If the past 18 months have brought a hurricane of perception challenges sweeping through the meetings industry, then it is the insurance segment that has been squarely in the path of the storm. But even though many say things may never be the same, there are rays of hope on the horizon.
In fall 2008 the insurance industry was handed a blow of a particularly painful kind when media attention zoomed in on AIG’s lavish incentive spa weekend, just a short time after its government bailout. As the backlash spread throughout the insurance meetings industry, gatherings started disappearing from sight.
"We haven’t really seen a lot of insurance business for the last year and a half or so," says Jim Mills, general manager of the Houstonian Hotel, Club & Spa in Houston. "It started to fall off even prior to the AIG meeting. We used to do several training and recreation-based meetings, but then it all stopped.
"The scandal with AIG has had implications far beyond the insurance industry," he adds. "We have seen group travel decline in the last year as companies fear the political backlash of doing lavish events on the shareholders’ dime."
The Status
To gain a concrete sense of what is going on in the insurance meetings world, Financial & Insurance Conference Planners (FICP) surveyed insurance planners about the state of their industry at the association’s annual meeting last November.
"We talked to 100 insurance and financial planners and asked them a few questions about insurance meetings today," says Jan Hennessey, CMP, CMM, FICP board member and Berkeley, Calif.-based independent meeting planner.
When asked if their business was getting back to normal and if meetings were being rebooked in 2010, about 60 percent of the planners said their meetings were getting back on track.
In answer to a question about what their budgets were looking like for 2010, about 90 percent of the planners "said they were dealing with flat budgets and are planning meetings with what they had in 2008," according to Hennessey.
In answer to a question about whether or not they were taking meetings to international locations, only about 20 percent of the planners said they planned to meet overseas.
"Companies are not doing the kind of extravagant meetings that they used to," Hennessey says. "On-site, we are trying to manage the risk of exposure. We don’t plaster logos around the hotel. We try to keep meetings low-key."
She adds that perception problems associated with the insurance industry have led some planners to ban the word "incentive" from their vocabulary.
"The word ‘incentive’ is not being used," she says. "We call them brokerage programs or reward programs. If a company has one of these programs, almost everyone is taxing the recipient for their wife for the trip. It is compensation; it isn’t a present."
Limited Luxury
Insurance meetings, whether training-focused or incentive, in the past have largely been held at luxury properties. Not so much anymore.
"Insurance companies are booking venues just below luxury," Hennessey says.
Lance Peters, director of sales for the Four Seasons Resort and Club Dallas at Las Colinas, has felt a significant shift in his group bookings.
"Generally, insurance is one of the top 10 industries we do business in," he says. "Within the past 12 to 18 months, changes in the economic climate have negatively affected the amount of insurance business we have seen here. Being a luxury property with all the things that happened in late 2008, we saw a reduction in some of our insurance business."
These days, Peters says planners are focused on a few key things.
"There is a lot of pressure for value pricing and value adding to programs with concessions and things," he says. "The insurance planner is under pressure to show the value of what they are getting. There is also a greater sense of accountability on the insurance company side to do a prudent search for a venue. Everyone is pretty cautious right now to move forward."
While late 2008 and early 2009 may have been a dark time for luxury resorts, Peters anticipates improvement.
"It is better now than it has been; there are still people coming to the resorts," he says. "The last six months have been better than the six months before that. For this year, our expectation is that it is going to be slightly better than 2009. We don’t perceive any big changes in the next 12 months, but for 2011, we are hopeful.
"I think it will cycle back," he adds. "I think the word ‘resort’ will not be a bad word anymore. We’ve seen this with other industries. It will be cyclical."
Trends
Reluctance to book resort properties has led planners to book alternative locations.
"Many meetings [have been] relocated to city or airport locations rather than resort properties," says Steve Bova, CAE, FICP’s executive director.
Jessica Phillips, director of worldwide accounts for Hyatt Hotels & Resorts, says the hotel side of the business has felt the shift.
"We’ve seen a huge pickup in our airport hotels," she says. "People want to come in, have a meeting and fly out. Meetings are getting smaller and shorter, but there are still meetings. There are more meetings in second-tier cities like St. Louis, Jacksonville and Denver—a lot in the central U.S. because those places are just easy to get to."
While the challenges associated with defending meeting expenses are nothing new, Phillips says planners are now working even harder to bring meetings to the front of executives’ minds.
"Planners are trying to educate their executives more on what meetings bring to the whole organization," she says.
Dan Young, CMP, FICP’s president-elect and director of event planning and field recognition for Thrivent Financial, says some of the biggest trends he’s seen in the insurance industry include meeting consolidation.
"A lot of companies have consolidated meetings," he says. "[In 2008] we had two major events and consolidated them into one national sales meeting. We invited our national sales force to come in for a massive training effort. It was the first time we had ever done that and we are going to do that every year from now on. We were able to use fewer dollars but deliver an event that had higher value than the other two events [held previously].
"On the incentive side of our business," he adds, "we’ve also reconstructed the entire field recognition and conference program. We’ve gone from three major incentive conferences to one conference. A lot of companies are eliminating smaller, ad hoc meetings. They are trying to get more focused on the dollars spent."
A strengthened focus on accountability is another trend felt in the insurance market. In the past, Young says he was expected to meet the needs of his boss and his boss’s boss, but times have changed.
"We are not only accountable to our own supervisors, but also the entire executive team, board of directors, stockholders and customers," he says. "We have many, many more constituents that we have to think about when we plan meetings, events and incentives for our salespeople."
Shrinking budgets and an increased focus on ROI are other concerns with which insurance planners are grappling.
"One of the biggest issues planners are facing is being able to help their companies accomplish what they need to in their meetings," Bova says. "They need to be more creative. Meetings need to take place, but if their budgets have been reduced, they need to accomplish the same things with less money."
He notes that with responsibility comes opportunity.
"Meeting planners need to measure the return on objectives, asking themselves, ‘Did we do what we wanted to accomplish in this meeting?’" he says. "By rising to these challenges, it has elevated the position of the meeting planner to become more involved in strategic positions within their companies.
"The need to meet has not changed, but the culture of meetings, the importance of the meeting planner, has been strengthened," he adds. "People have become more sophisticated in their jobs and those who will be most successful will be able to feed off each other and be creative in what they are doing."
New Landscape
After the storm of the past 18 months, the insurance meetings industry is emerging with a new landscape.
What does it look like?
Hennessey offers some predictions.
"I think 2010 will be better than 2009," she says. "I think meetings are going to be on their way to a new kind of normal. Some meetings that were canceled, if they weren’t absolutely key to success and revenue drivers, may not come back. But the ones that are tied to sales channels probably will."
She also predicts that virtual meetings technology will become an important part of the mix for education meetings, enabling organizations to extend the reach of training programs.
Whatever happens in the future, one thing is clear: The industry will never be the same.
"This is a new normal and I know some things aren’t ever going to come back," Hennessey says. "For example, the big
extravagant events with big-name entertainers. People won’t have Bruce Springsteen playing at their event because they will be afraid of the media finding out."
While the last year has cast a dreary light on insurance and incentive meetings, things are looking up, according to Hyatt’s Phillips.
"2009 was substantially down compared with the past years, but I do see a light at the end of the tunnel," she says. "We all have to be more positive. People are doing meetings and incentives again. We see bookings in 2011, 2012 and 2013; 2010 is still down, but not as much as 2009."
FICP’s Bova sees the same trends.
"There is a lot of optimism," he says. "More now than there was earlier in the year. Next year is going to be better than 2009, maybe not as good as 2008 because we are still not out of the woods yet, but people are focusing on revitalization."
Katie Morell, a former editor at Meetings Media, is a freelance writer based in Chicago.
