses 245 248 404 393
Expense Ratio 21.5% 13.7% 12.2% 10.9% 9%
Note: 2Q99 based on 12 months ended 6/30/99
2 RELIASTAR
- --------------------------------------------------------------------------------
Page 1
<PAGE>
- --------------------------------------------------------------------------------
Current Expense Initiatives
----------------------------------------------------------------------------
. Customer service function consolidation
. Changes to benefit plans
. Printing and forms management
. Vendor management
. Travel management
. Technology spending refocused on revenue-generating investments
. Process reengineering (AVA)
3 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Detail of Expected Expense Savings
----------------------------------------------------------------------------
($ in millions, pre-tax)
1999 2000 2001 2002
---- ---- ---- ----
Service Center -- 5-6 11-12 13-14
Employee Benefits 12 12 12 12
Printing/Forms 1 1 2-3 2-3
Vendor Management -- 3 5-6 5-6
Travel 1 1 1 1
Technology 3 3 3 3
AVA 6 12 12 12
----------------------------------------------------------------------------
Current Estimates 23 37-38 46-49 48-51
Original Estimates 24-26 33-37 39-46 40-50
21-23 net of transition costs
Expense savings will be reinvested in initiatives to enhance top line growth,
technology and other operations
4 RELIASTAR
- --------------------------------------------------------------------------------
Page 2
<PAGE>
- --------------------------------------------------------------------------------
Changes to Employee Benefit Plans
----------------------------------------------------------------------------
Description:
. Pension plan frozen
. Employer match added to 401(k) plan
. Employees' medical and dental premiums increased
. Changes align RLR with competitors
Update:
. Fully implemented 1/1/99
. Annual cost savings: $12 million
. Continue to evaluate benefit plans for competitiveness and
savings opportunities
5 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Printing and Forms Management
- --------------------------------------------------------------------------------
Description:
. Transition printing from external vendors to internal facility
where cost effective
. ReliaStar supplying paper for external print jobs
. New enterprise-wide paper contract effective 8/1/99
. Nearly $1 million savings from change in prospectus printing
and forms management strategy
Update:
. Completion expected in 2001
. Estimated annual cost savings: $2-3 million
. Study underway to further reduce costs for printing
fulfillment and forms management
6 RELIASTAR
- --------------------------------------------------------------------------------
Page 3
<PAGE>
- --------------------------------------------------------------------------------
Vendor Management
----------------------------------------------------------------------------
Description:
. Implement a formal purchasing program
. Identify "target categories" of external spending (e.g., 1999 targets:
temp. staffing and IT contractors)
. Achieve savings of 10-20% on target categories
. Reduce time spent in purchasing goods and services, reduce transaction
costs
Update:
. Completion expected in 2001
. Estimated annual cost savings: $5-6 million
7 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Travel Management
----------------------------------------------------------------------------
Description:
. Enterprise-wide travel policy revised 1/1/99
. Centralized travel reservations management and reporting
. Compliance and monitoring reports used to manage costs and adherence
to travel policy
. Reviewing travel vendor contract
Update:
. Fully implemented 1/1/99
. Cost savings : $1 million in 1999
8 RELIASTAR
- --------------------------------------------------------------------------------
Page 4
<PAGE>
- --------------------------------------------------------------------------------
Technology Spending
----------------------------------------------------------------------------
Description:
. Net decrease: $3 million from 1998 ($9 million below original plan)
. 1999 spending for tech. support, maintenance and depreciation limited
to 2% increase over 1998
. Review process ensures that investments in strategic projects enhance
enterprise revenues or reduce operating costs
Update:
. Timing of savings: 1999 - 2001
. Annual cost savings: $3 million
9 RELIASTAR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Process Reengineering (AVA)
----------------------------------------------------------------------------
Description of Activity Value Analysis:
. A process for evaluating operations, prioritizing resources and
reducing costs
. Department heads perform systematic analysis and develop cost
reduction recommendations
. Worksite Financial Services and corporate areas have completed the
process
. Tied into customer service consolidation for Individual businesses
Update:
. Expected timing of savings: 1999-2001
. Total estimated annual cost savings of $12 million
. Additional AVA phases under consideration
. Implementation of Activity Based Costing (ABC) and Benchmarking
starting in 1999
10 RELIASTAR
- --------------------------------------------------------------------------------
Page 5
<PAGE>
- --------------------------------------------------------------------------------
Activity Based Costing (ABC)
----------------------------------------------------------------------------
ABC management:
. Used as a tool to ensure continuation of AVA discipline
. Presents strategic view of operating costs
. Provides information about the true cost of doing business
. Facilitates accurate product pricing and profitability reporting
ABC implementation initiatives:
. Minot Service Center - to measure financial performance
. Corporate IT - improve cost allocation methods
11 RELIASTAR
- --------------------------------------------------------------------------------
Page 6
