A hush blanketed the room filled with some 500 attendees at the Insurance Conference Planners Association's 2001 annual meeting in November. The audience had just heard Gary Pearson of Aon Corp. speak about the whirlwind of contingency planning he was involved with after September 11, when Aon lost more than 170 employees who worked in New York's World Trade towers. Then a comment rang out from another planner on the podium: “Try to outsource that!” he yelled. The crowd cheered.

Yet later, speaking off the record, one planner, who has outsourced his annual incentive meeting for many years, admitted that calling his incentive-house rep was the first thing he would have done in an emergency planning situation. What's going on?

Out to Get You or Out to Help?

Here's the problem: Many insurance planners believe that the big incentive houses are out to steal their jobs. This is not a new phenomenon. Back in 1992, the ICPA Board of Directors voted to exclude incentive houses (and independent planners, unless their sole clients were insurance companies) from registering to attend the ICPA Annual Meeting. The concern, says one planner who preferred to remain anonymous, was that they would use the meeting to gather intelligence about ICPA-member companies to try and steal the business.

“The ICPA board felt that incentive houses were in direct competition with our meeting planner members,” says ICPA executive director Karen Hopkinson. “We revisit this issue often, and still maintain our position. Members continue to tell us that inviting incentive firms to the meeting would be counterproductive to their interests.”

It is a thorny issue, and one that is not easily resolved. Richard Granger, assistant vice president, conference and travel services, Allmerica Financial, Worcester, Mass., does not outsource to incentive houses. But he says he knows of peers who have worked with incentive firms that play the role of partner — and then as soon as they know the culture of the company and have a foothold, they try to pounce, telling management they can do the job more efficiently and cost-effectively. This is especially threatening in today's down economy: “Meeting planning departments are always in the crosshairs to be outsourced when companies are looking to make cost cuts,” notes Granger.

But not all planners have negative experiences with incentive houses. For the past 15 years, Mauna Hatchett, CMP, who retired in January 2002 as corporate meeting planner for Indianapolis Life, has used Maritz Travel Co. in St. Louis to book air, DMC, and hotel, and to manage the on-site details of her company's annual incentive program. Not only did she not she feel threatened, but she also completely trusted her account executive, Rick Gold, vice president of sales, to act in her best interest. “I hear from others that they never get the same people to work with twice at incentive houses, but I've worked with Rick for 15 years,” she says.

Why Outsource?

Small departments such as the one at Indianapolis Life — which has one meeting planner who handles about 50 small meetings and one high-end incentive program annually — don't have the clout of a big incentive house. “We outsource because there is so much going on with our high-end incentive programs,” Hatchett explains. “They're much more complicated than the company's small, straightforward business meetings, which I don't outsource.”

A huge company such as Maritz has expertise in areas that planners have little time to think about, like risk management, notes Hatchett. “On our registration forms, there are always disclaimers for qualifiers to sign that ‘holds harmless’ Maritz and Indianapolis Life. I know I'm covered.”

Hatchett has always signed a contractual agreements with Maritz, not with the hotel, and she's fine with that. A few years ago, when a contracted hotel did not honor its promise to complete renovations before a certain date, Maritz pulled the meeting and booked it in a comparable property elsewhere, just a month out — and took care of all the litigation at no cost of time or money to Indianapolis Life. “On my own, with the meeting 30 days out, I probably would not have pulled it, dealt with the original hotel, and found new space,” Hatchett admits. “If not for the clout of the Maritz name, we never could have gotten in a new property with such short lead time.”

One oft-heard complaint about incentive houses is that their bills aren't clearly itemized. “My Maritz bill is always clear,” says Hatchett. “Economically, I feel like I'm getting my money's worth. Working with Maritz doesn't cost more than running the program in-house, especially when you factor in the savings of not having to pay full-time salaries.”

For Some, A Mixed Bag

Chuck Lane, assistant vice president public relations and meeting services, Humana, Green Bay, Wis., has had both good and bad experiences with incentive houses. When he dealt with an incentive firm with which another executive in the company had contracted, that firm kept him out of the loop and “at arm's length” from suppliers in an effort to conceal the true cost of the program. The meeting — an incentive trip to Hawaii — ended up being 30 percent to 40 percent more expensive than if it had been planned in-house, says Lane.

On the positive side, he currently works with Creative Group of Appleton, Wis., primarily for European incentive programs. Lane describes it as “a wonderful working relationship,” noting that the incentive firm openly explains its fee structure.

Creative Group's local relationships have been a tremendous benefit to Humana, adds Lane. On a recent incentive trip to Rome, electrical problems at the Cavaleri Hilton meant 70 replacement rooms at another hotel had to be found at the last minute. Through its connections with a local DMC, Fourth Dimension, Creative Group quickly found rooms at a comparable facility, the Sol Meliá. And thanks to the contract Creative Group had negotiated, the Cavaleri Hilton was obligated to pay for the replacement rooms. Particularly because of the language barrier, “this situation could have been a disaster,” says Lane. “But it turned out to be seamless.”

Outsourcing has also been a mixed bag for Steve Clark, CMP, assistant vice president conference and travel services for Madison, Wis. — based Cuna Mutual Group. He tried working with an incentive firm on Cuna Mutual's annual incentive trip once, but the relationship only added “another layer to the process,” and more extra work than benefits, says Clark. For example, one problem was that suppliers on the project weren't sure whom they should be taking orders from, the incentive house or Cuna Mutual's planners.

The à la Carte Approach

The truth is that most insurance planners outsource some meeting planning functions — even if only occasionally — to a destination management company, site selection firm, or other third party as needed. This kind of selective outsourcing can help to alleviate tight staffing and free planners to be more strategic.

About 18 months ago, for example, Clark began using Cleveland — based independent meeting planning firm Conferon to book meetings at properties he doesn't have a sales relationship with. This began in the seller's market when hotels could pick and choose their business, and Clark was having trouble getting bids. It has worked well, he says, and has helped to alleviate labor shortages in his department.

Ken Pickle, CPCU, CMP, manager, incentives and conferences for Safeco Insurance Cos., Seattle, has often used destination management companies and site selection firms. He is now also looking outside for occasional technical direction, thanks to company-wide downsizing (see sidebar, page 58). For the last 10 years, Pickle has relied on the technical director from his company's media department for meeting production and other on-site needs like photography, sound, and lighting. That person was let go in one round of a series of layoffs that will ultimately reduce Safeco's workforce by 10 percent. (Pickle's own five-person department lost a travel coordinator to the layoffs last fall.)

For companies without a fully staffed conference department, outsourcing can be a good thing, notes Clark. “If they use outsourcing correctly, planners shouldn't be afraid,” he notes. “I'm secure [concerning] our department's role because we're very integrated within the company.”

Been There, Done That

Some former in-house insurance planners have, by choice or downsizing, become third-party event planners themselves. What's their take on the controversy, having sat on both sides of the fence?

Bill Wulff, president of Fort Lee, N.J. — based Above the Rim, notes that when he was director of event services for MetLife in New York, he sometimes outsourced site selection, registration, entertainment, or design. He always saw outsourcing as a resource, rather than a threat. “If you outsource to a third party correctly, it allows you to increase your capacity and better manage the delivery of multiple meeting and incentive programs. If you try to do it all or you just hand it over, then certainly, you are at risk,” he says.

Lance Wieland of Global Events Group, Portland, Maine, says he didn't feel threatened by third parties when he was with UnumProvident Corp. in Portland. Instead, he views outsourcing as a way planners can pick and choose expertise for special needs. “In-house planners know the company, the culture, the people,” he says. “They know which executive wants caffeine-free Diet Coke in the fridge when he checks in.”

Background Check

Planners interviewed for this story all agreed on one thing: Get referrals from your colleagues when looking for an outsourcing firm. And talk with vendors the company has worked with as well — those relationships can make or break your program.

Bill Wulff, former director of event services for MetLife and now president of Fort Lee, N.J. — based Above the Rim, an event planning company, notes that the way insurance conference planners share information and network is one of their strengths. “If I screw up, people will know,” he says.

Richard Granger, assistant vice president, conference and travel services, Allmerica Financial, Worcester, Mass., works often with destination management companies. He recommends getting references from hotels the company has worked with and making sure that the DMC can come up with a proposal that meets your budgetary needs.

Mauna Hatchett, former corporate meeting planner, Indianapolis Life Insurance Co., says that she'd want to know how an incentive house operates after the sale has been made. She recommends going on site to two or three of its programs — of differing sizes and locations — to see what the service is like. “How is the travel department? Are they flexible with changes? How do they deal with the crunch when attendees first arrive? How do they appease unhappy campers?”

And it's crucial to listen to the general feeling you get about a third party, advises Granger. Trust your gut instincts.
— Beth Negus Viveiros