Americans continue to warm to annuities, and the Hispanic community can be part of that warming if insurers grasp what is important to Hispanics. If advisors embrace the importance of family, they will be able to cut through a thicket of data and reach the heart of the Hispanic consumer, experts say.
Some facts about Hispanics and annuities:
o U.S. Census Bureau estimates that the Hispanic market in America is expected to grow to 47.8 million in 2010 from 35.6 million in 2000;
o Production doubled for all fixed annuity products in first quarter 2005 over first quarter 2004 for Hispanic clients of Allianz Life Insurance Company of America, according to the company;
o Data cited by McDonald Marketing, Dallas, from the book “Racial and Ethnic Diversity” by Cheryl Russell, finds that Hispanics are 52% under the average for owning life insurance products, including annuities.
The picture that emerges, experts say, is one that has great potential if coupled with education about annuities and how they fit into financial services.
Annuities are wanted and needed by the Hispanic community, says Vince Vitiello, senior vice president of strategic initiatives, Allianz Life, Minneapolis.
Index annuities, which offer a guarantee and an upside potential, are popular with Hispanic clients, he adds.
The reason, Vitiello says, is that “there are a lot of first-time risk takers.” They are not comfortable with fluctuations in the market and prefer annuity products with guarantees and death benefits, he adds.
For this reason, there is not as much interest in variable annuities as there is with the fixed annuity, he continues.
The sensibilities may also be different, Vitiello explains: recent immigrants don’t want to die poor, but the mainstream consumer is looking to die rich.
He says that recent immigrants need companies to take an additional marketing step, which is to start by explaining what an annuity is. This needs to be available with bilingual marketing materials, he notes.
However, “it is not just about product” but rather meeting needs, he says. “If you are just selling product, you are doomed to failure. There needs to be trust both of the product and the organization.”
It is also about partnering with the Hispanic community. For instance, he says that Allianz Life understands education is important to the Hispanic community and has created a high school program, the Hispanic Heritage Youth Awards.
Understanding the nature of Hispanic clients is very important, according to Luis Strohmeier, certified financial planner based in Dayton, Ohio, with Summit Financial Partners, a division of AXA.