Keys To Entering The Hispanic Market
September 9, 2013 by Cyril Tuohy
Financial advisors looking to sell life insurance to Hispanic consumers need to know two facts about this growing demographic: the Hispanic population is growing fast and Hispanic Americans, many of whom come from or live with large families, place a premium on protection.
Oh, yes, and one more thing: the median age of Hispanics in the U.S. today is just 27 years old.
To be sure, those facts alone don’t define the Hispanic market, estimated at more than 50 million, or about 16 percent of the U.S. population. Distributors and advisors who keep these key points in mind are well on their way to making important inroads into the one of the nation’s most lucrative markets as the nation marks Hispanic Heritage Month from Sept. 15 to Oct. 15.
Advisors who speak Spanish have an even bigger head start for a market that seems ready-made for life insurance, Nilufer Ahmed, senior research director for LIMRA Insurance Research, said in an interview with InsuranceNewsNet.
Advisors also need to know whether prospects live in a multifamily household and whether heads of households send money back to their country of origin to help support an extended family still living abroad.
“Financial professionals need to know who’s who, who has income and know how to ask these questions,” said Ahmed, who recently published data with her LIMRA colleagues on Hispanics in a recent report titled “Financial Protection for Hispanics.”
Hispanics are more concerned about becoming disabled or unable to earn an adequate income than the rest of the general population. Concerns about dying unexpectedly without adequate financial protection is also higher among the Hispanic population than it is in the general U.S. population, the report found.
As with all markets, the Hispanic demographic is anything but homogeneous. This is one market that, for the moment at least, prefers to be sold life insurance the old-fashioned way: through face-to-face sales, whether at the proverbial kitchen table or in the offices of a financial advisor.
The Internet is gaining ground, but that channel is highly dependent on the ability to service prospects in Spanish, Ahmed said.
Hispanic life insurance consumers traditionally have seen life insurance as a luxury affordable to the very rich, which is often the case abroad but not in the U.S. That’s why financial professionals need to keep their life insurance product pitches simple.
“The simpler the product, the more likely it will sell,” Ahmed said.
Hispanics who are familiar with U.S. financial norms, have lived here for many years, and know something about insurance, are more likely to be receptive to a more complex life insurance product, Ahmed added.
Carriers have embarked on serious marketing campaigns to Hispanics for more than a decade as the Hispanic population has grown, particularly in Florida, Texas and California. MetLife, New York Life, Allianz, Nationwide and Prudential are developing products directed at this market, and a host of auto insurers also have targeted Hispanics.
Scott Hawkins, vice president and analyst with the financial services and insurance consultancy Conning & Co., said that insurers have long recognized that the country is changing, and that every new Census Bureau survey underscores the U.S. population’s inexorable march toward diversity.
Hawkins told InsuranceNewsNet that life carriers are not just translating webpages featuring products and services into Spanish, but are also steering consumers directly from the webpages to bilingual agents who can walk through a life insurance product in the mother tongue of a native Spanish speaker.
Big life insurance companies, he said, are also tailoring their approaches to Asians, LGBT customers and women, many of whom control larger portions of the household budget than men.
