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.