Fireman's Funds Travel Program

<B> Fireman's Funds Travel Program</B>

By Sarah Welt

<i>Novato, Calif.</i> - Fireman's Fund Insurance Co. is cutting dollars off its $14 million travel and entertainment spend through a new meetings strategy, new technology, benchmarking with industry buyers and negotiating discounts with preferred suppliers.

A year ago, following an increase of $500,000 in its $7.5 million annual air spend, the company created travel manager Courtney Linley's position. "We needed someone to look full-time at finding ways of saving money," Linley said.

For its first cost-saving initiative, Fireman's focused on consolidating meetings. Rather than combining its transient and group purchasing through its local American Express agency, it turned its meetings business over to American Express Group Services in Dearborn, Mich., in June. The company is relying on Amex for air only. All other meeting needs are handled by Fireman's internal meetings department, which has been beefed up with the addition of a third full-time planner.

Linley said that Amex's transient operation did not have the software to document meetings costs and savings. Amex Group Services, on the other hand, now provides Fireman's with city cost analysis, better information on arrivals and departures, and a meeting budget review.

On the transient side, online booking is now at the top of Fireman's agenda. It plans to test AXI but also is evaluating Xtra Online, Sabre's Business Travel Solutions and Internet Travel Network. A test is planned for August or September.

Fireman's is also looking at automated expense reporting. It has evaluated Portable and Extensity and is open to looking at others as well.

Said Linley, "We are working closely with our IT department to determine which expense systems fit within the framework of our internal system."

Today, travelers who spend more than $2,000 on travel receive the company's American Express corporate card and submit pre-trip approval requests reports to their managers. If their travel spend is below what was approved, travelers fill out an online travel authorization request in Lotus Notes and then use a ghost card.

The entire company has access to Lotus Notes. A travel database that resides on the system contains Fireman's travel policy as well as information on air, hotel and car rental agreements. No intranet exists at Fireman's, though it is a project on the drawing board for next year.

While the company does not have a specific savings target, "we are working every angle, trying to get costs down as much as possible without sacrificing service," Linley said.

To that end, Linley has begun benchmarking with other American Express customers. "We network in the industry to make sure we're on the right track. We decided we could be more effective as a team," she said.

The group of nine travel managers had its first meeting in June, along with top management at American Express, in San Francisco. "We are working with Amex to see how to improve communications and we are getting good response from Amex on this project," she said. The group plans to meet bimonthly.

To help enforce its travel policy, the company uses Topaz International to perform audits on tickets purchased, and monthly reports are sent to Linley. Travelers are required to take the lowest fare that falls within 90 minutes of the preferred departure time, or they can fly another carrier if the fare differential is not more than $150.

American Express, Fireman's agency since 1992, must stay above 98.5 percent in providing travelers with the lowest fare. Otherwise, it is responsible for paying for the audit in a given month.

All travelers fly coach domestically except for senior management. If a trip is international and lasts seven hours or more, travelers can fly business class. The policy also clearly states that both back-to-back and hidden-city ticketing are not allowed. Said Linley, "It doesn't fall in the shared value of our company. We don't condone it and our agency knows it."

Fireman's has negotiated discounts with two airlines, United as its primary and Delta as secondary. The company does not have net deals, and does not get overrides from its agency. "We thought about net deals, and we were thinking about charging each department for the cost of the travel agency," Linley said. "At this time the administrative costs are prohibitive based on our internal setup."

Where the firm was previously on a management fee, in November it switched to a contract under which it pays nothing, but allows its agency to keep all commissions earned on the account.

Negotiating hotel properties is another area Fireman's is improving. It plans to begin using online RFPs as early as September. Linley said Fireman's negotiates directly with properties and all hotel deals are net of commissions.

Linley credits a good relationship with senior management with helping improve the travel program and find savings. She reports to Al Jackson, director of corporate events and travel, who in turn reports to David Kliman, vice president of corporate administration, who started Fireman's travel department 11 years ago.

Linley's advice to other travel managers is simple: "Network as much as you can. You can learn so much from each other in terms of bettering your travel processes.