By Steven M. Labbe
The goal of every association is to enhance the members' value experience. Delivering what members expect is a constant association challenge. Whether it's networking, learning, certification or leadership development, associations want to deliver a high level of member satisfaction. Organizations are always looking at ways to help members increase revenue, reduce expenses, and operate more efficiently. Anything less puts association membership renewals "at risk." If the expected value is missing, the dues check can be, too.
With the proliferation of associations over the past 30 years, alert insurance agents began offering group insurance programs for members, everything from accident policies, auto coverage, business insurance, to practice liability, healthcare, and disability income protection. In addition to the member benefits, the programs included perks for the associations.
More than any time in the recent past, insurance plans have the potential for delivering significant benefits to associations and their members. Even so, some are cautious about getting involved. To assure success, here are guidelines that will help associations maximize the benefits from offering insurance plans.
- Obtain the commitment of the association staff and board members to actively support the plan. Things can start going wrong from the get-go when the person marketing the plan downplays the need for the association's leadership to affirm its active support for the program. If the people responsible for the organization take the program seriously, including making clear their expectations, it will have a good chance of being successful. The members must feel that that their leadership values the program.
- The program must have sufficient incentives to maintain strong association interest. Even though an insurance program may have value for the members, it must go beyond that. With tight budgets an issue for just about every association, the program must have an adequate financial incentive for the association itself.
- The managing or sponsoring insurance agency must have the knowledge and experience to facilitate the plan with the insurance company. Problems develop if the insurance agency in charge of the plan fails to serve as an active, participating intermediary between the association and the insurance company. While the insurance company serves the role of supplying the coverage, the sponsoring agency has the responsibility of making sure the plan design meets the needs of the association.
- The sponsoring agency must undertake a thorough analysis so the insurance company's underwriters can prepare a realistic coverage and rate proposal. We all know salespeople who are so intent on making the sale, they fail to gather critical accurate information so the insurance company's underwriters can make a proper evaluation of risk. When this occurs, it often leads to unexpected consequences such as price increases that can erode promised or expected savings. This is when members become disgruntled and fail to renew their insurance and, quite possibly, their association membership.
- Require that the qualifying criteria be structured to ensure a dividend stream. While a low cost group program sounds enticing, there is no assurance that the rates will remain low. The most desirable association insurance plans reward the participating members with dividend payments for controlling and reducing losses. If members with a questionable track record are permitted to join the plan, the expected financial benefits are threatened.
- Recognize the importance of clarifying the responsibilities of each of the parties involved in the plan. Glossing over or minimizing the responsibilities of each of the parties involved--the association, the insurance company, and, if applicable, a sponsoring agent-is a mistake. For example, the association must agree to introduce the plan to the members and continue to promote it, while the insurance company should provide an ongoing plan to assist members in implementing effective loss control procedures. Finally, if working with a sponsoring agent, it's his or her job to manage the plan and act as a conduit for members to communicate with the insurance company. Working together, everyone benefits.
- Insist on having local insurance agent relationships. Most organizations are more comfortable doing business with a local insurance agent, preferably someone who knows them. Yet, many association insurance programs bypass local agents and give members an 800-number to call when they have questions, issues, or a claim. Can anyone really expect the member to be comfortable with a representative of the company handling their claims? This is not a way to build member confidence. In fact, it plants the seeds of dissatisfaction.
- Look for the program to include an ongoing marketing plan. Association insurance plans are not automatically successful. Programs often begin with a bang but end with a whimper, to paraphrase TS Eliot. They fade away and are forgotten. When this happens, the problem can be traced to the lack of a well-designed and ongoing marketing plan. The fault isn't with the association, but with the insurance organization that sold and installed the plan. Most are not equipped to implement a continuous marketing effort, one that's designed to attract additional existing members and to give new association members the opportunity to enroll.
- Understand the role of a sponsoring agent in the plan's structure. The task of a sponsoring agency, if you are using one, is to make sure the insurance carrier's underwriting ability meets the requirements for a majority of the members. If not, the insurance carrier may skim the cream off the top and reject the majority of members. This means the sponsoring insurance agent must have relationships with a number of insurance companies that work with associations so they can recommend the one that best fits a particular association's members. If an association is mismatched with an insurance company, the program will be in jeopardy and will fail.
- Pay close attention to the quality and experience of the program's management. It's important for an association to ask serious questions: "Tell us about the program manager? What will be this individual's continuing role? How will this person assist us, not only setting up the plan, but managing it in the future?" Consider it a red flag if the plan salesperson says, "You don't have to worry about anything. We take care of everything."
By aligning itself with an insurance program that can deliver positive benefits, associations can continue to enhance each member's association experience.
Steven M. Labbe is account executive and program coordinator for Your Association Insurance Plan, a division of Wieczorek Insurance of Manchester, New Hampshire. He can be reached at: 800-362-2018; steve@wizinsurance.com; or www.yourassociationplan.com.