Many associations that provide sponsored member insurance programs are being forced to take a hard look at the relevancy of the programs they currently offer. Is a low perceived value the cause of the lack of member engagement? Or is the lack of program participation due to the benefits not being communicated in effective ways, across multiple channels - including interactive mobile applications? If your current member benefits program still relies on direct mail as the primary marketing method, I have some buggy whips I want to sell you.
When the last time your association-sponsored member benefits program was thoroughly evaluated? Do you know if the current benefit portfolio provides benefits your members want and need at a cost they couldn’t get without association membership?
Conducting a formal “Request for Proposal” process can be time-consuming and may come with added consulting expenses. Some association executives may question why they should go through a bid process when they’ve had the same insurance carrier and/or broker/administrator for the last twenty years with no problems.
Today, associations are being forced to justify the cost of membership as retention and recruitment efforts are becoming more challenging. The ability to offer relevant benefits at costs that are below those offered in the broad market go a long way towards ensuring continuity of your dues revenue base.
Too many association-sponsored insurance programs have been operating on “autopilot” for years. Often, these programs have failed to keep pace with new product innovation, marketing, and customer service technology. Improved mortality and morbidity trends have also had a positive impact on benefits and related cost. Are your members getting the best possible value with programs that haven’t been improved for many years?
In trying to decide whether it makes sense for your association to send your program out to bid, you should consider the following:
Association insurance carriers, and broker/administrators are operating in an extremely competitive market. We haven’t seen a program that has gone out to bid in the last two years that didn’t significantly improve the benefit/cost ratio of coverage. At the same time, association sponsorship royalties have increased.
Most association programs that go through a bid process, whether they change insurance carriers or not, will see improvements in the products being offered. These improvements may include benefit enhancements, rate reductions, or a combination of both.
Association programs that go through a bid process and elect to change insurance carriers may be able to receive large transfer payments.
Associations that regularly bid their programs are able to validate that their current benefit portfolio is relevant and current with competitive trends in the marketplace.
We feel any association that sponsors a member insurance program has a fiduciary responsibility to periodically shop the marketplace. The time and expense of conducting a bid process is easily offset, in the majority of cases, by the program improvements gained.
We, at USI Affinity, are happy to share with you our ideas on member benefits and how royalties might help you become less reliant on dues revenue to survive. With competition in the association insurance market at an all-time high, we believe the time is right to shop your business.
Call Dennis Mulligan for more information at 610-537-1385 or email [email protected]