No Business Like Snow Business


By Erin Chambers For winter warriors who spend most of their weekends on the slopes, a season ski pass can save a bundle. But what happens if you break your leg on the first run of the season? Traditionally, you're out an entire season's worth of lift tickets. And on the other side of the ticket counter, if you're a ski-resort owner or operator, you're likely to be confronted by an annoyed, crutches-bound pass holder demanding a refund.

Ron Iverson, president of Tourist Insurance Services, set out to solve both problems -- and his startup is reaping the benefits of staking out an untapped market. "There was a complete void," Iverson says. "Nobody was serving pass holders, so we decided to step in."

For 6% of the season-pass price, which typically runs around $1,000, a SkierGuard insurance policy gets you three-way coverage: loss of pass use due to injury, emergency evacuation of up to $15,000 if you have to be airlifted or transported off the mountain, and a maximum of $10,000 for accidental death or dismemberment. SkierGuard is underwritten by National Union Fire Insurance Co. of Pittsburgh, a division of AIG (AIG). Though similar offerings are available in Canada, SkierGuard is believed to be the only such service in the U.S.

ONE-STOP SHOPPING. And business is booming. Iverson and his three-employee team sold over 700 policies before Thanksgiving, the unofficial start of the ski season, after a lukewarm debut last year that saw only 150 policies sold during the entire season. Like many small-business owners, Iverson realized that finding a niche is one thing, but exploiting it is another.

He knew the idea was promising, but it obviously wasn't reaching a large enough consumer base. Some press releases led to mentions in a handful of ski magazines, but his marketing operation was far from robust. So this season, he brokered deals with the ski areas like Aspen, offering a 10% to 12% commission to sell his pass insurance at ticket offices and on their Web sites.

That initiative has streamlined the process into a single transaction for customers, who last year had to go online or call SkierGuard to get policies after purchasing their passes. Iverson has also stepped up marketing efforts, placing print and online ads and generating local media coverage in ski towns like Lead, S.D., where he runs ads on the Terry Peak ski area's radio station.

Since agreeing to hawk the insurance alongside season passes at Aspen Skiing Co., which operates three resorts in Colorado, including Buttermilk, Iverson says they sell 15 times the number of policies per month this year than they did all of last year. Seventeen ski areas, including Mammoth Mountain in California and Mountain Creek in New Jersey currently offer the policy. Anyone can still purchase the policy online or by phone, regardless of whether the ski area endorses SkierGuard or not.

NORTHERN EXPOSURE. "The big deal for the ski areas is not the additional revenue, but it makes life a lot easier in terms of customer relations," says Iverson, who also owns SkierGuard's parent company, Tourist Insurance Services, which has offered recreational policies, like trip-cancellation insurance, for over 28 years.

Though some ski resorts do offer their own insurance, many others are opting to offer SkierGuard instead. "I like the fact that the skier doesn't have to buy it at the front end, they can think about it and buy it later," says Larry Daniels, general manager of Alyeska Resort in Girwood, Alaska, who had to buy a $150 insurance license in order to sell SkierGuard. "It seems like a great value for our skiers, but it's still new for us this year."

At Whistler Mountain in British Columbia, Canada's largest ski area, Iverson's sales are growing because the resort no longer offers any refund policy to its pass holders.

Though Iverson relies on a healthy number of resorts to sell the policy, some major ski areas still prefer to deal with season-pass refunds internally, on a case-by-case basis.

ANYONE FOR GOLF? "A middleman in the process doesn't work for our resorts," says Kelly Ladiga, a spokesperson for Vail Resorts, which currently offers injury- or pregnancy-related refunds to pass holders who provide medical documentation. But Ladiga acknowledges that SkierGuard is something Vail may consider in the future, especially since it offers additional coverage for evacuation and death.

What's next for SkierGuard? Iverson says the season-pass policy model would work well with virtually any annual or seasonal memberships where potential injury would be an issue, such as health clubs. He has also been approached by a Maryland-based outfit which operates more than 30 golf courses about creating a GolferGuard. "But I've got my hands full to brimming with snow right now," jokes Iverson. Winter wonderland indeed. Chambers is a reporter for BusinessWeek Online in New York


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