To Realize Markets Potential, Discard Myths, Old Thinking

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To truly realize the potential of the Hispanic market, the life insurance business has to put myths and old thinking aside, says Joseph D. Moya.

The founder and president of Pegasus Insurance Group, Albuquerque, N.M., Moya is also president of the International Association of Hispanic Insurance Professionals, an Albuquerque-based agent group for the life, health and property-casualty industries.

“We are more than numbers; we are a culture,” Moya says, but adds that understanding that culture goes beyond asking what the mortality rate is.

“There are certain myths that the insurance industry has perpetuated on itself,” says Moya, and among them is that the Hispanic market has no money and is low income.

“Hispanics have money and spend more of that disposable income than any other group,” he says, and since family is important, they have the “willingness and love” to spend money to protect their family.

The wallet power of Hispanics is expected to reach $778 billion by 2005, according to an article by Jeffrey Humphreys, director of the Selig Center for Economic Growth.

Insurers commitment also needs to be real, he says. “It is not a matter of whether they should be in the Hispanic market. It is a matter of when they get into it in a focused manner,” Moya adds.

But, he contends, “the focus is lacking,” a state he calls “mystifying.” Many companies get together a few of their brochures and translate them rather than taking a complete approach to reaching Hispanic consumers, he says.

For companies that get beyond that mentality and really become a presence in the Hispanic community, there is tremendous loyalty that translates to contract persistency, Moya says.

Breaking through the myths requires understanding Hispanic culture and that, according to interviews, begins with appreciating the importance of family and the Spanish language.

“We are a very diverse community. We are not a monolith,” says Juan Job, corporate vice president-cultural marketing division, with New York Life Insurance Company. But a common thread reaching to the heart of the whole Hispanic community is providing for family, he adds.

Anything that affects the future income of a family, such as business succession planning, is a topic that will interest the Hispanic community, Job explains.

And, in order to get the message out that you can help their families, Job says there are a number of potentially effective methods, including participating in community organizations and businesses, and advertising in Spanish language television, radio and print.

The Hispanic community is “not a uniform market,” says Roberto Allen, an associate with Saul Ewing LLP, a law firm in Baltimore. But what is a uniform need in being able to reach this market, he says, is for the agent, and not just back-office staff, to be bilingual.

The reason, according to Allen, is that the “relationship is important to the Hispanic consumer. It goes beyond a business relationship.”

Being present in the community is an important start, says Allen, who is president of the Baltimore Hispanic Chamber of Commerce.

Hispanics have the same insurance needs as any other group of consumers, says Steven Larsen, a partner and vice chair of the insurance practice with Saul Ewing, and former Maryland insurance commissioner. But they need companies which can better market and reach them, he continues.

For instance, he says, more companies could consider putting policy language in Spanish so people “dont have to struggle through policies.”

Hispanic consumers “need to know they are being talked to. And, for sure you are being talked to, if they are speaking your language,” says Hector Orci, CEO, co-founder and co-chairman of La Agencia de Orci Asociados, in Los Angeles.

If your market is the Hispanic community, then Spanish language TV and radio are very effective ways to achieve this goal, Orci says.

The cost per thousand viewers for Spanish television is 40%-60% less than for English-language television because you are reaching a higher percentage of your targeted market, he says.

But “in the Latino market, all media forums are available and all work if used properly,” Orci continues. The population is exploding, so “we have plenty of people who watch TV, go on the Internet and open their mail,” he says.

Providing information is a good way of reaching that market, he says, adding that when you provide that information, keep it simple.

Hispanic consumers are loyal to a brand but also have the highest rate of product trials before lending their support to a product, he notes.

Reaching the Hispanic market means being within reach, says Nancy Dwyer, executive vice president of American Skyline Insurance Company, Baltimore. American Skyline sells personal lines and small business insurance in the Baltimore-Washington area.

Being within reach of the community can range from speaking engagements to having a booth at a neighborhood street fair with agents present to close on contracts, she explains.

Other ways that American Skyline reaches Hispanics include advertising in Hispanic newspapers such as Washington Hispanic and in the Spanish Yellow Pages, Dwyer continues.

The company also plans to advertise on cable TV, she says. Spanish radio is another possibility, although Dwyer says it is expensive. However, she adds, she is optimistic that Hispanic groups to which her company belongs can help negotiate rates a 2-year-old company can afford.

But knowing and acting on what the community needs may be the best way to become part of that community, interviews suggest.

For instance, statistics released by the Census Bureau in March 2003 indicate that Hispanics have the lowest rate of high school and college graduates among racial and ethnic groups.

Although those interviewed say that growing affluence is changing this, they acknowledge that trying to fulfill a need can bring a company closer to the community.

As an example, State Farm Group, Bloomington, Ill., provides 20 annual scholarships of $2,500 to Hispanic students pursuing a teaching career, says Jenny Davis, Senior Program Coordinator with State Farm Companies Foundation. The program is administered by The Hispanic Scholarship Fund.

And, Ben Austin, a spokesman for the New York City Fund for Public Schools (Fundforpublicschools.org), enumerates several ways corporations can help Hispanic public school children including funding school libraries in Hispanic neighborhoods, college and career centers within these schools, and scholarship and internship programs for the public schools Hispanic students.


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.