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Membership rewards: the economy and health care reform are opening the floodgates for more opportunities in affinity marketing.


Membership in an association or affinity group brings about networking opportunities, camaraderie with like-minded individuals and personal development and educational opportunities, not to mention added perks like insurance and employee benefits at discounted rates.

But the latter isn't something many individuals of these synergistic groups have taken advantage of.

In fact, reports MetLife, only 14% of members have obtained insurance through their primary associations, despite 37% having access to insurance through those groups.

That's now starting to change. One-third of respondents to MetLife's Expanding Business Opportunities by Understanding Member Preferences by Association Type study report being open to making such a purchase. And what they want in those purchases, said David Brennan, vice president of MetLffe's Association and Affinity Group Business, are "good deals, true value and a good level of benefits at competitive rates."

Their needs, he said, aren't unlike anyone else's. "They're concerned about having enough money to fund their retirement, to provide for health in the future and pay for bills in the event of a sudden income loss."

The time is ripe for affinity marketing, noted Douglas Furbush III, chief executive officer of Affinity Marketing Group. "People are buying insurance through their groups more than ever before," thanks to current headwinds like the economic climate and the health care reform debate "raising the whole topic of how employee benefits are delivered domestically," he said.

"That's opening up new opportunities for carriers, brokers and third-party administrators," Furbush added. As employers continue to shift responsibility of payment for benefits, or a portion of that, to members and employees, "it brings opportunity for alternative channels such as association, affinity or sponsored markets as another way to access quality benefits in the marketplace."

In Demand

Thinning margins and decreasing response rates have carriers searching for new and different ways to acquire customers in cost-effective ways, said Furbush of Affinity Marketing Group, whose sister company, Affinity Insurance Agency, partners with carriers to secure discounted rates on automobile, home, umbrella liability, boat and other insurance policies for associations and affinity groups.

Just five years ago, carriers were willing to provide underwriting concessions, if "it brought them a large enough prospect base in an association,' said Matt Dean, vice president of affinity group services for LTCI Partners, a general agency that offers long-term care planning to professionals and associations. "Today, however, unless it's an employer-employee relationship, those concessions are few and far between."

The bottom line, he said, is that affinity marketing is "a win" for all parties. "Members save money. Groups make money. Carriers get good, qualified customers that will last longer and be more profitable to them."


Auto, home and life insurance top members' lists of must-haves when it comes to association-sponsored coverage offerings, Brennan noted. "From a broker perspective, those coverages are a great entree into some of their prospects or clients. That, in turn, often leads to other product sales, provided there's a need by the member."

Liability insurance, disability coverage and accidental death and dismemberment, on the other hand, remain some of the leading products currently being sold through associations and affinity groups, he added.

MetLife's portfolio of association and affinity group member offerings includes everything from auto and home insurance to renewable and level term life insurance, accidental death and dismemberment, dental benefits and group long-term and short-term disability coverages.

"The opportunity is out there, and we're trying to offer a broad suite of products," Brennan said. "People typically don't want to buy everything all at once, so we continue to give them different options and channels to purchase those coverages and make that as convenient as possible."

Recipe for Success

What does it take to create a successful affinity marketing campaign?

"It starts with reaching the right decision-makers," said Mark Parabicoli, who manages Liberty Mutual's auto and home insurance voluntary benefit program. The company offers affinity auto and home insurance programs to more than 14,000 partners.

Human resource managers are tasked with benefit purchasing decisions for employer groups, while alumni directors and association presidents generally oversee that role for their groups, he noted. "Also, in those groups you often have people in different locations so it's a little more challenging to market to those populations. Therefore, you have to rely more on alternative and creative methods of communications."

While many association and affinity group members still are interested in being marketed to via tried-and-true approaches like direct mail, inbound telemarketing and agents, "it's important to go where the people are. And they now are all over--in their mailboxes, on their computers or tablets and on their smartphones," Dean said.

"In generating demand, it's all about finding the right mix of media," he said. "Ten to 15 years ago, it was about direct mail. While that's not completely extinct yet, there's less of a focus there today; you can't rely solely on it anymore. Companies also need email, websites, social media and face-to-face events like conferences."

Bill Vit, president of Aon Affinity, said "there are certain homogenous groups that, based on certain characteristics or qualities around risk exposure or events they face, need a customized solution." Vit's group offers specialty liability, life insurance and health benefits to millions of professional association members. It began 67 years ago with its flagship account, the American Institute of Certified Public Accountants.

"The challenge for us and our competitors is coming up with a product at the right price and delivering it in a way that meets the needs of a particular affinity group," he said. "This isn't a one-size-fits-all solution; there has been and always will be a need for customized solutions for these groups."

Today, the bulk of Aon Affinity's new business policies are purchased online, mostly through straight-through processing, Vit said. And while many members seek traditional coverages, he said, there's also growing interest in more "emerging, innovative" options like pet insurance and wedding insurance.

Affinity marketing is attracting more and more new entrants, said Affinity Marketing's Furbush. "Some old bylaw or philosophy of the group may have kept associations and affinity groups from offering the coverages to members before. But now they've changed their minds and they're looking for new sources of revenue to help attract and retain members"

The recent financial crisis brought about declining membership for many affinity groups. "Members couldn't afford to pay dues or were forced to select one group over another when there are competing groups," he said. "Dues, donations and grants are down for nonprofits; they're looking for ways to earn some of that lost revenue back by other means. A good way to do that is by offering member benefits like insurance."

Furbush's organization offers more than two dozen different member benefit programs free to groups, "a la carte, so an association can endorse one benefit or several depending on what they're looking for. The benefits provide a non-dues revenue royalty back to the association. We then marry up the affinity group with the benefit provider and act as a marketing facilitator between an insurer and the group to get the word out to their membership that products exist," he said.

Onward Bound

Marketing of insurance products and employee benefits to associations and affinity groups is a trend that will continue to grow, Dean said. "However, everyone has to understand that this isn't about a single transactional event," he said. "Rather, it's part of building a lasting relationship between the association and the member."


In the past, Dean noted, distributors often didn't understand that, along with the brand they were trying to build.

"It's a mindset change from transactions to relationships," Dean added. "That's the golden transformation ... these aren't just once-and-done events. Rather, it's a relationship that has to be recognized and fostered because that's what an association is--they want members to be members for life."

The future direction of health reform also will likely impact affinity-generated products, Vit said. "Unquestionably, the No. 1 question we now get from our clients and prospects is, 'How can I help my members with the changing face of health care?' That could bring about new offerings that association members will be seeking."

Key Points

* Setting the Scene: Only 14% of members have purchased insurance through their primary association, according to MetLife.

* What's Happening: The economy is driving the demand for products like auto, health and life insurance among affinity group members.

* Coming Up: Members are looking for new ways to be marketed and sold to, like through social media and online.

Learn More

Metropolitan Life Insurance Co.

A.M. Best Company # 06704

Distribution: Career and independent agents, wirehouses, banks

Liberty Mutual Insurance Cos.

A.M. Best Company # 00060

Distribution: Direct, independent agents and brokers, captive agents

For ratings and other financial strength information visit

RELATED ARTICLE: Different strokes for different folks.

Carriers and brokers need to segment the types of associations and affinity organizations they are targeting.

That's because certain groups have stronger connections or affinities, which present opportunities, said David Brennan, vice president of MetLife's Association and Affinity Group Business. "Therefore, we have to work it differently in how we segment those populations."

Unions, lobby/political associations and credit unions, for instance, typically have a greater interest in insurance products and access to insurance via their associations, Brennan said. Special interest and affinity groups, on the other hand, often present "higher hurdles" for those purchases. "They have less of an affinity but typically have a very attractive total number of eligible members, so that presents both a challenge and opportrinity based on those sheer numbers."

Somewhere in the middle are professional, government and alumni members, "who usually have high access to coverage but more moderate interest in purchasing insurance," he added.

Size, however, "isn't a critical factor for success," said Matt Dean, vice president of affinity group services for LTCI Partners. "Rather, it comes down to the brand that an association has established and fosters with its members.

"What makes an insurance program successful is at what level members believe that association is truly their trusted advocate--not just for a specific cause that originally united them but advocacy for their overall financial well-being," he said. "If the 'we've got your back' type of brand is established consistently, then members will respond to an insurance program. Without that, however, there's a big disconnect"

LTCI Partners offers long-term care planning to association members through "a consumer-friendly, relationship-first sales process. We use a call center of salaried consultants that work directly with association members on the phone by leveraging screen-sharing technology to have a virtual kitchen table conversation to help them find solutions for long-term care planning needs" Dean said.

"In today's economic environment, members want to know they have someone they can trust," he said. "If they belong to an association with a proven track record of advocacy for its membership, that organization is a great place to look for products and services like insurance."

Associations have much to gain too, Dean added. "They're always looking for ways to deepen their relationship with members and add value to what it means to be a member. Insurance can help them to do that."

Dean said it's difficult to gauge how many people actually purchase products via affinity marketing. He estimates that somewhere between 10% to 30% of LTCI customers are buying long-term care through an association rather than going directly to an agent, carrier or financial planner.

"That's why it is important for brokers and third-party administrators to identify leading priorities of a group's leadership, who are focused on retaining members and attracting new ones," he said.

Most consumers belong to anywhere from five to 10 different affinity groups, noted Douglas Furbush III, CEO of Affinity Marketing Group. "They just don't always think about all those memberships, like alumni groups, professional associations, credit unions, frequent flyer groups. Most of those groups often offer the same benefits but individuals tend to either sign up with the one promoted to them or they gravitate to the one they think is most recognizable in terms of offering benefits."

That's why brokers and carriers have to "tap into these sectors, especially in the middle market," Brennan said. "It's all about getting to those people and ensuring they understand the value of these coverages both for themselves and their families. Then you have to get them to act on that."
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Title Annotation:Health/Employee Benefits
Author:Chordas, Lori
Publication:Best's Review
Date:Aug 1, 2012
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