The following is one of four articles in a series about pioneers in the affinity insurance market who are looking to the future through the lens of the past. Learn how they got started and their vision for the future of the affinity insurance sector:
About Kelsey National Corporation
The history of Kelsey National Corporation started with current CEO Mark Kelsey's father, Van Kelsey Sr. (both of whom were PIMA presidents), who entered the affinity insurance market as a third-party administrator. By the mid-1960s, Kelsey Sr. had several accounts, including some independent insurance agents from property and casualty associations that he felt could act as third-party administrators while also delivering other insurance products. KNC grew from there, and its place in the affinity market was solidified.
At the onset, KNC’s products were focused on group disability, but the organization has shifted to offer primarily dental insurance and Medicare platforms in order to stay relevant and successful in the affinity market. Aside from shifting products, KNC president Avery Smith attributes the company’s success to a dynamic and diverse management team, as well as employees who believe in the core mission of the company and always aim to drive continuous innovation and improvement.
Smith is also a firm believer in humility. Success in the affinity space is about understanding your partners' needs and checking your ego at the door. For Smith, that means putting affinity and association branding first and foremost, keeping the KNC brand behind the scenes. Yes, KNC offers the platform and technology, but Smith wants to promote the affinity groups and associations they work with by showcasing their information and value proposition. Ultimately, that's what it means to be a successful administrator in the affinity insurance market.
The Future of the Affinity Insurance Market
According to Smith, the future of affinity industries will be shaped by one of their biggest challenges — the need to provide relevant products that offer value to members of associations while still maintaining a level of exclusivity. If products are easily attained by the public, membership in the association quickly loses its appeal.
In other words, it’s all about fit. Insurance industry leaders need to accurately assess the unique qualities of each association, and in some cases, they need to tailor a product to ensure it meets the needs of the association’s members. When KNC was in the disability space and working with insurance agents at The Hartford, for example, the organization was able to get agent commissions — a big part of annual income — counted toward compensation in disability claims. Not surprisingly, it made the product much more enticing to the member association.
Smith is confident affinity industries can overcome the hurdle because they’re equipped with more data about consumers than ever before. That information is allowing affinity insurance agencies to more accurately match products and associations, contributing to a better experience for both members and providers. In dental insurance, for instance, customers used to buy almost exclusively from a protection standpoint. When KNC created the web property dentalinsurance.com two decades ago, customers mostly wanted to have insurance in case an urgent need ever arose. Today, there’s been a major shift, and customers buy dental insurance as a means of access with the intention of using it almost immediately.
For affinity insurance organizations, it’s vital to stay a step ahead of these kinds of trends to reach an ideal balance of profitability and palatability for the consumer. In the internet era, consumers can conduct their own in-depth research into different insurance products, so affinity insurance agencies need to know where exactly the consumer is in the buying journey and what product they’re likely to love.
The Next Generation of Insurance Industry Leaders Can Push the Affinity Market Forward
In his 20 years of industry experience, Smith has seen firsthand a shift in consumer behavior that’s happened across industries. Younger generations in particular are looking more closely at the companies they’re buying from. They’re after a quality product and superlative service, but they also want to see evidence of a mission beyond mere profit. Insurance industry leaders who champion social causes, treat their employees well, and are active in the community reap real financial benefits from these endeavors — and values and beliefs will continue to be a priority going forward.
To help stay in front of these and other changes, Smith has a clear recommendation for affinity insurance agencies: Do a better job of recruiting young talent fresh out of college. As part of a forum addressing MBA students at UCLA and USC, he learned that insurance was ranked 99 out of the top 100 industries where the MBA graduates were headed. He wasn’t surprised, but he sees better recruiting practices as a key component of a more successful future for the insurance sector. Namely, drawing on the next generation of talent at an earlier age to keep the industry fresh and relevant.
Smith believes that PIMA can play a tremendous role in expanding the insurance industry’s pool of relevant talent, partly by offering a host of industry networking opportunities. However, PIMA is more than an association with two conferences. According to Smith, PIMA has been a place where KNC can learn and gain important affinity industry knowledge — from marketing strategies and cutting-edge data to trends in the affinity market and resources written by experts in the industry.
There’s so much information to help companies make better business decisions and opportunities to work with amazing people. For Smith, PIMA really brightens up his company's outlook on the industry.
If you're interested in learning more about how PIMA can help your company grow and connect with other insurance industry leaders, contact us today.
Published on October 12, 2021.
PIMA® (Professional Insurance Marketing Association®) is a member-driven trade association focused exclusively on the group-sponsored benefits market.