SPORTING ACTIVITIES AND VENUES
It’s time to have fun! Have you ever considered helping your client with its upcoming marketing campaign by offering an insurance covered-game that involves sinking three 25-foot putts in a row? Have you ever discussed possible insurance needs with your child’s sport league? How about making an intentional visit to the local golf club to talk about their rather unique insurance needs?
Insurance and sporting activities are a perfect match. As this month’s articles point out, the commission from writing a sporting activity or venue may not be substantial but the contacts you gain could prove priceless…and don’t forget the value of having a little fun!
AVOIDING THE ROUGH WITH GOLF & COUNTRY CLUBS
Property damage continues to present a challenge, as do exposures resulting from increased amenities
Everyone knows things can get pretty competitive on the links. What they may not know is, competition is taking place inside of golf and country club offices and boardrooms. Clubs are competing for dollars.
"Over the past several years, a number of clubs—particularly private and semi-private clubs that were family- or partnership-owned—have sold," explains Rob Mulhern, senior vice president, Preferred Club, at Venture Programs. In some cases, they sold to avoid going under. "The larger, more established—those with long-term memberships, the really high-end clubs—are doing all right," he adds, "but others are trying to keep members active and spending money at the club. That can be tough in today's economy."
According to David Hatlem, senior executive vice president, Club Programs, at Bollinger, "Clubs continue to look for ways to deliver additional events and facilities to their membership, in order to compete with other entertainment and social options." These include enhanced exercise facilities and spa facilities, along with kids' activities and amenities. In addition, he says, clubs are actively reaching out to boost membership by lowering up-front costs to join and adding other new member enhancements.
Clubs are finding other ways to bolster the bottom line, as well. "They are looking to use their owned resources in any way possible to bring in more revenue," explains Brian Himmer, Golf & Country Clubs product manager for Philadelphia Insurance Companies. "One way they're doing that is by opening up their own golf cart repair shop to other courses that might not have an on-site repair facility." Another avenue, he says, is using the club-owned landscaping equipment to provide grounds maintenance services at other commercial locations.
"Some are opening up to public play," adds Mulhern. "We are seeing private clubs go to semi-private and then semi-private clubs may be giving better deals to members or to draw new members. Some clubs have backed off on initiation fees and many have opened up for outside play, from Monday charity tournaments they never used to hold to offering weekday golf for non-members."
This drive to maximize club resources and participation has been underway for a couple of years, he notes. "It's kind of plateauing now. The push for people to come to the club for family events, dinners, wine tastings—even offering things like babysitting or summer camps or even sliding boards and splash pads—has picked up the financials of a lot of these clubs, which has helped them survive."
Even as clubs are seeing improved results, they're dealing with another challenge: Mother Nature. "Depending on where the clubs are located, they've faced severe weather losses," Mulhern says. "Storms have affected clubs all around the country."
Club insurance
"Carriers have paid out a lot in losses, and are rethinking or revamping their modeling," he adds. "An account we didn't consider coastal or CAT-prone is now being modeled for reinsurance from a perspective that it may be hit by a storm, if it hasn't encountered one yet. Clubs that never had wind deductibles or sub-limiting of trees or a sub-limit for debris removal now are seeing that in the marketplace."
According to Himmer, property coverage continues to be a challenge because the exposure not only includes the buildings and contents, but also the surrounding trees, shrubs, greens, fairways and tee-boxes. "Many golf and country clubs are located near the coastlines, which creates an even higher property exposure," he explains.
"Convective storms are also occurring at a higher frequency on inland property, and locations in areas susceptible to drought have seen their brushfire and wildfire exposure increase," Himmer says, noting that 2012 was one of the most damaging years on record for wildfire loss. Add to that increased inland flooding from hurricanes and other storms, snow in the Midwest, tornadoes across the South, hail in central states, and even derechos in the mid-Atlantic states, and it seems like no one is immune, Mulhern adds.
Hatlem says these factors are leading to higher prices and lower coverage. "Because weather has generated significant losses at clubs across the country, carriers have had to increase rates—often in the 10%-25% range—and reduce coverage," he explains. "Some carriers have withdrawn from the segment altogether."
Coverage restrictions focus largely around property. "For example, trees and outdoor property—a club's awnings, porch furniture, signage, the things that can blow away in a storm—are being affected," Mulhern says, "And the tee-to-green cover, the actual golf course grounds cover, is being pulled back a bit, as well."
Some carriers are becoming more restrictive in aggregates or limits on other lines, including D&O and EPLI. "For nonprofit D&O, for instance, carriers won't put out ten or twenty million dollars of limit anymore, even if a club is willing to pay for it," Mulhern explains. "They don't want that capacity being out there."
As restrictions take hold, some clubs are expanding coverage in other areas. "Identity theft and cyber liability is certainly an area that brokers should consider offering to clubs," explains Hatlem. "Clubs should become more cognizant of potential exposures with their members' information and how it is being managed, internally and electronically."
Avoiding mistakes and building a book
Retail agents and brokers can learn from others' missteps in the golf and country club insurance arena. "One of the things we see is a tendency to not explain in sufficient detail the coverage differences that exist from carrier to carrier," says Hatlem. "A multitude of companies will insure golf courses. However, a wide field of carriers doesn't mean there is a deep field of product offering."
He encourages agents and brokers to analyze the coverage differences during the renewal period and at stewardship meetings. "Offer some potential claim scenarios to show how two different products might respond due to coverage, definition and/or limit differences," Hatlem says.
Some agents and brokers fail to zero in on what's most important. "Tee-to-green coverage should be the agents' focus," notes Himmer. "Many of the losses in the golf and country club class of business are property-driven and involve damage to the course itself. Agents need to take a close look at limits and restrictions on the limits per green or per hole."
Some miss important extra coverages. "Coverage extension for tree removal is something agents and brokers should not ignore because clubs often lose trees on the course," Himmer adds. "Don't forget EPLI coverage. Third-party EPLI is critically important for a private club that will be selecting, and possibly rejecting, people for membership."
Mulhern sees certain agents and brokers stumble around renewal time. "Too many agents fail to reach out to their carriers early in the process to see what's going on in the industry, what the carriers are thinking, and what changes might be in store," he explains. "It can be tough to talk with clients about rate increases and coverage restrictions, but in a firming market, that's important."
By addressing issues early on, agents can make sure clubs budget properly and, more important, do what they can to ensure adequate coverage and minimize risk. "Prepping clients for changes—being as detailed as possible and having honest and open communication early in the process—avoids surprises and can boost retention," he adds.
Himmer encourages agents and brokers to focus on coverage. "Price is important, but coverage is more so," he explains. "While a number of carriers hop into the golf and country club segment, there are a limited number of players dedicated to the industry with detailed and complete coverage forms. Saving 5% is great. What's not great is having every club member talking about the damaged green on number 6 because the club lacked coverage to repair it properly."
He also says agents and brokers should be aware of how much clients are performing outside and non-golf services. "A new legal liability exposure might exist if a club is taking in other clubs' golf carts and equipment to perform maintenance or service on the property," he explains. "Also, a higher auto exposure exists for clubs taking trucks or equipment off-site to perform maintenance services at non-owned locations."
"Have a good understanding of new exposures, events and activities taking place at the club, and how the club will manage these exposures," Hatlem says.
Himmer reminds agents and brokers to look for the silver lining if problems occur. "If an agent is looking for growth in the golf and country club business, they will definitely get good referrals when a club has a claim and it is handled properly," he says. "That approach will help maximize agent profits and lead to growth. If you are running around trying to undercut every account on price alone, you will be short lived in the industry."
Be aware of what Hatlem calls the "highly 'political'" nature of clubs. "In general, changes occur at the board and management levels with a greater frequency than in most industries," he explains. "Identify those clubs with strong management and membership structures in place. Target ones that have a sense of risk management and believe in product/service as opposed to a 'price shopper.' An account that switches markets every other year isn't looking for continuity of coverage."
It's also important, he says, to "understand how a club's management operates and identify the decision-making tree for all vendors. A club that works with member vendors always will be a challenge. Plus, it opens the club to fiduciary and governance issues."
Beyond understanding client and prospect issues, agents and brokers need to know the insurance marketplace. "There are a number of regional players, but there are really only a few national providers," explains Mulhern. "Agents need to really know the marketplace and understand what each provider brings to the table in terms of coverages, enhancements and limitations."
He encourages teaming up with club trade groups to help fuel growth. "Get involved with associations, whether it's the Club Managers Association of America, the controllers association, the golf course owners association or other groups," he explains. "These associations and their chapters are looking for assistance, not only from monetary sponsorships, but also from an education standpoint. Agents can discuss what to look for in a proposal, how deductibles work, what the claim trends are, or any of a number of other topics." With a chuckle, Himmer offers one bit of parting advice directed at agents and brokers who hold club membership: "Be careful when looking to insure your own club. It might become difficult to relax and play a round, since the club is also your client."
KNOWLEDGE TO WIN IN AMATEUR ATHLETICS
As the amateur sports world expands, so do the opportunities for agents
Amateur athletics and recreation continue to maintain a prominent place in the lives of American individuals and families. Providers are capitalizing on this interest in sports and fitness and are responding by offering facilities and activities for all age groups and all family members.
"Family centers—privately owned or community-built—are becoming more popular because they offer a one-stop shop for sports-related activities for all ages," explains Lindsey Burkle, program underwriting manager at Special Markets Insurance Consultants. "Facilities are being built in many communities, and they represent a good opportunity for agents to offer a variety of coverages, from participant accident insurance for amateur athletes to other protection for participants and property."
Traditional health clubs are part of the mix. "As clubs try to increase revenues, they're looking at alternatives, specifically those that can involve the entire family," explains Jennifer Urmston Lowe, national account manager at Sports & Fitness Corporation. "Lower participation in adult racquetball and other activities that required significant floor space is letting clubs repurpose space for open court activities, which expands the offerings for youth and teens."
Clubs with outdoor athletic fields are using them more, too. "Clubs are offering summer and weekend soccer camps, which lets them make money and stay busy during times when adults may be less likely to work out," Lowe adds. "Many have in-house athletics programs, but some lease them out to independent leagues."
She says clubs with broader offerings are generally better off financially. "Agents should target them, look at their coverages, and make sure they're protected for everything they offer," Lowe explains. "If they're not, get out and educate them, find a market that can address the risks, and be a hero to the club."
In addition to a greater family focus, insurance providers are seeing growth in other areas. "The amateur sports industry continues to grow across disciplines and age groups, despite the challenging economic climate," says Lorena Hatfield, marketing resources manager at K&K Insurance Group. "This offers potential for agents looking to add income to their agencies."
"Participation in traditional sporting events, such as soccer, basketball, baseball, and football, remain strong and relatively consistent," adds Nicole Pitney, special risk manager for Chubb's A&H business. "There's an increase in non- or less-traditional sports activities among youth and adults alike." She's seen accident and health submissions for Quidditch, Gaelic football, and fistball leagues.
"Insurance risks for these organizations track traditional sports," Pitney explains. "Agents can help these often younger organizations by discussing possible exposures. In addition to boosting revenue, it's a way for agents to diversify their books of business." According to Susan Bongard, senior underwriter at Special Markets Insurance Consultants, martial arts participation is growing, too.
Over the past year or so, Michael Dean, vice president, F.L. Dean & Associates, says his underwriters have witnessed significant growth in adventure racing—races that include an obstacle course. "This represents an underwriting challenge because each race is unique," he notes. Some have obstacles involving fire, while others may include a river crossing or other water-related exposures. Venues, usually forest preserves or park districts, require liability coverage, he adds.
"We anticipate almost 30% of all communities will conduct an event of this type," Dean says. "This offers agents a great opportunity for lead generation. Working with event planners on coverage requirements can lead to other opportunities, including personal lines, as well as commercial."
He says producers can demonstrate expertise by helping event planners understand which types of obstacles could increase—or decrease—premium costs. "By communicating with underwriters while listening to client needs, agents can help establish the correct balance for these events," Dean adds.
John Sadler JD, CIC, president of Sadler Sports Insurance, says there are more travel teams for elite athletes. "We're seeing more combines and showcases, where these athletes can demonstrate their skills for college recruiters," he explains. "Participant injury exposures are higher for travel teams than for teams in local league competitions."
Competition is more intense, too, he adds, plus travel teams have added exposures, such as greater risk of auto accidents during travel and the perils of motel downtime. "We continually hear of drownings or near-drownings at motel swimming pools, due to lack of sufficient supervision," Sadler notes. "In addition, overnight motel stays present exposures for sex abuse and molestation incidents."
He says travel team coverage is readily available, but minimum premiums may pose problems for individual teams. "It may help to tap into a risk purchasing group or other association program to circumvent this minimum premium issue," he advises.
His company also is fielding more requests for individual instructors and trainers involved in everything from baseball, softball and soccer to tennis, golf and overall fitness. These individuals could face lawsuits alleging lack of supervision or lack of instruction, he says.
Jeff Ladd, president of Sports Insurance Specialists, is seeing strong interest across a broad range of amateur sports. "In addition, there's significant interest in Internet-driven programs," he adds. "These programs save agents and brokers time when they're looking to cover a wide variety of smaller amateur events." His firm's Web-based facility encompasses camps, clinics, short-term events, youth baseball, and various sporting tournaments and events.
"An Internet program can let agents choose desired coverage limits, pay for the coverage and print the needed certificates of insurance, all online, from start to finish, within a couple of minutes," Ladd adds.
Hatfield is seeing similar interest. "E-commerce Web sites can provide complete online processing functionality, including the ability to immediately quote, bind and earn commission," she says. "In addition, agents representing large amateur sports organizations should choose a sports insurance expert that can offer experienced underwriting and, as important, knowledgeable claims handlers who can respond quickly and efficiently."
Addressing the risks
As the amateur sports world continues to grow, so do the risks. Sexual abuse and molestation is of primary concern. "Sexual abuse and molestation (SAM) coverage has not always gotten the attention it deserves, although that's changed in recent months," explains Burkle. "Coverage is offered in many package programs offered through large sport organizations, but sometimes smaller teams, leagues and camps don't have it."
"Leagues and facilities are addressing this," adds Lowe. "Background checks are a minimum requirement. And agents need to make sure the policy has sufficient coverage. Some cap it at $100,000, even though the occurrence limit is $1 million. Check that—because some carriers offer policies that exclude or limit the SAM."
Hatfield says, "The spotlight on due diligence by sports organizations responsible for the safety of youth participants is greater than ever. So is the need for proactive steps to protect the athletes and the organizations." she says, "In addition to implementing an abuse prevention plan, groups should consider adding SAM coverage specifically developed to protect sports organizations."
According to Sadler, agents and brokers should expect to see more underwriting controls around SAM. "Before, minimal due diligence—running criminal background checks—was enough," he says, "but it's feared that only a small percentage of potential sexual predators have a criminal background that could be discovered when running such checks."
He says sports organizations should require administrator and staff education, written policies and procedures to reduce the likelihood of an incident, and a written allegation response plan, including a requirement to notify law enforcement. His firm offers resources and templates that help sports groups meet these requirements.
Associations and organization headquarters staff offer guidelines, too, says Hatfield. "Another source of information is the Centers for Disease Control and Prevention Web site, www.cdc.gov," she adds. It offers a packet of information titled "Preventing Child Sexual Abuse Within Youth-Serving Organizations: Getting Started on Policies and Procedures," that addresses several areas of concern.
Concussions represent another highly visible concern. "This is very troubling to the sports insurance industry, due to its high severity potential and the possible opening of floodgates," explains Sadler. "Sports general liability carriers fear possible class-action lawsuits going back many years, which could trigger coverage under prior occurrence policy forms. Look for carriers to limit their risks with new participant liability aggregates."
Other injury risks exist, too. "There is increased awareness of the exposure for injuries during sports play and practice," says Pitney. "These run the broad spectrum from pulled muscles and broken ankles to torn ACLs and MCLs. The range of medical costs associated with treatment is equally broad."
"Participant accident coverage can help cover costs associated with these," explains Nora Stransky, CIC, CPIW, president and underwriting manager at Special Markets Insurance Consultants. "The coverage lets parents incur minor out-of-pocket expenses, if any, for medical bills. It offers an extra layer of protection agents sometimes overlook and can be a savior to policyholders looking to avoid potential lawsuits from injuries." Stransky reminds agents to be especially diligent when talking to organizers of some of the newer sports because they may not be aware of the risks—or protection available.
Adds Pitney: "Offering accident medical coverage for players can help mitigate the financial impact of injuries. Accident and health insurance can play an especially valuable role for players with no primary health care coverage or a high-deductible plan."
Beyond injury, amateur sports groups have other exposures. "Sports organizations face cyber threats from hackers who may break into Web sites or servers and steal confidential personal and financial information," explains Sadler. Laws govern these incidents; fines and penalties may apply, in addition to notification expenses and an obligation to provide credit monitoring.
Another risk involves social media. "Sports organizations frequently post or let others post on their Web sites, Facebook or Twitter," he explains. "Such postings may include defamatory information, which can result in libel lawsuits or may inadvertently include confidential information that results in an actionable invasion of privacy lawsuit."
Coach professional liability is another concern. "We see the occasional lawsuit, where a parent sues a coach, alleging that improper coaching instruction or the benching of their child resulted in the loss of a college scholarship or a professional career," Sadler explains. "Of course, these lawsuits are ridiculous, but legal defense can be expensive."
Equipment coverage is sometimes overlooked. "Teams and leagues have invested significant dollars in their equipment," explains Bongard, "and to have to replace it without coverage could cripple a league."
Learning from the past
If experience is the best teacher, agents can learn a lot from where others went wrong. "One mistake agents make is requesting spectator liability only when sports are involved," explains Bongard. "They really need participant legal liability, which isn't provided in spectator policies."
Adds Burkle, "Another mistake is not knowing all of the various types of available coverages. Amateur athletics coverage is a niche market; having expertise can help agents provide a well-rounded package to their clients."
According to Stransky, "The biggest mistake is not going to the experts in this market to really provide their client with the best coverage possible."
"Choosing price over coverage can backfire, particularly when dealing with the unusual exposures sports organizations encounter," says Hatfield. "An experienced underwriter can help agents recommend coverage unique to sports risks and provide accurate pricing based on industry-specific historical data."
According to Lowe, "Waiting until the last minute on renewals is one of the biggest things we see. Some of the more complicated risks require a little more underwriting time. For instance, getting documentation that the background checks are being done can delay the process."
Inefficiency is another challenge. "These are often small accounts, so the key is to be deadly efficient," explains Sadler. "Using a totally automated system for smaller accounts can streamline the process."
Dean says, "We often witness producers who fail to communicate the importance of excess liability limits to their clients. Limits required by venues may be a minimum standard, while exposure is actually much higher." He says premiums for higher excess liability limits may bring 'sticker shock,' but the benefits outweigh the costs in the event of a catastrophic incident. Dean recommends $1 million be the starting point, not the finishing.
Sadler warns of possible E&O exposures. "Many agents don't understand how certain common exclusions can impact a sports organization," he says. "Customized policy forms can minimize such exclusions, and knowledgeable providers can explain to agents the impact of exclusions."
Pitney has seen some agents miss out on opportunities to add value by overlooking data. "Agents and brokers, together with amateur sports organizations, can work with their insurance carriers and use data to drive risk management programs," she says. "For example, injury statistics from publications or an organization's own history can show the types of injuries most common within a sport or for a particular team or league."
This information can lead to discussions on how best to protect players. "Solutions can be simple, such as ensuring players are well hydrated before a summer soccer game in Texas, for instance," Pitney explains. Or they can be more comprehensive, like creating league rules on upkeep for football fields and protective equipment.
"Agents who use this data to work with amateur athletic organizations demonstrate their commitment to the partnership, as well as their industry expertise," she concludes.
BRINGING FUN TO INSURANCE—AND TO INSUREDS
Golf events, other promotional contests provide business-building opportunities
More than 30 years ago, John Everhart pioneered the concept of hole-in-one insurance. "When I first started, I would go to the national auto dealers show and attendees would walk up to the booth with confused looks," recalls the founder and director of marketing at National Hole in One Association (NHIOA).
"They would see this golf booth at their trade show and ask why a golf organization would exhibit at an auto show," he adds. He explained that his firm offered hole-in-one insurance, but the confused looks remained. "Today, it's like a household word," Everhart notes. "People know what hole-in-one insurance is." That's true of auto dealers, insurance folks, golf pros and virtually anyone involved in golf-related charity or corporate events.
Part of what made hole-in-one insurance successful early on continues to attract agents—and their prospects and clients—to the product. "It's fun," explains Greg Esterhai, president of US Hole In One (USHIO). "Honestly, when I talk to agents about it, one of the first things they tell me is how unique and fun it is. Their daily life often revolves around property and casualty insurance, assessing risks and crunching numbers. They think this is really cool. I agree."
Besides the cool factor, there are other reasons for agents and brokers to offer hole-in-one insurance to prospects and existing clients. "Obviously, they can earn additional commission revenue by selling the product," Everhart points out. "The more they write, the more they'll grow."
Another reason is the increased exposure to an attractive group of prospective clients. "It really boils down to great demographics," he comments. "The golf audience has wonderful demographics, with more than twice the average national income level. Also, many of the people who take part in golf tournaments—and most of them are charity driven—are business leaders. Many own or lead businesses of their own."
According to Esterhai, agents and brokers can use hole-in-one insurance to add value to—and even divert a bit from the monotony of—a traditional insurance program. "It's something different an agent can bring to the table," he explains. "It can help the insured's business grow, which is good for the agent, and it offers a discussion topic beyond the same old policy they've been renewing year after year."
There's no shortage of possible uses for the product. "There are literally hundreds of thousands of golf tournaments and outings across this country every year," Esterhai notes. "Local agents and brokers already are dealing with organizations that run or support these events, and they may not even realize it. Sometimes it's just a matter of raising the topic."
An insured promotion that Esterhai says is becoming popular brings golf into the showroom or other indoor venue. "We recently came out with an indoor putting contest," he says. "Everybody remembers 'The Price is Right,' with Bob Barker handing a contestant a putter and promising them a prize if they sink the putt. We provide the putting green and the prize if someone goes three-for-three at 25 feet. It's not as easy as it seems." What clients find especially attractive is that the promotion can be set up over a weekend, and hundreds of people can try their hand at it.
Charities, golf and country clubs and auto dealers are natural prospects, but the world of potential buyers extends far beyond these groups. Virtually any business or individual that runs a golf outing or tournament is a potential buyer.
The product is particularly well suited for agents and brokers who have a marketing or promotional bent and who already work to help commercial clients promote their businesses—something that's increasingly common these days. It's a relatively easy product to sell. "It doesn't require a long-drawn-out application process or 10-page document," Esterhai explains. "Plus, it's really inexpensive." Both National Hole In One and US Hole In One offer simple online and telephone applications.
The concept of hole-in-one insurance—building engaging and exciting promotions—has led to the development of related businesses. For NHIOA, it's sister company Grand Prize Promotions. For USHIO, it's Interactive Promotions Group. Each offers a range of non-golf insured prize promotions, ranging from games of chance and sporting contests to conditional rebates and more.
"We are underwriting agents for Lloyd's of London because of our experience and reputation in the contingent liability field," Everhart says. "All of these prizes come under the contingent liability banner, so we're involved in everything from simple promotions to large national programs—including national lotteries—with high limits that are built around sound actuarial data."
Winning with weather
Weather-related promotions are particularly popular with agents, brokers and clients, Everhart notes. "If it rains on your parade, of course event cancellation insurance is important, but there's also an opportunity to have some fun and build excitement with the weather," he says. His firm started offering weather-related conditional rebates with jewelers several years ago, and has grown to cover a range of retail and service promotions.
"Say a jewelry store has a consistently weak month each year," he says. "The store could advertise for people to come in during that month—March, for instance—and buy their wedding rings, and if it rains on their wedding day, they get some or all of the purchase price back. That's a prize promotion we can insure."
Unusual amounts of snow, cold temperatures, extreme heat and other weather events also can form the basis for insured promotions. "We've worked with heating and air conditioning firms that want to sell and install central air units in the spring—not in the middle of August," Everhart says. "If someone buys a unit in February and the county sets a new heat record for July or August, the buyer can get some or all of the purchase price rebated."
Esterhai's firm handles a similarly broad range of promotions. "We do everything from trade shows and showroom grand openings to half-court shots and field-goal kicks," he says. "One of our more popular contests is a dice-roll promotion. It's something that works in a lot of different situations."
The premise is simple: People show up at an event—a sale or grand opening, for example—and roll the dice for a chance to win a prize. "A Harley-Davidson event may have six dice with one letter on each side, and if someone spells the word H-A-R-L-E-Y on their roll, they could win a brand-new bike," Esterhai explains. "You could have 500 people there, and the whole idea is to drive traffic to the site."
Dice rolls work well at a range of retail events and are becoming increasingly popular at corporate events. "We've done them at corporate dinners and Christmas parties," Esterhai says. "You could have the top sales guy come up and roll three big foam dice on the stage. If his roll spells out W-I-N, he could take home $25,000—or whatever amount the customer wanted to insure."
Any agent who works with commercial or nonprofit clients who are looking to attract more attention or recognize contributors—or even just inject a little more fun into an event—has a ready-made prospect list. "Talk with the client or prospect and see how he or she could use this as a promotion," Esterhai says. "Is it a storefront business looking for more foot traffic? Is it an organization that wants to build excitement around an employee? There are so many different ways you can use this."
The idea works well with prospects as well as existing insureds. ""We're talking about promotional contest coverage," notes Everhart. "The first word there is 'promotional.' So many businesses are looking to promote something. Agents can use these insurance products as a way to capture a prospect's attention—to get a foot in the door, if you will."
Looking into 2013 and beyond, Esterhai and Everhart both see growth opportunities in the insured promotion arena. "We're seeing a trend toward electronic media," Everhart observes. "A lot of contests and games use electronic media to drive people to Web sites. For instance, our safecracker game lets people try a unique combination to open the safe and win a pot of gold."
At the other end of the spectrum, Everhart says opportunities also exist for highly complex promotions. "Our contingent liability status with Lloyd's allows us to be a resource for unusual risks," he says. "We have actuarial experience that would allow us to handle even the most complex risks or promotions."
Unless agents and brokers get heavily involved in selling hole-in-one or prize promotion insurance, they probably won't get rich from it. Still, it's worth considering. "The idea is to bring extra value to clients and prospects, align yourself with good causes, show clients you care about them and, of course, have a little fun while doing it," Esterhai concludes.
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