Insurance planners face a challenging and changing business landscape, given their industry's regulatory nature and the growing consolidation between the insurance and financial services industries.
To determine how they're coping with those pressures, Successful Meetings Contributing Editor William Ng discussed the sector with a diverse panel of experts. Those who provided perspectives include one insurance planner, two incentive house executives, a top official of an insurance and financial services planners association, and a hotelier.
SM: Are there issues surrounding the Sarbanes-Oxley Act that are particularly important to insurance companies and their meeting planners, as opposed to other types of companies?
Bill Boyd, president/CEO, Sunbelt Motivation & Travel Inc.: Sarbanes-Oxley is impacting companies' incentive budgets. Especially for small-cap companies, the amount of money that they have to spend to bring themselves in line is influencing the amount of funds available for incentive programs—this is a new expense. For large insurance companies, it is having an impact, not just financially but also on their ethics and responsibility to shareholders. CEOs must consider whether their incentives are prudent.
Stephen O'Malley, vice president and financial services sector leader, Maritz Inc.: The biggest effect on insurance meetings is budget control with the ability to tie back meeting effectiveness to meeting spend. Even though Sarbanes-Oxley has gotten a lot of play in the mainstream press, it's really the overall strict regulatory atmosphere in insurance and financial services that has our clients seeking [unambiguous] terms and transparent agreements for meetings. There is renewed focus on helping our clients mitigate their risk.
Steve Bova, executive director, Financial & Insurance Conference Planners: When you continually hear about very large insurance or financial companies being investigated for improprieties or questionable practices, it just confirms the need to be financially prudent. All companies, not just insurance and financial services, need to take their fiduciary responsibilities seriously and follow best practices outlined in Sarbanes-Oxley.
SM: What kinds of trends are you seeing or hearing about in terms of destinations worldwide for insurance incentive programs?
Mary Keough-Anderson, manager of conference and meeting management, Liberty Mutual Insurance Group: With more spouses being invited along on incentive trips, spas are popular. The hot spot for us in the past few years has been the JW Marriott Starr Pass Resort & Spa, in Tucson. Golf and fishing remain big. The most popular destinations are still Hawaii, Florida, Arizona, and the Caribbean. This year, our elite winners will visit Athens and the Greek Islands. But international events are still contingent on the value of the dollar.
Pam Ferguson, director of insurance sales, The Ritz-Carlton Hotel Co.: Right now, the focus is on spas, especially for couples; they're more popular than golf. Interest in European travel is ramping up. Italy is on planners' minds, and Spain is always high on their radar screens. Barcelona is attractive to all age groups and always offers "sizzle."
Bova: Companies are always looking for something new and exclusive. Cruises, Mexico, and Costa Rica are increasing in popularity. Of course, there's always a buzz when new, top-tier properties or destinations come on line.
O'Malley: The primary focus is on domestic travel. This year and next year will be such a seller's market for hotels that we hope our clients will have flexibility with their destinations and dates of availability.
BOYD: The hot area is the new properties in the Caribbean, and Hawaii continues to be a prime destination. The value of the U.S. dollar is having a negative impact on demand for European destinations, but there are bargains to be had in Portugal, Spain, and the Czech Republic. Beijing is popular because of the upcoming Summer Olympics, and New Zealand is still a draw. International incentive travel is rebounding.
SM: How far have insurance planners come in terms of their recognition as executive-level members within their companies?
Keough-Anderson: The goal of our department is to be viewed as a business partner with other strategic business units in the company. We have 200 or 300 ad hoc meetings that aren't being created through our department. We [recently rolled out] a new electronic system that will unify preparation and manage all aspects (RFPs, contracts, etc.) of our meetings, and we will encourage all departments to use it.
O'Malley: Their recognition has improved and will continue to do so. Education has really helped company executives understand the role of meeting planners and has professionalized the meetings industry. The whole movement of understanding how meetings and incentive programs tie into the overall success of a company has been important.
Ferguson: Senior leadership is realizing, more than ever, that meeting planners now are critical to the success of both meetings and incentive programs for companies. As a result, the industry has become highly professionalized and respected.
Bova: We're seeing planners having opportunities to become more strategic in their roles; however, it really depends on the planner and the company's size and structure. It's difficult for planners to balance the tremendous amount of logistics necessary to plan a meeting with being strategic. Our members often get stuck in the logistics factory and aren't given the opportunity to step out of that role, due to high expectations and relatively low staffing. It's definitely an evolution.
SM: How do you feel about the name change of the Insurance Conference Planners Association (ICPA) to Financial & Insurance Conference Planners (FICP)?
Boyd: The name change is an extremely great move. The FICP had to do something to increase its membership base. The association has to serve its members, but it needed to expand too.
Keough-Anderson: It's a great idea; it will increase membership. The organization definitely needs to incorporate financial services planners, and it should've done it a long time ago. Insurance and financial services are very similar, and there is synergy between them.
Ferguson: Change is always difficult to embrace, but I think it's great and the right direction for the organization. More companies are getting involved in portfolio management, so more planners are getting involved with financial meetings as a result.
O'Malley: I think it's forward-looking. [Both industries] face the same regulatory challenges. FICP should even include third-party planners. It would be beneficial, because together we would have a bigger voice concerning industry issues.
SM: Have your budgets and programs changed?
Keough-Anderson: Budgets are remaining flat, and it's tougher to negotiate, with room demand up by four percent and supply only one percent. We're looking for win-win situations with hotels.
Ferguson: Budgets are staying about the same. Planners are expected to do more with less, and it's a constant challenge for them. Some companies' programs are growing. Program activities remain consistent, but with brokers being a big part of the distribution systems, insurance companies are coming up with unique destinations and program themes to entice them. Insurance companies are always trying to come up with something exceptional.
O'Malley: With mergers and acquisitions and baby boomers aging and moving toward retirement, insurance planners must consider more closely the length of incentive trips and the types of activities in their programs. Budgets have increased and will continue to do so because of consistent incentive trip demand and the need for seminars and education and training programs as new financial products come on line. Incentive travel remains an important part of the employee-recognition system.