Market Watch: Financial and Insurance Meetings

Just over a year ago, when M&C last looked at the state of financial and insurance meetings ("Poised for Growth," February 2010), this market was barely beginning to come back from the one-two punch of the "AIG effect" and strictures imposed by federal government's Troubled Asset Relief Program. Today, what was nascent stability has turned into clear signs of recovery.  

According to industry experts, most events that were canceled or postponed during the recession have been reinstated. Firms looking to take groups outside the United States and/or to luxury properties and destinations -- off-limits to many companies even a year ago -- say they are seeing healthy interest again.

To gauge the current state of this segment in the meetings world, M&C analyzed the latest membership data compiled by Chicago-based Financial & Insurance Conference Planners, the largest association in its niche, and spoke with a number of industry experts. Following is a look at where financial and insurance events are headed for the remainder of this year and beyond.


Meetings are on the rebound "Of the financial/insurance business we saw canceled over the past few years, at least 80 percent of it is back on the books or will be within the next 12 months," says Tom Wilson, vice president of sales for Fenton, Mo.-based Maritz Travel.

Steve Bova, executive director of Financial & Insurance Conference Planners, agrees that things are turning around. "The past two years were such a time of uncertainty, but that all seems to be over," he says.

Duluth, Ga.-based Primerica is one such financial services/insurance firm putting its large convention, a biennial affair canceled in 2009, back on the agenda. An inside source says the company had canceled "due to sensitivity about meetings" but now is eager to host some 55,000 agents for four days in Atlanta in mid-June to "bring the whole family together for the first time in four years."

While events are being reinstated, many don't look the same as they did prior to 2008. Among changes noted by industry experts:

• More educational content. According to FICP statistics, 80 percent of the events its members organize are incentive programs; in the past, these were viewed primarily as a chance for firms to get top performers together to talk about new products amid lots of free time. But sources say 50 percent of these gatherings now have added or increased "hard" meeting time. Tom Wilson notes that one financial firm now invites economic advisers from top universities to address program participants on topics such as the transfer of wealth management within families.

• Involvement of senior management. Since 2008, meetings have been higher up on the radar of senior executives at financial and insurance firms. "It's a fundamental shift that executives at this level are involved," says Kelly Wood, vice president, global sales organization, North America, for the Ritz-Carlton Hotel Co. "Higher levels of approval are now required for meetings."

• Less worry over negative perceptions. In M&C's 2010 look at financial/insurance meetings, firms were still being very circumspect about attracting unwanted attention. At the time, hoteliers told M&C they were being asked to sign confidentiality agreements in record numbers, so as not to disclose the name of client firms or details of their meetings, while others banned signage and branding during their events.

But today, these concerns are fading. At the Westin Kierland Resort in Scottsdale, Ariz., for example, Liz Franzese, director of sales and marketing, says most clients no longer seem concerned about confidentiality or the brandishing of logos while on-site.

"We, too, are seeing less sensitivity on using program logos and company logos on materials and signage," notes Jill Anonson, event management practice lead at West Des Moines, Iowa-based ITAGroup, a meeting and incentive firm.

Luxury no longer is a dirty word For many firms, luxe is back, if perhaps not quite as flaunted as before. This is in sharp contrast to two years ago, when many firms, particularly those that accepted TARP funds, shied away from any properties and destinations that connoted luxury, glamour or even fun.  

Top-tier hotel chains, including Ritz-Carlton, Four Seasons and Starwood's St. Regis brand, as well as high-end destinations, report that business is more robust this year and beyond. "The AIG effect is over; companies are much more comfortable that their meetings won't show up on the cover of the Wall Street Journal today," observes Kelly Wood.

Wood says Ritz-Carlton lost several thousand group rooms in 2009 but notes, "We started to see a turnaround in the middle of 2010, when companies put their toes back in the water, waiting to see if it was safe to come out." Business is looking up for this year and next, Wood adds, but it won't be "good" until 2013.

For her part, ITAGroup's Jill Anonson says luxury properties are being booked for 2012 incentive programs because "our clients are feeling pressure to drive sales due to strong competition in the market," and an important way to do that is to "reward employees by offering ‘wow' experiences."

Wood and Anonson agree the trend of financial/insurance firms holding annual meetings or incentives in "serious" settings, such as urban properties near company headquarters, has passed. "Meetings are now going back to higher-end destinations like Florida, Arizona and California," Anonson says.

European destinations, too, are seeing more interest from this market after a three-year hiatus, reports Christie Hicks, Starwood Hotel & Resorts' senior vice president of sales. Affirms Cindy Hoddeson, director of meeting and incentive sales for the Monaco Government Tourist Office, "Business is much better than it was two years ago." In fact, she notes that for 2012, one incentive house already has booked four insurance meetings in the principality.


Budgets remain in a lock While meetings and events have been added back to agendas, the money allocated for them has been modest. According to an informal survey of FICP members conducted last August, 60 percent said their budgets had not changed from the year before.

And the trend seems to be continuing through 2011. Steve Bova says his members report flat budgets, which is worrisome when hotel rates are expected to increase by at least 12 percent this year. And that's in addition to steadily rising airfares due to spiraling oil prices. For some firms, that means the duration of meetings will be reduced.

Tom Wilson of Maritz says the average for domestic programs in this market segment is three days. In addition, some planners are stepping down in brand or level of hotel they choose. Others are trimming costs for entertainment, gifts and amenities and scaling back on traditionally glitzy gala dinners. Some firms, such as Houston-based ForeThought Financial Group (See "Company Snapshot"), are reducing their group size or the number of incentive winners, rather than cutting corners on the experience itself or associated perks.


Lead times have shifted When FICP asked its members last summer about their lead time for booking meetings compared to the prior year, 55 percent said it had shortened. Today, sources sense a trend of lengthening lead times, due mainly to a gradual shift from a buyer's toward a seller's' market in relation to hotels.

"Our hospitality members are telling us that they are seeing strong pickup in summer business for 2011, 2012 remains strong and by 2013, it will be back to normal [2006 levels]," says Bova.

With higher occupancy, meeting planners are finding prime dates harder to get at short notice. At Ritz-Carlton properties, for example, "choice dates for 2012 are gone," says Kelly Wood. "It's not like it's been in recent years, where you could call two weeks out and get 100 rooms."

Indeed, rising costs are motivating some of Maritz's financial and insurance clients to book their meetings and incentives several years in advance, says Tom Wilson. "It's still a buyers' market now, but everyone can see the average daily rate going up," he says.

Company Snapshot

Kelli Livers, CMP, is a member of FICP's board of directors and the director of travel and administrative services for Houston-based ForeThought Financial Group. She recently shared with M&C details on how her firm is now handling meetings and events.  

M&C: Are events different now than they were, say, back in 2007?
Livers: We have modified our incentive model from large to smaller but more frequent trips. The goal is to provide a smaller, more intimate environment to build relationships and grow business.  

M&C: What types of destinations and level of hotels are you booking for 2011 and beyond?
Livers: Currently we are staying domestic but are consistent with our luxury/five-star brands for incentives and reward travel.

M&C: Are budgets growing?
Livers: Mine are flat year-over-year.

M&C: What is it like to negotiate with hotels these days?  
Livers: Concessions are not as easy to negotiate, especially when we are doing short-term bookings. Plus, my company wants specific dates, which gives me very little leverage.

M&C: Are financial and insurance companies adding more virtual elements to their gatherings?
Livers: Yes, especially live streaming of meeting elements and speakers to engage people who can't attend in person. Of course, using Facebook and Twitter for promotion before, during and after an event are high on the list.

M&C: Are planners like yourself embracing new technology for your own job? For your meetings?
Livers: I love technology as it pertains to SMMP [strategic meetings management programs], registration, etc. In my prior life at a global company, we were high on the technology used during meetings. Working for a smaller organization, we are not currently engaging at that level. But having said that, our conference gifts were iPads with our company's data and apps loaded on them.