Excellence Winner The Value of External Communications Tools Lisa Lewis PartnerRe Ltd. Pembroke, Bermuda Need/Opportunity / PartnerRe spends US$3.4 million on external communication materials and events in an average year. In addition, every communication tool requires substantial employee effort, often by underwriters. At the end of 2007, corporate communications received ad hoc feedback from the underwriters challenging the value of the client newsletter PartnerReviews. With the creation of every edition, PartnerRe experienced constant push back from underwriters to generate article ideas, write and/or approve its content. The company was ill-equipped to respond to the challenges as it didn t know whether clients read the newsletter, what they read and if they found it valuable or not. After conducting a benchmarking exercise at the end of 2007, looking at all client communication channels compared to PartnerRe s industry peers, four projects were initiated to help address the findings: 1. Reviewing the strategy and process for PartnerRe s client publications (i.e., PartnerReviews) 2. Further developing the company s advertisement campaign to better use all media options 3. Enhancing and refining the current marketing system 4. Upgrading the web site and enhancing its content PartnerRe knew that before moving forward, all of these projects would greatly benefit from a deeper understanding of the value these communication tools bring to the sales process. At the beginning of 2008, the reinsurance industry was facing a declining market, and the corporate communication team anticipated that the development, enhancement or elimination of any current tools needed to be heavily supported by research-based recommendations from both the underwriters as well as clients in this cost-sensitive environment. Intended Audience(s) / The target audience for the online underwriter survey was a 185-strong underwriting team, who are predominantly based in Zurich, Paris and the U.S., and who participate in and should benefit from the support that the external communication efforts provide during the sales process. They have, on average 27 years of experience in the industry. The target audiences for the client survey, conducted by phone, were key decision makers of _ 293
worldwide insurance companies (1,500) who were existing clients, and who could influence reinsurance buying. One hundred and three clients in 42 countries on five continents were identified by underwriters for interviews, 80 of which ultimately participated in the survey. The selection and distribution of respondents per geographic region was defined by the company s premiums over the past six years. Of those chosen, 35 percent were top executives of their companies, 54 percent were management at the senior vice president level and the remaining 10 percent were vice presidents or below. Each client company represents, on average, US$500,000 of revenue per year. The primary audience for the results of this survey were the company s business unit managers. These eight individuals manage teams of underwriters and, on average, a US$400 million book of business. All male, they have an average of 31 years of experience in the industry. Half are actuaries, and all of them, because of the technical nature of their business, prefer to work with quantifiable data. In order to achieve the company s goals to show that the client communication tools do provide value to the sales process, and get a seat at the table during strategic discussions about work objectives it was important for PartnerRe to provide research-backed data and recommendations. The secondary audience would be the 185-strong underwriting team who participated in the underwriting survey. As stakeholders who drive demand for these communication efforts, it was particularly important that PartnerRe could demonstrate its value, and highlight (if any) where the perception gaps existed. Goals and Objectives 1. ROI: The primary goal of the study was to measure whether the cost and effort to produce client communication materials matched the value they provided to PartnerRe and to achieve an ROI of at least 100 percent for 2008. While researching six different aspects of value to use for the ROI calculation on the survey, PartnerRe defined value as having a communication piece lead a client to contact the company a concrete behavior that can be quantified monetarily. 2. Obtain quantitative data to help recommend to management which communication activities the company should continue, develop or eliminate in order to effectively support underwriters marketing activities. 3. Gain management s buy-in to recommended changes in terms of budget and the schedule of new or changed communications for 2009. PartnerRe wanted the corporate communication team to become a valued discussion partner with senior management by using research-based recommendations about client communication efforts to help PartnerRe effectively deliver on key business objectives. Solution Overview / Members of the corporate communication team from group (HQ), global (non-u.s.), and U.S. offices, located in four countries partnered with Sinickas Communications to _ 294
develop and implement two surveys one for clients and one for PartnerRe s underwriters. The project leader and representative for the U.S. office was also the creator and designer of the underwriter survey. Issues considered and tactics adopted included the following. SURVEY APPROVAL (June July 2008) PartnerRe needed the underwriters buy-in in order to move forward. A series of cascading presentations and meetings (from the company s executive down to the underwriting teams) were conducted to highlight how PartnerRe and its underwriters would benefit from this measurement exercise. These were followed up by supporting communications (standardized e-mails) to help sell the idea of the survey to the selected clients. This was critical as the company s clients had just completed an annual industry survey two months earlier. SURVEY DESIGN To ensure that any perception gaps could be easily identified, many parallel questions were created in the client and underwriter surveys. For example, clients were asked how much influence each type of communication had on various elements of the sales process, and underwriters were asked how much influence they thought the same communication had. To ensure there was as much relevant feedback as possible to help the project move forward, the survey was segmented into five sections, which mirrored the project task list that was set late in 2007. While this made it a potentially very long survey, the communication team offset this by having branching questions at the beginning of each section. If a respondent wasn t aware of the communication, he or she moved to the next section. To ensure the comments collected by survey respondents reflected the right communication materials, a PDF file showing samples of all the communication materials being discussed was distributed ahead of time and referred to throughout the survey interviews. (This also had the added benefit of increasing awareness of PartnerRe on a very direct level, with many clients who were not aware of some of the materials.) A recent industrywide survey by clients identified key decision making factors for selecting reinsurance. The communication team measured how well its communications supported these factors to help further demonstrate the value that its client communication efforts brought to the sale process. Implementation and Challenges / The overall budget for the research project was US$154,200. This included additional analysis comparing client research with an annual industry study. While the communication team was careful about the reinsurance workload and renewal periods with its initial scheduling, there were other mitigating factors that could have impacted the response rate, including summer vacations in ope and the closing of the renewal period for the company s U.S. clients. In response, the survey response period was extended by two weeks, which allowed the team to include more U.S. responses. _ 295
The complexity of the client market (several geographies, different lines of business, non-life and life clients) proved to be a great challenge for the communication team. This meant the team had to be very selective with the demographic breakdown of the target audience. Based on cost and timing, the company s life market segment was omitted from the survey sample. This was a tough decision, considering it is one of PartnerRe s growth areas, but it meant that the communication team could concentrate on the larger segment of its client base. This also meant ParterRe had to be very organized and flexible with its interview techniques. Bilingual interviewers located in four different time zones (both the west and east coasts of the U.S., and western and central ope) conducted telephone interviews with clients over the course of four weeks. All questions were translated into the corresponding native language, and responses were then translated back into English in order to compile the results. This required a considerable amount of resources. Another challenge was that PartnerRe s underwriting team had just completed a tough renewal period, and were probably already suffering a little bit from survey fatigue (they were involved initially in getting the client survey off the ground). To ensure PartnerRe had the maximum response rate for the underwriter survey the communication team offered a selection of desirable incentive gifts (PartnerRe-branded ipods, fleeces and laser pointers) to those underwriters who completed the survey. This technique worked by achieving a 62 percent response rate for an online survey something the company had never achieved before. While PartnerRe experienced one course correction and two key challenges, the project was still completed on budget, with valid results. Measurement/Evaluation / Goal No. 1: To measure whether the cost and effort made to produce client communications matched the value they provided to PartnerRe, where value is defined as effectively supporting the underwriter s marketing activities and business objectives, building awareness and knowledge about PartnerRe, and positively influencing client behavior (defined as a communication leads a client to contact PartnerRe ). Results/Outcomes: 4 As a true measurement of the value of client communications, PartnerRe calculated that the ROI on all client communication tools in 2008 was 135 percent. This was calculated using the metric that 16 out of 80 surveyed clients said PartnerRe s communication tools led them to contact PartnerRe. The investment in client communication tools in 2008 was US$3.4 million. Average premium per client = US$500,000 Multiplied by the number of clients (16) = US$8 million of revenue (US$8 million US$3.4 million) / US$3.4 million = 135 percent ROI* * Note that ROI would be even greater if PartnerRe applied the formula to 20 percent of all its clients (300 out of 1,500), not just the 20 percent of surveyed clients. _ 296
4 When the communication team looked at events in particular, the ROI is 900 percent: Investment in events in 2008 was US$1.8 million. Thirty-six out of 80 clients said that events encouraged them to choose PartnerRe over others. The average premium per client (US$500,000) x 36 clients = US$18 million revenue. (US$18 million US$1.8 million) / US$1.8 million = 900 percent ROI 4 Research showed that PartnerRe s communications do support the key decision-making factors when selecting reinsurance, with over 85 percent saying that PartnerRe s communications demonstrate the company s expertise and financial security; more than one-half also find that communications are somewhat effective in strengthening their relationship with their underwriter, building understanding of the company s pricing approach and promoting value-added services. Goal No. 2: Obtain quantitative data to help recommend to management which communication activities the company should continue, develop or eliminate in order to effectively support its underwriters marketing activities. Results/Outcomes: 4 The communication team was able to show some key perception gaps. For example, underwriters were underestimating the value of some of the materials that clients found particularly valuable PartnerReviews newsletter, 7 Questions to Ask Your Reinsurer, and PartnerRe s research reports and risk essays. As a consequence, distribution of these materials was poor. A powerful outcome was that the chief underwriting officer (CUO) in the catastrophe business unit recognized that a simple step could be taken to better target the team s marketing efforts. The CUO took the initiative to set up a yearly process to review and update the company s client mailing list (for publications distribution) and insisted that the team (in Bermuda and Zurich) start the initiative immediately. 4 The team proved that events make the most impact, where 39 percent of clients responded that events led them to choose PartnerRe over other reinsurers; research reports and Partner- Reviews impact client knowledge and views of PartnerRe. 4 The communication team also measured openness to new media tools such as blogs, podcasts and webinars. Goal No. 3: For the corporate communications team to become a valued discussion partner with senior management by using research-based recommendations about client communication efforts to help PartnerRe effectively deliver on key business objectives. Results/Outcomes Due to the challenges PartnerRe faced in its business units, the communication team knew it would only achieve its goal through a series of steps. The first step, taken in September and October 2007, before the busy renewal season, was to give copywriters enough proof of value to get them to agree to _ 297
further discussions when they tackled their marketing plans in the new year. In late 2008 and early 2009, following the presentation of results to both the U.S. underwriting team and global (non-u.s.) management team, corporate communication team members have been actively included in strategic discussions about marketing plans and client communications. PartnerRe s strategy has been to start with discussions about its marketing objectives and any challenges it faces in achieving its goals. Once the company can articulate exactly what communication steps it needs to take to achieve its goals, it will be able to identify the best communication tools for success. Conclusion and Next Steps 4 The goal for 2009 is to continue carrying out discussions with the underwriting teams and eventually help them align their business objectives with high-value communication tools. The data will be used to support or influence decisions about those communication tools and budget allocation. 4 PartnerRe is currently tackling the four projects publications, advertisement campaign, web site, and marketing system, within the context of the survey s findings. _ 298