Producers who serve Hispanics say that while their needs are no different than other clients, understanding Hispanic culture makes it possible to more effectively reach out to them.
National Underwriter spoke with agents in the most densely Hispanic populated U.S. markets including Houston, Los Angeles and Miami to learn what Hispanic consumers want when agents come calling.
In his work with the Latino community, Reuben Mercado, a financial planner with Space City agency in Houston who represents Prudential Financial Inc., says there is a level of financial conservatism among Hispanics, particularly older clients.
The “old school” might not have had a good experience with investing in their native country and are more interested in fixed annuities, he says. They are happy, he explains, if they invest in CDs and often ask whether products have the protection of the Federal Deposit Insurance Corporation.
Younger Hispanics are willing to take a chance and accept more risk in products including variable annuities and mutual funds, Mercado continues.
And, in some cases, the younger generation is encouraging parents to venture into products with investment components, Mercado says. But, when this happens, they are not looking at tech stocks but at variable products with guarantees and death benefit features, he explains, because there still needs to be some security.
Generational differences also exist when long term care comes up, says Mercado. The younger generation is more open to the product, he continues, but for the older Latino male, there is less of a willingness to admit that the wife and kids will not be able to provide care. So, it often takes the experience of a brother or an uncle to make the benefits of LTCI apparent, he continues.
Service is important, based on conversations that Mercado says he recently had with several Hispanic business leaders in the Houston community. The message they delivered in those conversations, he says, is “I need people to talk to, not 800 numbers.” A lack of personal contact creates a feeling of mistrust and a lack of caring, he continues.
And, that need for a personal touch of a business relationship built on friendship and long-term ties parallels the importance of family in the Hispanic community, Mercado explains.
He relates the length one client went to in order to maintain good relationships among the clients children. When the self-made business owner was ready to retire, he sold the business and purchased individual businesses for each of his children in order to avoid squabbling, Mercado recalls.
What helps an agent in serving this community, he says, is corporate sponsorship of events that build relationships within the community.
That relationship is also built when the insurer recruits Spanish speaking agents, Mercado says, and he estimates that if he could not speak Spanish, his book of business would be about half of what it is.
It would also be valuable if insurance contracts were written in Spanish, although he acknowledges that this is an expensive commitment for companies.
“The needs of the Hispanic community are huge. They are dying to talk to people like us,” says Antonio Bolado, a New York Life agent based in Los Angeles. There is a “hunger” for insurance products given the growing affluence of the community as reflected by factors such as increased home ownership, he continues.
Bolado has seen this growing affluence firsthand. The businesses of 3 clients, he says, have grown dramatically. One construction company he worked for when he first came to this country is now worth over $500 million and 3 other companies are worth more than $300 million, he adds.
The immigrant has the same needs as other consumers with the only difference being the number of zeros behind the total need, he says.
Hispanic consumers want to take the love they feel for their families and buy protection for those families, he says. And for insurers who are able to provide reliable service, Bolado notes that “word of mouth is a powerful thing.”
That word of mouth can be facilitated with Spanish advertisements in all media or with Web sites such as one established by New York Life to reach out specifically to the Hispanic community, he continues.
But, Bolado notes, he does not think that the insurance industry as a whole is ready for the market at this point, citing a dearth of Spanish speaking agents. “This market is huge, huge, huge. And it is just waiting for us.”
Many Hispanics are small business owners, so business succession advice is among the services that could be valuable to the community, says Paul Castillo, a financial representative with Northwestern Mutual Financials Waltos Group in Newport Beach, Calif.
To reach the community, Castillo says it is important to be part of the community and participate in activities such as the Hispanic Chamber of Commerce.
To better reach the community, a language certification program is encouraged by the Waltos Group, says Bob Waltos, a CFP and CLU who is the managing partner with the Waltos Group.
Providing access to specialists in areas such as 401(k) products is also a way that Northwestern Mutual offers grassroots support to agents, he adds.
Oscar Pina, an agent with Pina Financial Group, a Coral Gables, Fla., office of MetLife Financial Services, cites the importance of loyalty to brand name. This said, however, he notes that the quality of product and service also is essential because of the premium Hispanics place on it.
So, Pina adds, “it is very important to explain benefits and options because if you dont, clients will feel shortchanged.”
But if agents do this, clients will respond, he says. “70% of my [new] sales come from existing clients.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, March 12, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.