In an industry in which sales are driven by incentives like no other, few companies are cutting back their incentive programs — even in this tough economy. So says a recent survey conducted by CMI's sister magazine Insurance Conference Planner and the Insurance Conference Planners Association.
Ninety-two percent of respondents to the survey, conducted in late 2002, said they will hold the same or more incentive conferences in 2003 as in 2002, and 82 percent will hold the same or more training meetings. Incentive travel budgets dipped from the magazine's last reader survey two years ago but are still impressive: The median incentive travel budget in 2002 was a hefty $1 million (an equal number had budgets higher than this figure as had lower), and the average (mean) budget was nearly $2 million. And two-thirds of the respondents expect their incentive travel budgets to increase or stay the same in 2003.
Every other year, 350 or so top producers from American Fidelity Group in Oklahoma City are rewarded with trips to places such as Vienna and Hong Kong. “The insurance business is still driven by reward and recognition,” says respondent Brett Barrowman, director of conference and travel management. “The positive memories we instill with our international incentives live on.”
For the 2002 Hong Kong trip, Barrowman increased his security initiatives: “We've flip-flopped our position on security: We used to do it behind closed doors because we didn't want to raise anyone's concerns,” he says. “Now we're making security and contingency plans more visible.” But American Fidelity never considered a less-distant locale. “Our management said, ‘We need to keep these people safe, but they have been working hard for Hong Kong — not Chicago.’”
The economy has made a dent in the number of qualifiers at St. Paul, Minn.-based Securian. “It's more challenging for our representatives to qualify early in the qualification period,” says Carol Rice, director of recognition and conference planning. Rice, who spends about $2 million a year on incentives, says her budget has remained flat, and she expects more of the same in 2003.
John Touchette, CMP, who heads the meeting management department at John Hancock Life Insurance Co., has seen a drop-off in incentives, which used to make up a larger proportion of the 50 meetings that his seven-person department plans annually. “We've seen a shift away from the traditional life agent distribution channel to more bank, broker, and Internet channels. We can't motivate bankers and brokers the same way, so we are seeing fewer qualifiers for our incentive programs.”
Hancock still does two major incentives annually for its career distribution channel: one domestic program and one two-tiered international trip. This year, Hancock's top agents will be going to Beijing and Hong Kong, or to the Grand Floridian at Walt Disney World. “Only one or two people canceled because of concerns about traveling overseas in the spring of 2002 when we held our international incentive in Rome,” Touchette says. “I don't anticipate any concerns about going to China.”
The e-mail study of 448 ICPA planners was conducted in September and October 2002 by the Primedia Business Marketing Research Department and generated 136 completed surveys, a 34.1 percent response rate.
We'll hold more incentive meetings in 2003 than in 2002: 14%
We'll hold the same number: 78%
We'll hold fewer: 8%
SOURCE: ICP/ICPA planner survey