The Economics of CAS Meetings—
There's No Such Thing As A Free Lunch

by Christopher S. Carlson, CAS Vice President-Professional Education

While studying the exam covering economics, we learned the fundamental principle that everything eventually costs something. Your own CAS is not immune to this tenet, as I came to find out in my first year as CAS vice president of programs and communications (now professional education). The bottom line is, it costs money for us to get together. I guess I always knew that, but I never realized the full extent of the underlying costs of holding our meetings and seminars until I recently took part in a CAS-commissioned task force reviewing our meetings. Those of you who have asked me about our fees, especially the guest fees, have probably learned more than you really wanted to know. When you see the registration fees listed in meeting brochures, I think you should have some sense as to what goes into them. Knowing that actuaries love to understand parts of the cost/price equation, I provide the following information.

Typical Food and Beverage Costs at CAS Spring and Annual Meeting
	Avg. Per Attendee Cost	# of Events Per Meeting	Avg. Cost Per Person, Per Meeting
Breakfast	$25	3	$75
Lunch	$40	1	$40
Reception	$60	2	$120
Dinner	$105	1	$105
Breaks	$10	4	$40
Total			$380

The major cost component of our meetings and seminars is food and beverage charges. The above chart displays the typical costs for breakfast, lunch, receptions, dinners, and breaks during CAS Spring and Annual Meetings. These costs include the added service charge and taxes. While they might seem excessive, these costs are very common and typical of the quality hotels we use in most U.S. cities. The service charge is typically between 18 percent and 20 percent and the state and local taxes, as we know, range from about 5 percent to 10 percent.

As you can see, the lunch is far from free, which is also true of the other events that include food or beverage.

At the CAS Spring and Annual Meetings, the registered guest program typically includes three breakfasts, two receptions, and one dinner for a fee of $200. From the above, you can do the arithmetic and determine that the indicated fee is $300, before including overhead. While we are often encouraged to subsidize this program, you can see that we already do, although not to the extent some would like. (Is that not always the case?)

Beyond the food and beverage costs, the next major component would be audiovisual costs. The CAS rents each LCD projector, used to project from laptop computers, for an average of $750 per projector per day. Add to this the video and sound projections at Monday's business and general sessions, and you get a typical cost of $32,500 per meeting. With an average of 650 attendees per meeting, this results in an average cost per attendee of $50. The CAS recently purchased one LCD projector. The machine paid for itself after being used at just a few meetings. However, having our own machine also requires a CAS staff person to set up, support, and safeguard the projector, as the hotel and audiovisual technicians do not assist with equipment not rented from the hotel.

Having a featured speaker is an excellent way to gain some insight into related parts of the business world around us. The fee for a speaker typically runs $15,000, about $25 per attendee. Perhaps more people will attend this part of the program after learning the cost.

These expenditures are what we consider the direct costs. To this total, we need to add the expenses of CAS Office staff, including their travel. Our staff does a wonderful job orchestrating our meetings and working with the hotel and other vendors. We also allocate the meeting planners' salaries and benefits costs among the various meetings and seminars.

A number of miscellaneous costs, such as speaker gifts, also add a few dollars. Another cost is the subsidy for invited guests and certain invitees for whom meals and other incidentals are provided by the CAS. Though not large, these do contribute to the total expenses and thus the per-member cost for paying attendees.

With food and beverage costs an obvious target for savings, one would think the CAS could save significantly by cutting back or eliminating some of them. However, one other fact of life is that there are additional costs and penalties involved in contracting with hotels. If we do not fulfill the contracted room block (usually about 400 rooms on the peak night at the big meetings), we incur a financial penalty by having to cover the costs of those unused sleeping rooms. Also, in order to obtain the use of the meeting rooms at no additional cost, the hotel develops a minimum amount they expect the CAS to spend on food and beverage. The expected food and beverage revenue is added to the expected hotel sleeping room revenue. The sum of these two creates our overall expected meeting revenue minimum. If we do not meet this minimum amount, we are subject to a meeting room rental charge to make up the revenue shortfall. As an example, if we were to take our receptions off-site for a lower cost, we would run the risk of not reaching the hotel's expected food and beverage minimum revenue. In our registration fees, we do not build in a risk load for this possibility, but perhaps we could.

From these figures, you can see how we develop our meeting and seminar fees. In a recent study, we found that our meeting and seminar registration fees are perhaps the lowest in the industry. The SOA member costs are at least $900, ASPA fees are $795, CIA registration for a full meeting is $1,050, while the CPCU Society charges roughly $530 for members and $275 for guests, without breakfast or lunch. Many professionally developed programs have fees in the range of $1,750 to $2,000 for two-day seminars.

We acknowledge the heavily subsidized SOA guest fee of $75, but do not feel that level of general subsidy is appropriate. At a ratio of one guest to five attendees, for example, our member registration fees would need to be increased by at least $25 to be revenue neutral at the $75 guest fee level. We are already increasing the member fees roughly $25 per meeting to cover our increasing costs. An additional increase at this time would not likely encourage additional member attendance—our first priority—and would be inequitable to those attendees who do not bring guests.

We hope this information helps you better appreciate how our registration fee structure is based upon our underlying costs. As actuaries, we are well suited to understand the cost-based pricing and subsidy issues associated with determining registration fees for our meetings and seminars.

See you at a meeting soon!