clear communications“Communicating clearly and in a comprehensive manner to retirement plan members is more critical today than ever before.”Dan Houston, Sr. VP, Retirement, and Investor Services, The Principal Financial Group

The Principal Financial Group Case StudyXerox Insurance and Financial Services

Xerox solution enables clearer, friendlier andless costly customer communications.

Client ProfileHeadquartered in Des Moines,

Iowa, The Principal Financial

Group has more than $117 billion

in assets under management

and serves more than 13 million

customers worldwide from offices

in Asia, Australia, Europe, Latin

America and the United States.

The Principal Financial Group is

the leading 401(k) plan provider

in the United States based on

total number of plans. In the

United States alone, The Principal

Financial Group provides 401(k)

solutions to 46,000 employers

with 2.8 million employee

members. This Fortune 500

company has been ranked 65th

in Information Week magazine’s

“Top 500 Most Innovative Users

of Information Technology.”

The ChallengeThe Principal Financial Group mails millions of statements, or BenefitRetirement Plan Reports, for 401(k)accounts managed by the company�sretirement services business unit. Themailings contain information subject toregulatory requirements and contractualagreements specifying when the state-ments must reach account holders�quarterly, semiannually and annually.

According to Dan Houston, senior vicepresident at The Principal, the currentBenefit Retirement Plan Reports were not supporting his department�s businessgoals: to retain current plan customers, tobuild loyalty and expand the customer base.

�We knew from customer feedback that members wanted more than just their account breakdown,� Houston said.�They wanted information to help them better understand and utilize their retirement benefits.�

Time for a new look.To gain a competitive advantage andimprove communications with its customers, The Principal decided to convert from legacy workflows for black-and-white 401(k) statements toAdobe PostScript® color printing with full variable data.

The Benefit Retirement Plan Reports typically contained no graphics, were

to original thinking and new technology,�Houston said. �The ability to meet ourdemands for our clients was absolutelycrucial, and Xerox fit the bill.�

Technology and a consultative approach provide the solution.According to Rex Brooker, manager of the Document Automation Team at The Principal Financial Group�s print/mailfacility, the Xerox team successfullydemonstrated its understanding of themost intricate details of the project.

�Xerox understood our needs and limitations, as well as our customers�business requirements,� Brooker said.�Their involvement throughout the entire evaluation process led to a seamless installation and implementationof the solution.�

As part of that solution, Xerox workedclosely with the creative team from The Principal Financial Group and other third-party enablers, such as Group One, in developing the look and content of the new BenefitRetirement Plan Report.

Xerox installed a total of nineDocuColor® 2060 printers with EFIFiery® color controllers and Bell andHowell® inserter tools within theAutomated Document Factory. Xeroxcolor engineers trained several operatorswhen the first machine was installed and returned to provide additional training and support throughout the trials and initial real print runs.

heavily text-based and had a generic look that lacked impact. Most customersdid not comprehend or want the transac-tion-level details that took up so much of the numbers-driven statements.

The statements also had to be producedunder very tight time constraints. AngelaEllis, vice president, Retirement andInvestment Services Business Systems,explained that there is a narrow windowbetween the end of a reporting period andwhen the Benefit Retirement Plan Reportmust be in the hands of the customer.

�We have 10 business days at the end of each quarter to mail,� Ellis said.�Given the volume of statements, an efficient process is essential.�

Keeping it all in-house.The Principal wanted to leverage itssophisticated Automated DocumentFactory, which Xerox helped set up five years ago.

�Our service levels were going to be very high with volume peaking duringvery specific periods,� Ellis said. �Sincewe can�t smooth our volume out over 12months, we needed the guaranteed supportof the printing facility at those times.�

The SolutionAfter comparing options from multiplevendors through an RFP process, ThePrincipal selected Xerox as its partner.

�We�re pretty innovative and we wanteda partner that had our same commitment

Recognized for “Excellence inFinancial Communication.”The newly enhanced BenefitRetirement Plan Reports have been so effective that they recently received the DALBARCommunications Seal of Excellence.DALBAR is an independent financial services research firm that provides customer satisfactionratings or many elements of customer interaction. The award is a mark of excellence and is only awarded to companies that surpass a level of consumer servicethat is exceptional in the industry.

The award noted that The Principaltakes retirement plan statementreporting to a new level by using it not just as a document of accountvalue and changes, but also as aneducational tool to help participantsunderstand their investments and make better decisions.

N E W S O F N O T E

�One of the key factors in our strong partnership with Xerox has been theirresponsiveness,� Brooker said. �Whenwe�ve had concerns, they�ve been able to solve the problem without negativelyaffecting our turnaround times or abilityto do the job for our internal customer.�

The Challenge:• Improve quality and reader

comprehension of Benefit Retirement Plan Reports via full-color 401(k) statements

• Build loyalty and expand customerbase by providing a service that other companies don’t

• Provide cross-selling opportunitiesfor Principal products

The Solution:• Implementation of a state-of-the-

art full-color personalized client communication process

The Results:• New, full-color, variable information

statements are more informative and easier to read than previous offset and laser printing solution

• Very favorable response from customers

• Lower customer service costs

C A S E S T U D YS N A P S H O T

The Results�The Xerox solution has lowered ourcosts in terms of cutting the number of phone calls that our Client ContactCenters are receiving,� said MonicaKirgan, managing director in RetirementInvestment Services. �We associate thedecrease in call volume with the moreuser- and reader-friendly statement.�

In the new Benefit Retirement PlanReports, customized graphics and text are automatically created for each individual account holder. This personalized information, along with necessary generic text, is then printedinto the statement template, creating a uniform look that is still specific toeach account holder.

Additionally, a PDF file is generated and posted on The Principal�s Web site.Customers can go there at any time to view their personal statements.

The length of the Benefit Retirement Plan Reports has also changed. The documents previously recorded lots oftransaction-level detail that the majorityof account holders did not want. The

© 2004 XEROX CORPORATION. All rights reserved. XEROX®, The Document Company® and DocuColor® are registered trademarks of or licensed to XEROX CORPORATION. All other trademarks are the property of their respective owners. 02/04 610P710200A 36 USC 220506

new statement provides a four-page summary of the client�s 401(k) activity,including all necessary point-in-timeinformation. Account holders who want complete details can review theiraccounts on the Web site.

Members favor the new format.The new Benefit Plan Reports have generated very favorable responses from The Principal�s customers�themembers of 401(k) plans who receive the statements. The consensus is that this newly colorized and redesigned statement prompts people to review their benefits plan, and the easier-to-readformat helps them to better understandthe dollars they are saving for retirement.The overall results contribute to customerloyalty and retention.

�By enabling us to provide more usefulinformation in a timely manner, Xeroxhas helped us to meet the needs of ouraccount holders and improve customerrelationships,� Ellis said. �Along withpleasing our clients, the addition of color and customized graphics has givenour sales force a significant advantage.�

For information on the advanced solutionsand services that Xerox can provide, call1-800-ASK-XEROX, ext. FSHC or visitwww.xerox.com/financialservices