Feature

Meetings South, December 2008

Policy Changes

by Judy Jacobs

Insurance conferences and incentives are evolving thanks to a variety of factors, from the economy and air service cutbacks to lifestyle changes. These changes are forcing planners to carefully re-examine the way they do business and make changes to realign their programs with decreased budgets, public perception and employee values.

In order to get an update on what insurance industry planners are doing and where their meetings are headed, Meetings South consulted insurance company planners Karen Knox at Blue Cross and Blue Shield of North Carolina, Durham, N.C.; Cindy Wheaton, manager of group meetings and incentives at Nationwide Financial Network, Columbus, Ohio; and Brent Barrowman, vice president of conferences and travel management at American Fidelity Assurance, Oklahoma City.

We also sought insight from veteran independent incentive planners Andjela Kessler at Incentive Travel and Meetings, Atlanta; Jessica Woodard, director national corporate accounts at ADI Meetings & Incentives Inc., Tempe, Ariz.; and Steve Bova, executive director, Financial & Insurance Conference Planners, Chicago.


What sorts of trends are you seeing as far as insurance meetings and incentives are concerned?

Kessler: Smaller groups and smaller budgets, and meetings are more a part of it. Content is more serious. There is more of a training component and there is more motivational programming. While in the past they may have done something that was pure entertainment, now they will have a motivational speaker. We are not going for as big of a name because of the cost involved, but they must have meat. It’s more educational and less entertainment.

Knox: We changed our incentives to a rewards program as our internal budgets got tighter and as the industry regulations and the corporate feeling about incentives is changing. We did it this year. We now reward the agency instead of the individual. That allows the agencies who consistently win to spread that reward over their agency instead of just to one individual who always wins. The agency can decide who they want to recognize and to send to the program. It gives us a whole new clientele to work with.

Another trend is to provide opportunities for fitness or some type of relaxation. We have fitness breaks at least once a day. You get up out of your chairs for a 30-minute demonstration of exercises you can do at your desk. We can do early morning walks and have exercise options in the afternoons. We bring a fitness coordinator and a nutritionist to all of our major meetings. People can have one-on-one fitness assessments or one-on-one nutritional counseling. We have a major contract with Healthy Diets Inc. and MediFit to do these.

Woodard: The most current trend I have noticed with my insurance clients is their desire to keep the integrity of their programs by cutting costs on physical travel. They are bringing their international programs domestic and their domestic programs to the specific region of their headquarters. The thought process is to cut travel costs, travel time and to keep their budgets within the U.S. dollar. This allows the client to seemingly keep the quality level of their programs while providing savings to their budgets. I’ve also noticed that the decision-makers are more willing to think outside the box. For example, holding a farewell dinner in a remarkable venue rather than spending on decor or choosing a walkable dinner venue and upgrade the menu rather than spend on transportation.

Wheaton: The effect of the market. We’re on the financial side of the business. We haven’t seen the impact yet, but now I’m preparing for the impact of that. I’m thinking about where to cut corners for future events. I don’t see much change in my budget for 2009, however, so I don’t know when that will happen.


Are there changes in terms of where groups are going? Are they going to closer destinations? Are meetings more regional?

Kessler: For the most part they’re being held totally outside of Europe—except for Portugal—because Europe’s gotten too expensive. We had something in Italy not long ago and Portugal. There is much more going on in South America, in Brazil, Argentina, Ecuador, Chile. Chile is particularly popular. It gives you cultural experiences as well as high-end adventure.

We’ve been in business for a long time, and our forte is international. We’ve always been about 80 percent international. In the past year we have gone down to about 60 percent international. A lot of our clients have switched from international to domestic, because of the economy.

Knox: I have experienced that meetings are becoming more regional. The airlines and the crazy schedules they have play into the fact that meetings are moving regional. Also the cost and uncertainty of flights is a factor.

Bova: There is a trend toward moving away from international meetings, but contracts are signed a couple of years out, so we’re not seeing the impact of that yet.

Wheaton: We don’t want our attendees to have a lot of flight or travel time, so we’ve tried to stay in Canada, the U.S., the Caribbean, Mexico—places that are within a five-hour flight.

Barrowman: We’re staying closer to home because of the economy and the airlines cutting back on the number of flights to certain destinations. It all has an impact on how you plan meetings for the future.

Our incentives are usually in the Americas—Caribbean, Mexico, Canada. The strength of the U.S. dollar against foreign currencies is making international trips difficult.

Our destinations change more because of airlift. We have restrictions on how many people we put on the same plane. If we go to a destination where you have a limited number of flights, we have to follow company safety standards. There are occasions where we had to bring people in two nights before to attend a meeting, because we had to split up the group. Say you went to San Diego, you might have people coming from small-town America, but they’re all hooking up at a big city like Denver or Chicago. If it’s management staff, it’s based on who the management is. Certain people can’t fly with others. We also split up the sales force. It has to do with rank.


Are group sizes changing?

Knox: We’ll do divisional instead of departmental meetings. We’ll go from a 100-person departmental meeting and combined three departmental meetings into a 300-person regional meeting. The message has to be heard by more people. We’ve become a more fluid organization. You can no longer work in silos. Everybody needs to know what everyone else is doing. You all need to be on the same page.


Are programs getting shorter?

Kessler: Meetings are shorter. In the past we may have done six nights. We’re more likely now to do five nights.

Knox: Yes. We would drop a day of perhaps a softer program and tighten up the agenda, making maximum use of our time. We’re conscious of people’s time away from their work and family and also do it from a budgetary standpoint.

Woodard: The duration of the meetings is getting shorter. What used to be a four-night incentive is now a three-night or weekend incentive.


What are groups doing for activities? Are there any new things? Is anything passé?

Kessler: The major trend is that we are offering more variety, more options. In the past you would have the whole group doing one and the same thing. Now they’re expecting more of a menu to choose from. While one person is at the spa, another is learning to sail or going to an Indian village. For us, it’s much more work because we have to present more options.

Woodard: More and more we have seen the desire for the attendees to have individual activity options to choose from rather than hosted group tours. Lately, my clients have been stating a preference toward nontraditional tours instead of the typical tourist activities.

For example, a client recently had a program in New York City. Instead of having lunch at Tavern on the Green, we proposed for them to have a cooking demonstration and lunch in Jackie O’s private chef’s brownstone. They are looking for more-social settings such as having dinner in a restaurant’s public or semi-private dining area rather than a private room. Meals at the hotel in banquet rooms are done only because of food and beverage minimums. However, they prefer off-property venues or nontraditional function spaces.

Wheaton: If you go to the desert you have to do a jeep tour. If you go to Florida you have to do the Everglades tour. For the Presidents Club (the company’s top incentive program), we did a winter program for the first time—in Banff—and we were able to do dogsledding. That’s something they don’t usually get to do. I try to find something unique in the area.

Barrowman: What we’ve found is that most people nowadays are getting away from the active trips. They’d just as soon as go away and chill. A lot of the younger people just want to hang with the others. There’s a little bit more bonding. In the past you’d have a group of 300 and an activity such as golf and 100 people would show up. Now you may have 60.

How about food and functions—do you see any changes here?

Kessler: As far as functions, we’re going more to bite-sized servings of a variety of foods—and stations. Not as many sit-down banquets. Younger people don’t like the banquet setup. It’s kind of old-fashioned.

Knox: We’re seeing healthier meals, as well as people not wanting to spend their evenings sitting in a bar. Nightlife has changed. People still want to network. The focus is now on hospitality suites with coffee stations instead of a bar and a band.


How concerned are insurance companies about perception these days—about going to a fancy resort or appearing too lavish?

Kessler: This presidential election has had an effect because the insurance industry is very much in the media because of healthcare plans. Therefore the profile is high and there’s a need to tone down on the lavishness.

We’ve been seeing this in the past four months. When Obama was campaigning against Hilary Clinton is when that issue really came into the media and has not gone out of the picture still.

Knox: We’re changing our hotels in response to perception. As a professional planner I can negotiate a really good deal with any hotel, but people don’t care if you paid $100 or $200 per night, all people care about is that Blue Cross went to a five-star hotel. So we are toning it down. We don’t go to any of the big-name brands any more. There are some great lesser-known private brands that provide an exceptional experience. If we go to the Marina Inn at Grande Dunes in Myrtle Beach [S.C.], for example, people might dismiss it, but it provides an exceptional experience.

Barrowman: We’re very cognizant. Perception is reality. No matter how you try to position yourself, it’s always open to interpretation. You need to be sensitive to the climate in which you are working. Don’t do things that you wouldn’t normally do. We watch where we’re going. You want to go to a place where you can attain the goal, whether it’s education or whatever. You look at the goal and work backwards. We talk about it a lot more, but we’re not really cutting back.


What does the current economic climate mean for insurance meetings and incentives?

Kessler: Most of our programs are now more culture-focused. Let’s say we’re in Chile. Where before we might have done something lavish like a big theme party, now we might go to Atacama, to the desert, and talk to the people. Experience real living. Bike down a volcano. Hire an astronomer to talk about the stars rather than have a very elegant theme party, which costs a fortune. Or go to a vineyard and have a competition. We’ll divide them into groups and they’ll mix wine to come up with their own bottle and have a professional from the vineyard judge the best wine.

Bova: In general, good business sense is that you want to make good judgments no matter what the economy. You want to do things in accordance with the values of your company. In down economies there’s a need to get people together for training. This is the time when people need organizations the most to know what’s happening outside of their companies. Be careful. Don’t make short-term decisions. Make long-term decisions.

Wheaton: With what’s been in the news lately, we really try to be sensitive to that, especially when they see companies laying people off in certain departments. We have to be careful about what we send out for promotional campaigns. We try not to be too over-the-top. With the exception of our President’s Club program, we’ve kept spending conservatively.


Are there any government or industry regulations that are making insurance meetings more complicated to plan?

Knox: Yes. There is reporting that governments and the department of insurance are requiring that has changed the way we offer gifts or any type of recognition. At some of our government meetings we have to charge people for any F&B they consume. If a person sits on a governmental agency, I have to report that to the state auditor through the North Carolina Department of Insurance.

Wheaton: New York has always been a problem for us, as far as having brokers attend. It seems to be the problem child. You have to be careful about contests you run there. They’re limited in what they can receive. New Yorkers can’t receive more than $1,000 per year in cash. They can attend an incentive, because it meets the requirements of having a meeting, however.

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