Insurance Meetings: The Party's Over

When Successful Meetings asked the insurance agent whether the meeting he'd attended recently was held at a "nice" property, he immediately got defensive.

"What, they're gonna hold it at a Motel 6?" he snapped. "What kind of story is this? What publication do you write for, anyway?"

As it turned out, his mistrust was not unfounded. As SM quickly learned, the insurance industry is under fire from several directions, most notably lawmakers, the mainstream media, and the public. "We have an image issue right now," the organizer of a major insurance conference said delicately. "It's not a good time to do this story—can you put it on hold?"

Well, no. Deadlines are deadlines, but fortunately, SM managed to find some insurance-industry insiders willing to talk. Here's the lowdown on what's going on in their world right now—and how it's affecting their meetings.

Under Scrutiny

A couple of years ago, when New York Governor Eliot Spitzer was state attorney general, he sued several insurance carriers for bid rigging, improper compensation, and other legal and ethical violations. At more or less the same time, some property and casualty insurers (most notoriously, State Farm) were sued by policyholders in Louisiana and Mississippi after the companies denied compensation, claiming their policies did not cover flood damage from hurricanes Katrina and Rita. Their apparent unwillingness to help flood victims rebuild after one of the worst natural disasters in U.S. history drew the ire of the public—and the attention of lawmakers.

Thus there is now pressure from Congress for federal regulation of the industry. (Insurance is already regulated at the state level, but some insiders say federal oversight would be more stringent.) And even though the aforementioned events aren't relevant to all—and maybe not even to most—insurance-meeting planners, a public perception of guilt by association makes them reluctant to talk to reporters about what goes on at their conferences. As one independent planner put it, "Everyone wants to be perceived as doing the right thing and not overspending."

If the threat of regulation hasn't directly affected meetings yet, it certainly has planners' attention. "We're monitoring the situation," says Sherri Lindenberg, who plans meetings and incentive trips for BISYS Insurance Services in Roseland, NJ. "We're aware that there may be changes coming, and we're staying on top of things to see if we'll be getting additional federal guidelines."

In the recent past, meanwhile, insurance meetings have clearly been cash-happy places to be. A recent survey conducted by SmithBucklin for the Financial & Insurance Conference Planners, in Chicago, found that, in 2005, insurance and financial services companies spent an average of nearly $900,000 on their largest gathering, usually a three- to four-night affair with an average attendance of 512 people. That works out to nearly $1,700 per attendee, or considerably more than some companies spend on incentive travel awards.

And plenty of schmoozing does go on at these get-togethers ("Of course it does!" scoffed the aforementioned insurance-conference planner), although the amount of that depends on which insurance agents are present—independent agents or so-called "captive" agents. Independents sell insurance products from a variety of different carriers, whereas "captives" work for one carrier and sell only those products.

For insurance carriers, meetings provide the perfect opportunity to network with the independent agents who sell their policies and products. Each carrier would like to win the agents' loyalty by showing them a good time, which they hope will indirectly influence the agents to sell that carrier's products, as opposed to those of the other carriers they work for. So, not surprisingly, independent agents get treated quite nicely at these conferences.

"They go on a lot of junkets," confides an insurance-company consultant. "I know one guy who runs a small independent insurance agency, and every other month he's jetting off to play golf somewhere, and he's not paying for it. They go to Colorado to ski, to South Carolina to golf, and they stay at very nice resorts."

Not that you'd know that from talking to them directly. When SM asked the agent quoted at the beginning of this article if he was going to be meeting with any carriers at his upcoming conference, he equivocated. "They take us out to dinner and stuff like that, but no, I have no plans for any side meetings," he replied. Still, he admitted that at last year's meeting, he had "met up at the bar" with some carriers. "It was just hanging out, you know, with people you run into at the conference."

"ALWAYS BE CLOSING"

There's a deeper dynamic at work in the industry, one that is directly affecting how meetings are being done (as opposed to merely making planners and attendees reluctant to talk about how meetings are being done). You might call it the "Caveman Effect" or the "Lizard Factor"—references to those memorable TV ads from GEICO insurance.

Fierce competition from direct insurers like GEICO (which service consumers directly rather than through insurance brokers or agents, as traditional carriers do) is causing a "seismic change" that is "shaking" the insurance industry, according to Mark Green, president of Performance Dynamics Group in Green Brook, NJ.

"For the first time in a long time, insurance agents have to justify their value," declares Green, a consultant, speaker, and meeting facilitator for a number of insurance companies. "Those changes drive the need for meetings. The companies behind the agents have to help their people lose the order-taker mentality and get the I-need-to-go-after-the-business mentality."

How do they do this? At a sales gathering Green recently facilitated for a Fortune 100 insurance firm he did not want identified, he shocked audience members out of their complacency with a surprising declaration. "Almost none of you are going to get anything worthwhile out of this," he told the agents bluntly. "People don't hear someone give a speech and then months later have it impact their business, because that's not the way humans learn. The odds are stacked against you, so if you want what I say to affect your results you'll have to try really, really hard."

That Patton-esque speech set the stage for attendees to bridge the gap between listening to a speech and changing their behavior, Green explains. It was a jumping-off point for two days of workshops on personal responsibility, time management, awareness of how one's thoughts and behaviors impact the bottom line, and other topics. These all tied into the meeting's objectives, which were to open up lines of communication, get agents to be more proactive about going after business, teach them how to manage their time better, and give the company's leadership the chance to talk about their commitment to change.

Green says the approach was effective—and he has the numbers to prove it: "Based on the survey we did afterward, the average rating people gave the meeting on a scale of one to five was 4.6," he notes. "People came up to me afterwards and said, 'I've been exposed to many of these ideas before, but somehow the way you got us to think about them was so different,' " he adds. "That means I'm succeeding in cutting through the clutter."

If his experience is any indication, other planners may also start to change the way they do business. "Insurance firms that used to be okay with fluffy, feel-good content are now more open to having a hard-hitting agenda," says Green. "They're realizing that it's not at the expense of fun. We have a great time, but it's a different tone and message, one that's much more likely to translate into different behavior than if they went the usual motivational- speaker-and-entertaining-teambuilding- exercise route."

He sums up: "Spending thousands of dollars and taking agents away from their customers to get them pumped up doesn't hold as much weight as it used to. People are more receptive to looking for a way to find return on investment instead of saying, 'Yeah, we need to do an event, and we just hope we get what we want out of it.' There's too much money being thrown around to rest on hope."

Originally published June 01, 2007

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