Targeting The Mid-Market
Life Insurance Buyer
At least 50% of the life insurance companies that LIMRA International follows say they are targeting the middle market or have mid-market units, according to Lynn M. Ferris, associate research consultant in markets research at LIMRA.
But to be successful, marketers need 3 things, she said in a speech here. “You need to build relationships with the people. You must educate them, because they dont understand the products. And you must keep it simple.”
If one of those is missing, she said, the effort will fail.
The comments came during a life insurance conference co-sponsored by LIMRA, LOMA, the Society of Actuaries and the American Council of Life Insurers. Ferris was reporting findings from 9 focus groups of life insurance shoppers. Conducted at the end of 2003, the research examined views of shoppers aged 18-64 in the $25,000 to $100,000 income range. Ferris and Pete Jacques, another LIMRA researcher, headed up the project.
Another session at the conference also explored reaching life insurance buyersbut its focus was on how to do so now that the federal Do Not Call legislation has been implemented. As discussed below, the advice from that session was: Concentrate on getting referrals and on cross-marketing the existing customer base.
The LIMRA study of mid-market buyers comes at a time when many observers are asking how the industry can better reach this market.
In the 1990s, the industry focused mostly how to reach high-net-worth buyers. That gave worksite marketers plenty of room to woo the mid-market with streamlined products sold at the workplace. But now, the individual life industry is once again looking at ways to reach the mid-market with its richer and more varied products.
The median annual income for this market is $42,200, said Ferris, noting that 57% of the market has an income range of $25,000 to $49,999. The high end earns $100,000.
The demographic varies widely in household composition, values and many other details, Ferris noted. Even so, the focus groups found shopping tendencies.
For example, family values, including a parents purchase of life insurance, is a “strong indicator” that the person will shop for life insurance, said Ferris. And, although life events like birth and marriage continue to be triggers for such shopping, “loss of a job or loss of a life insurance benefit at the job” have become triggers as well. Some people who had gone through such losses now are saying, “Wow, I never realized how important that life insurance was!” Ferris said.
One finding that may come as a surprise to veteran life insurance professionals is that the first person that mid-market people tend to call, after deciding to look for life insurance, is their own property-casualty agent.