PRM™ and technology expertise are
differentiators for this Canadian broker
By Dennis Pillsbury
Duncan McCready is executive vice president of IC Group, Inc.
Promotions can play an important role in branding a company or one of its products to the public--creating an indelible impression that will result, one hopes, in increased recognition and sales.
Promotional endeavors can range from a local auto dealership offering a car for a hole-in-one on the Par 3 third hole, to a Fortune 500 company launching an Internet game where each participant potentially can win $1,000, to almost anything a company can imagine.
Let's take a look at one way to handle the first promotion mentioned: An auto dealership decided that it could afford to give away a car in exchange for the publicity and would take the risk, i.e.. self-insure. But what happened? That once-in-a-blue-moon event occurred. Several golfers scored an eagle on the third. The owners of the dealership pointed to the contract and said, "Oh no, we promised only one car," and found to their chagrin that the anticipated positive publicity now has turned to a discussion of how they welshed on their promise.
Scenario two: A Fortune 500 company hired a company that promised to create a virtually unwinnable game. The company then self-insured, based on that promise. The game hit the Internet. The hackers hacked. The unwinnable game's code was broken and the "cheat codes" were available over the Net. The Fortune 500 company yelled "foul" when several thousand winners asked for their money. The company soon found that the only thing unwinnable was its position. It either had to pay out huge sums of money right away or--renege, get sued, maybe win in court at some point in the appeals process, suffer significant adverse publicity and pay out huge sums of money to the lawyers or--flat out lose in court and pay out huge sums of money to the once-customers-now-claimants and to their lawyers.
How would you like to be the agent for either one of the two aforementioned entities? Wouldn't you feel a lot better if you were called in when your client was planning the promotion and you were able to help mitigate and transfer the potential cost?
Manage, mitigate, transfer
IC Group, Inc., Winnipeg, Canada, offers promotion incentives expertise throughout the world--expertise that includes risk management, risk mitigation, and risk transfer. Started from scratch in 1989, IC has grown rapidly. Today, the company employees 50 people and has supported programs in 21 countries. It has binding authority with Lloyd's of London to offer prize insurance in more than 60 countries. In addition to the headquarters in Winnipeg, IC has offices in Toronto, Calgary and Vancouver in Canada, in Las Vegas and Chicago in the United States, and in London, England. It also has established a presence in South Korea through a strategic partnership with Crepos Co.
"From the moment we started, we recognized that managing risk was extremely important in this field. Proper mitigation coupled with risk transfer allows an organization to deliver far more powerful incentive promotions."
--Duncan McCready
IC Group does much more than provide prize insurance. It actually starts working with an agent's clients at the planning phase of a promotion, using its Promotion Risk Management (PRM™) to analyze a variety of factors including prize pool and seeding structures, odds calculations, game piece distribution, production processes, game mechanics, consumer communications and marketing support, and so on.
"From the moment we started," Duncan McCready, executive vice president, says, "we recognized that managing risk was extremely important in this field. Proper mitigation coupled with risk transfer allows an organization to deliver far more powerful incentive promotions. Our PRM process gives us the depth to design and help implement promotions, providing our agents' clients quite simply with peace of mind."
Once the promotion is agreed on, IC Group works with the agent and his or her client to integrate insurance with the promotion in order to limit the financial risks associated with awarding too many prizes or fulfilling too many offers.
Online technology
"Several years ago, clients started coming to us asking about moving promotions to the online world," McCready says. "We've been building products and developing technologies over the past five years that have allowed us to offer numerous online incentives that can be customized for individual company promotions. IC Modus is the result. It's a secure and versatile technology platform that stands behind our Internet games and Web sites." The IC Modus technology platform is built with a series of modules so companies can custom design online solutions to meet specific sales and marketing goals.
"Recently we launched an incentive solution for Kraft in Canada where people can play for a prize of up to $1,000," McCready adds. "There's a potential for 23 million players in the marketplace. That's a total potential liability of $23 billion."
He continues: "Clearly, the security of the system is integral to making sure that the promotion performs correctly. We have a staff of 15 people dedicated to online risk management mitigation. It's their job to make certain a game is playable and interesting in order to increase traffic to a company's site and ultimately increase recognition and sales. At the same time, they have to make certain that the odds can't be tampered with by hackers."
Connecting with agents
IC's technological expertise also has been used to enhance service to its agents. McCready notes: "We've developed rating platforms so our brokers can go online and rate risks in the contingency area (primarily skill-based promotions such as hole-in-one, etc.). Policies can be bound online. We're also working on rating other types of promotional risks online as well. The same type of flexibility we've used in IC Modus is being used to develop our broker online communications. We recognize that not all quotations are cookie cutter but are working to provide as much as possible online. Brokers can negotiate with underwriters online. Whenever a broker inputs information about a particular risk, we can tell almost immediately if it will fall within normal boundaries. If not, then the broker and underwriter will get together online or on the phone and work on changes. Once they've reached an agreement, the policy can be bound online.
"We understand that our brokers are under pressure to operate efficiently and hold down expenses. We've developed this online capability to help them realize that goal," McCready adds.
"Promotion risk management and prize insurance really is something unique that brokers can offer to their customers," McCready concludes. "It creates a wonderful win-win situation where the broker can support a revenue-enhancing effort of his client and also enhance his own revenue stream in the process."
What's next?
"Kids today are growing up with computers," McCready notes. "When they enter the workforce, they'll expect business to be conducted online as much as possible. There's an acceptance of technology in their generation. We believe we're on the front end of the curve.
"Technology also is offering other venues for future promotions. We are developing promotions using IVR (interactive voice response) and wireless applications in addition to the Internet. It is very interesting and we're excited to be able to respond to these new technology developments." *
For more information:
IC Group, Inc.
Web site: www.icgroupinc.com