The life insurance business is facing an unprecedented falloff in insurance purchase rates by Generations X and Y, those born after 1965. Interestingly, these age groups know they are underinsured, especially if they have families, but they have not corrected the situation. At the same time, recruiting agents in these generations is also becoming increasingly difficult. In fact, the average life insurance agent is now 57 years old. So how do insurance agents/brokers connect with the younger generations? This question spawned research into the attitudes towards life insurance within these generations.
Life insurance marketers have for the large part treated Generations X and Y as relatively homogeneous groups. However, these groups are anything but the same when it comes to attitudes towards life insurance. These differences were the topic of a presentation at LIMRA’s Marketing and Research Conference last week in Boston. Joseph White, Senior Director of Marketing Sciences at Maritz, and Todd Silverhart, Corporate Vice President and Director of Insurance Research at LIMRA, discussed the results of a study designed by Maritz Research and LIMRA in partnership with research panel company Clear Voice Research.
With respect to attitudes towards life insurance, the research revealed five distinct groups prevalent in both generations:
Help Wanted: These people have higher incomes, are educated, and could be considered financially responsible. Their defining attitude was the belief that life insurance is part of a sound financial plan. These people are the most likely to be insured. They seek expert advice from insurance agents, financial advisors, and even friends when doing their planning. While brand awareness is a key selling strategy for this population, it’s important to ensure that their potential advisors also have the company top of mind.
Up and Coming: This group looks a lot like Help Wanted from an income and education perspective, but tends to be younger and therefore have likely not experienced triggering life event, such as having a child or getting married. They view life insurance as something that can be put off until later and have no real viewpoint on life insurance. The key for this segment is to make brand awareness so high that when they do seek life insurance, you are among their first considerations.
Value Shoppers: These people are fiscally responsible, are the most likely to be saving for retirement, tend to be less risk averse, and aren’t worried about losing their jobs. They believe that life insurance is part of a sound financial plan and that adults are supposed to have life insurance (although only about half of them understand how or why). This suggests the marketing strategy is to leverage the long-term security a policy provides and perhaps how life insurance could help with retirement planning.
Relationship Oriented: About average age with a little more than average income, this group has the highest rate of life insurance ownership and is the least price sensitive about purchasing a policy. These people place a high value on having a relationship with their life insurance agent/broker, with regular agent/broker contact being the real defining characteristic. Given their reliance on professional advice, the market entry point is likely the same as with Help Wanted, through the professional advisor network.
Financially Challenged: These folks are just trying to make ends meet. They are the least educated, most likely to still live at home, are more likely to be the youngest Gen Xers, and have the lowest of all incomes. This group just has too much debt to think about life insurance.
Maritz Research and LIMRA continue to further explore the data to better outline potential marketing strategies to more effectively reach these audiences. Stay tuned to this blog for more information in the coming months.
