Despite tired riffs on the country’s expanding waistline, Americans today are more active than ever.
Roughly 50.3 million Americans belonged to a health club in 2012, fueling the industry to reach an impressive $21.8 billion in revenue, according to the International Health, Racquet, and Sportsclub Association (IHRSA). The total number of health clubs in the country has also increased, growing to 30,500 in 2012.
The emergent focus on fitness is cause for celebration, and not just for the nation’s health professionals. Insurance agents and brokers are also finding these new enterprises a great way to grow their books of business, whether by specializing in health club accounts or simply working with local organizations.
“Health clubs and fitness studios are an easy starting point for an agent that’s new or trying to build up some business,” said Lita Mello, senior vice president of the recreation division at K&K Insurance. “Getting in with some of these smaller operations in strip malls, or individual yoga studios or fitness centers is a great way to earn a decent commission. There are new operations popping up all the time.”
Business has been so bountiful, K&K’s roughly 20-year-old health club program is enjoying great levels of success from agents working with accounts ranging from sophisticated, high-end operations to small studios of less than 3,000 square feet. Individual programs cater to full-service health clubs, basic service operations, limited services with lower revenues and small exercise or personal training studios.
A range of exposures
One thing most accounts have in common is a risk exposure relating to exercise equipment. According to Mello, some of the most common insurance claims involve people falling off machines or otherwise injuring themselves.
For clubs with a swimming pool or shower area, slip-and-fall exposure is also great.
In addition to standard property and liability coverages, some operations also face unique exposures due to their offerings. Clubs that provide babysitting or child-watching services, for example, may want to look into sexual abuse and molestation coverage. Commercial auto for clubs with onsite vehicles is also a consideration.
The quoting process
While agents don’t need to know everything to start working with health and fitness operations—as underwriters provide much of the needed expertise—there are a few things Mello likes to see in an agent partner.
“If a broker wants to get into this, they need to do their homework and make sure they complete our supplemental applications that are specifically geared toward that program,” she said. “The more information and detailed answers they provide on ACORD forms, the better able we are to underwrite and price the account appropriately.”
Mello adds that agents don’t necessarily need to shy away from a stack of paperwork—particularly if they are working with smaller, local accounts.
K&K’s Exercise/Personal Training Studios program allows agents to quote, purchase and pay for all the necessary insurance policies through their agent portal. To qualify, studios need to be less than 3,000 square feet and offer personal/individual training, exercise, aerobics, yoga, pilates or circuit training activities under direct supervision of a fitness professional.
And because no prior appointment is necessary for agents to work with K&K, it makes for a quick purchasing process and simple commission for the agent.
These smaller studios also provide the greatest opportunity for agents, Mello said.
“Whether you’re a little town of 1,000 people or New York City, these facilities are on almost every block,” she said. “These are pretty health accounts from a premium standpoint, so commission levels are quite good.
“It’s good business for agents.”