All associations seek to offer their members affinity benefits. Martin Bell explains the best ways of ensuring that your insurance package brings the most to your members.

We live in an increasingly competitive world where organisations are assessed, benchmarked, and judged on the quality and cost of services provided. Trade associations and professional bodies are subject to the same pressures as profit making organisations. Members seek value for money and an ever-expanding range of benefits of membership.

Value-added services can be created in many ways, and a business insurance facility for the membership is just one. The purpose of this article is to offer an insight into how to create an insurance scheme which will be attractive both to the membership and to insurers.

There has been much press and TV coverage on the difficulties within the insurance market. A number of specialist association arrangements have been withdrawn over the past two years for differing reasons. Often the main reason cited by insurers is an inability to achieve a margin of profitability. But there are also others. These difficulties within the insurance market highlight the difficulties of making an arrangement which delivers a benefit to the membership and also offers the prospect of return to insurers, while being managed by a broker partner with whom insurers, the members and the association have confidence.

Value-added services can be created in many ways, and a business insurance facility for the membership is just one

It may seem strange to promote the idea of a bespoke insurance arrangement for your members at a time when the Insurance industry is unreceptive to new ideas. Insurers are seeking increases in the cost of cover across the board and are restricting coverage in a number of areas. The needs of your members are currently at their very greatest and therefore will be especially receptive and appreciative to an association-led initiative to manage the insurance expenditure and risks.

To successfully negotiate and launch an insurance facility for your members a number of factors should be considered.

Those associations and professional bodies with a business related membership have a significant advantage, as it lends itself more readily to creating a bespoke package. This is equally the case if the membership are individuals who are engaged in commercial practice / activities. If your membership consists of private individuals with domestic insurance requirements the task is more difficult. The vast range of options already available to them make it more difficult to launch a product which delivers any added benefit, either by way of cost or cover.

To create launch and market a business Insurance package of appeal to the membership tailor make the policy cover to their specialist requirements. There may be aspects of cover which may be added which are not readily available within the Insurance market. Because of the potential size of the block of business and reputation and standing of the association these may be made available. In other instances a standard business insurance package presented to highlight how aspects of cover meet the needs of the membership and their working practices may prove attractive.

Analyse the members' needs and in particular how these are evolving. Organisations are subject to new pressures, risks, responsibilities and potential liabilities. What innovative cover can be added?

The Insurance market likes to fit policyholders into specific boxes. If you do not fit into one of these boxes then the market may not be so receptive to your members needs. If this is the case, the opportunity for developing a branded product, which can be marketed throughout the industry or profession, is increased ten-fold.

People buy from people. We all make purchases based partly upon the person with whom we are dealing

Where the association operates, eligibility criteria for membership, whether financial or otherwise, insurers should realise that the membership represents a lower risk and therefore better quality business. Propositions to insurers which have not gained support in the past or existing facilities, which have proved unprofitable to insurers, can be " turned round ". Careful and accurate assessment of the risks and exposures combined with an innovative approach may lead to recommendations and a viable solution to be recommended. This may be for example incorporating a price differential dependent upon the attainment of certain standards.

Insurers like to see a premium potential for an association lead arrangement of £100,000 to £250,000 in order to bespoke a product. The precise figure depends upon the quality of the submission and the insurer concerned. Other options may be available for smaller blocks of business by utilising the services of a specialist Broker with a number of existing arrangements already in force. It may be possible to extend an existing facility to accommodate the additional business. In effect linking a number of association facilities together to achieve the quantum mass required.

Once the arrangement is in place, it is necessary to promote it? Work in conjunction with a specialist broker and distribute branded literature. Choose the broker carefully. Do they have an in house telesales facility? Is the style easy or hard? People buy from people. We all make purchases based partly upon the person with whom we are dealing. The marketing team should demonstrate a clear understanding of the members' requirements. A bespoke package helps to reinforce this point. The specialist broker team should have a working knowledge of the industry or profession.

These arrangements may take a number of months' hard work before the results envisaged start to be achieved. The first year is " sowing seeds ", and as awareness develops the facility will develop its own momentum and ultimately prove to be highly successful. Credit Card type cards can be distributed to members giving telephone numbers of the association on one side and the insurance and legal helpline on the other. If the affinity group is large enough it is always possible to create a joint venture company to launch and market the products. Fundamental to the success is the commitment to the association.

In summary, the difficulties within the insurance market mean that there has never been a better time to launch a bespoke product for the membership. An association led and sponsored initiative will be warmly received by your members and prove an important additional benefit of membership. Choose a Partner/Broker who you are able to work with and can demonstrate a success in creating and managing association branded products across a number of industries.