LP Gas, March 2010

L I A B I L I T Y I N S U R A N C E Continued from page 44 We certainly understand and will strive to have as competitive a premium structure as we can Dorweiler adds That being said if members are just looking for a cut rate price and they discount the other objectives of the program long term stability etc it will defi nitely be a tougher sell Thats one reason we made a long term commitment to NPGA It may take several years Lockton will earn a standard brokers commission on premiums paid to AIX Dorweiler would not specify the rate Cash for the coffers The affi nity plan carries the added incentive of churning a new revenue source for the association NPGA will collect royalties for allowing Lockton to use its name logo and membership list to promote the program to marketers Roldan says it will earn a fl at fee for each marketer that enrolls in the program The fee schedule is tiered to reward a higher volume of participants Fees will be less for marketers that retain existing insurance agents rather than enroll with Lockton directly Roldan declined to identify fee amounts Although NPGA has no revenue from the program budgeted this year Lockton projects it can 3500 3400 3300 3200 3100 3000 2900 2800 2700 2600 2500 3000000 2500000 2000000 1500000 1000000 500000 realize 30000 to 200000 annually based on a marketer participation rate of 50 275 Assuming an even split between marketers enrolling through their agents and through Lockton Roldan says 150 participants would earn NPGA 45000 annually It would hit 100000 if 300 marketers sign up he says The enticement is timely Like many associations reeling from the fallout of a brutal economy NPGA has had to pare operational expenses while tackling some of the most daunting industry issues in 40 years A 95 percent drop in total membership since 2006 has cost the association hundreds of thousands of dollars in dues revenue It has fallen more than 300000 since 2008 due in large part to marketer consolidation and the two year withdrawal by Ferrellgas The association is expected to ask its multi state marketers for a temporary special assessment to help balance its 2010 budget NPGAs Executive Committee also has approved a 3 percent across the board dues increase for 2011 The bump is expected to generate another 70000 annually Yet Doyle and Roldan adamantly deny the insurance program was initiated to fi ll strained association coffers This is not about NPGA making money this is about providing a service to members From the beginning thats what this has been about Doyle emphasized The real driver of this program is the perception by marketers Total NPGA Membership 3350 2005 3414 2006 3294 2007 3130 2008 3080 2009 3085 2010 NPGA Dues Revenue 2345941 2006 2664187 2366310 2008 2007 2424362 2009 2351384 2010 that their insurance choices are inadequate One aspect of association management is to address the needs of the membership whether real or perceived We know we are doing something that is driven by the membership based on what we have consistently heard from the Member Services Committee and from past surveys Roldan added We also have an obligation in how we manage the association to keep dues as low as possible One way is to allow members access to programs like this that benefi t them and generate revenue Unfair competition Marketer participation will determine the affi nity plan success Lockton offi cials say they need 30 50 marketers paying a total of 3 million to 5 million in annual premiums to start the program Sustaining it will require 10 million to 20 million about 12 percent of the industrys estimated premium total each year they claim Lockton has conceded to use insurance agents already engrained in the propane industry to bring marketers into the program We intend to work with the local agents of propane marketers if thats what they want We have no intentions to dis Continued on page 48 0 46 LPGas March 2010 www LPGasmagazine com