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April 18, 2004 at 08:00 PM
Recruiting Hispanic Agents Could Be
The Answer To Many Industry Woes
A typical insurance company executive is having difficulty sleeping. Tossing and turning with questions and problems: “I need more applications,” “I need new distribution,” “I need new markets,” “I need better persistency and more profitable products,” “I needI need….”
Id like to help this executive sleep. An answer to all these problems can be found in the largest untapped insurance market in U.S. history–the 40+ million Hispanic market population.
“Should the life insurance industry be recruiting to the Hispanic market?” This question is tantamount to asking: “Is the sky blue?” This is a no-brainer for any company or organization seeking to take advantage of the fastest growing consumer group in America.
And this recruiting effort could not come at a better time since recruiting in the life industry is a serious problem that has grown worse over the last 20 years. LIMRA estimates that the life field force has fallen from 250,000 active agents in 1981 to approximately 175,000 today–this at a time when the population has increased dramatically.
The results of this poor recruiting effort are equally dramatic. The average age of the life insurance agent today is 52. On average, agents produce only 45 policies a year. The fact that 11 million policies will be placed in force this year contrasts with the finding that 33 million people have asserted that they would like to purchase additional life coverage. There is a 3-1 imbalance and Im reminded of the many agents that continually moan that they have no one to see! Our delivery system is broken and it is time for repairs to begin in earnest.
Companies need to examine the Hispanic market and what it brings to the life insurance industry. First, the numbers are there. At about 40 million, the number of Hispanics in the U.S. is bigger than the entire population of Canada. Hispanics accounted for more than 50% of the entire nations growth during the last 3 years. By 2015, one in 6 Americans will be of Hispanic descent.
Second, the need is there. Hispanics have strong family and spiritual values. These values make insurance, especially life insurance, a necessity and not an additional expense. Third, the money is there. While Hispanics lag behind non-Hispanics in household income, they are increasing their earning power at a faster rate (6.1%) than non-Hispanics (2.7%) since 1998. Hispanic buying power was $582 billion in 2003 and it is estimated that this buying muscle will be $975 billion by 2007. The myth that Hispanics are poor and uneducated is exactly that–a myth.
