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Indian-Americans: The Secret Market

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The Indian-American financial services market is like a wealthy area the size of Milwaukee that has escaped the attention of many life insurers and life insurance producers.

Multinational giants such as MetLife Inc., New York Life Insurance Company and Prudential Financial Inc. have made their Indian-American marketing programs more than a footnote to their Asian-American marketing programs. They advertise on Indian-American television channels, sponsor Indian religious and cultural events, and make a point of hiring Indian-American sales representatives.

But, for the most part, the Asian-Indian market “is an exploding marketplace that’s not yet been tapped,” says Niraj Baxi, a Cupertino, Calif., life insurance agent.

Baxi, the son a former executive director of the Life Insurance Corp. of India, Mumbai, the biggest life insurer in India, came to the United States in 1979. Since then, he has built a thriving independent agency.

Meanwhile, the population of Asian-Indians living in the United States has skyrocketed, soaring to 1.7 million in 2000, up from 815,000 just 10 years earlier.

Indian-Americans speak many languages and come from many different regions and ethnic groups within India.

But a Census Bureau report on the demographics of U.S. residents who were born in India suggests that the typical Asian-American immigrant should be a great financial services prospect: in 2000, 38% of Indian-American immigrants over age 25 held graduate degrees or professional degrees, compared with just 8.9% of all U.S. residents in that age group, and about 15% of Indian immigrants had annual household incomes over $150,000, compared with 5.6% of all U.S. households. The median family income of an Indian-American immigrant was $75,000, about 50% more than the median family income for all U.S. residents.

Asian-Indian immigrants were about three times as likely as other U.S. residents to own businesses with employees and about 30 times as likely to own hotels or other lodging places.

Yet Baxi says he sees even fewer life insurance company ads in Indian-American newspapers these days than he saw a few years ago.

“I’m baffled,” Baxi says.

U.S. life insurers and insurance producers may worry about the challenge of explaining the need for life insurance to immigrants from some cultures that make little use of life insurance.

But most of the educated, entrepreneurial Indians who immigrate to the United States are highly conscious of the need for insurance protection and well aware of the need to plan for educational expenses, retirement expenses and other expenses, Baxi says.

Although Indian-American immigrants already own about 11,390 insurance agencies and brokerage firms, and producers in general have been doing a better job of reaching out to the Indian-American market than the carriers have, producers could be doing more to serve the market, Baxi says.

Researchers at LIMRA International, Windsor, Conn., surveyed 500 Indian-Americans with annual incomes over $40,000 in 2003. The researchers found that the survey participants were far more likely than other Americans to try to dispense with professional help and use the Internet to manage their own finances.

What does this mean for companies and producers interested in going after a hot new market?

The experts suggest some of the following:

–Insurers should consider doing business in India, and U.S. producers interested in the Indian-American market should look for products from insurers with operations in India. The LIMRA researchers found that Asian-Indian immigrants tend to prefer insurers that were familiar to them back in India.

–Both insurers and producers can reach out by advertising through Indian-American media outlets. The United States is home to dozens of Indian-American satellite television channels, weekly newspapers and websites, and experienced ad reps at those media outlets might have suggestions about networking events, sponsorship opportunities and other vehicles for reaching out to Indian-American prospects.

–Language counts. Although census figures show that 64% of U.S. residents who speak Hindi and Gujarati, the two most popular Indian languages here, also speak English very well, that means that 36% speak no English or speak it poorly. Moreover, even though many Indian-Americans speak excellent English, they like hearing their mother tongues, Baxi says.

–Expertise counts. Indian-Americans who have flourished in the United States because of their skills as top doctors, scientists or engineers will want to talk to advisors who really know their business, not just eager newcomers who can recite canned presentations. Indian-Americans also may need advisors who can answer questions with an international angle, such as, “Can my child use 529 college savings plan funds to pay to attend a university in India?”

–Look for Indian-American representatives. Indian-Americans do business with non-Indians all the time, but the 2003 LIMRA survey found that many Indian-Americans tend to feel more comfortable talking to other Indian-Americans.

–Emphasize annuities and life insurance products that can buffer purchasers against investment risk. Indian-Americans “are looking to preserve what they’ve built,” Baxi says. He notes, for example, that Indian-Americans are more likely than other customers to buy whole life insurance policies.

–Remember the business. In addition to having the usual need for college savings plans and retirement plans, the many Indian-Americans who own substantial businesses may need help with protecting those businesses against death, disability and other risks.

–Offer international coverage. Indian-American clients may need life and health insurance policies that will cover them when they travel overseas, and they may need help finding insurance coverage for friends, relatives and business associates from India who are visiting in the United States.


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