As the fastest growing and by some measures wealthiest minority, Asian-Americans would seem the choicest target for any number of product marketers. And the financial services business is no exception.
Many of the biggest names in life insurance–New York Life, Prudential, AIG and Transamerica–all have unique strategies aimed at capturing the group the U.S. Census Bureau in its 2000 study said has the fastest growth rate of any racial group in the nation, with a 49% spike in the last decade of the 20th century.
AIG and Transamerica stress their ties with Asia going back as far as the end of World War I.
Rick Niu, AIG vice president, multicultural marketing, notes his company was actually founded in China in 1919. “A global brand with deep roots in Asia resonates well with Asian-Americans,” Niu says. “Today the company operates through AIA, Nanshan, Philam Life, Tata AIG and other household brand names across Asia.”
Bill Tate, senior vice president and chief marketing officer for Transamerica Occidental Life Insurance Company and Transamerica Insurance and Investment Group, says his company first opened its door in Shanghai in 1933 and in Hong Kong in 1947. “We’ve served communities in the U.S. and Asia for many years through several general agencies that are owned and operated by Asian-Americans,” Tate says.
But proud traditions only can go so far in satisfying the financial needs of a group who place great stock in both education and business ownership.
According to Census 2000, Asians have one of the strongest rates of business ownership, managing more than 800,000 enterprises nationwide that generate $302 billion in annual sales.
And Asians also have the highest level of educational attainment of all groups in the U.S. with 44% holding at least a bachelor’s degree.
So, what does this means when it comes to the purchase of protection and investment products?
Born and raised in Beijing, Niu got a firsthand look at Asian cultural attitudes when it comes to saving and investing, while his MBA from Columbia helps translate that understanding into success on the financial services playing fields.
“While viewed traditionally as risk-averse, cost-sensitive and in favor of guarantees in any purchase, Asians are developing more risk-taking attitudes as the world becomes more global,” Niu says.
Thus, Asian life insurance companies that used to focus on simple endowment policies now have started sophisticated investment-linked products similar to their Western counterparts.
And the same could be said for their relatives who have settled in the U.S., with traditional cash-value whole life policies and fixed annuities no longer the staples they once were in the Asian-American portfolio.
“Over the years, as they have become wealthier and more integrated into mainstream America, they have become more receptive to other mainstream choices, such as return-of-premium life, universal life and equity-index products,” Niu says.
And not only less risk-averse but more selective as one focus group conducted by AIG American General showed. Chinese Americans in California taking part in that study typically compared a minimum of three life insurance carrier/product choices before making a decision.
“This has led to the rapid development of independent distribution targeted at Asian-Americans,” Niu says.
Tate says Transamerica focuses on term and universal life insurance. “With the financial objectives identified by this population, life insurance is an ideal solution. It can provide for families and business continuation, help fund a college education, and the cash value component of universal life insurance is as attractive as a built-in savings vehicle,” Tate says.
How you reach this segment is critical.
Tate quotes a LIMRA study noting that 80% of Chinese Americans who own life insurance purchased it through a life insurance producer. “Face-to-face interaction and personal relationships are highly valued and overwhelmingly preferred,” Tate says. “Whether they are independent agencies or institutional groups, it is the personal relationship that producers create with clients that make the programs successful.”
But even with increasing assimilation, cultural sensitivity remains a critical component in marketing to generations of Asians-Americans. Niu says that although Asian-Americans through the decades gradually treat English like their own language in a mainstream lifestyle, “their heritage is well-kept and their pursuit of the American dream never changes and you must respect that.