The baby bust is over!
According to Demographic Intelligence’s U.S. Fertility Forecast, more babies are on the way, with the United States expected to register more than 4 million births this year. Meanwhile, the ideal family size has increased, from 2.39 persons in the late 1990s to 2.66 in 2010.
The good news is that the insurance industry has benefited from this trend. There was a 2% increase in 2011 for the number of life policies issued, only the fourth time in the past 30 years that life policy sales have been up. But even though app count is up, individual policy ownership is down from 72% in 1960 to 44% in 2011. Interestingly, a 2011 LIMRA study reported that one quarter of uninsured households (8 million) say the reason they have not bought life insurance is because no one has approached them about it.
It’s up to our industry to do a better job of reaching out to the younger generation, encouraging them to take personal financial responsibility and educating them about the role insurance plays in protecting their future.
What works — and what doesn’t
The market is there. The challenge is to figure out the most efficient and effective way to reach them, based on their preferences.
- Telemarketing drawbacks — The days of phone canvassing as the best and only way to reach your market are over. An increase in the number of registrations on the nationwide do-not-call list (201.5 million in 2010, up from 107.4 million in 2005) and the preference for cell phones over landlines, especially among younger people, makes it more difficult to connect with prospects.
- Purchasing preferences — The LIFE/LIMRA Barometer study found that 67% of adults ages 45-64 and 78% of those age 65 and over prefer face-to-face purchasing sessions. However, 1 in 5 consumers would rather buy direct from a company via the Internet — a group that includes younger adults (ages 25–44), Hispanics, and the affluent (household income over $100,000). The study noted that more than 8 in 10 used the internet last year in some way during the insurance buying process, with 22% having visited a life insurance website.
- Social media influence — While, in general, most consumers (59%) still rely on friends and family for purchasing advice, online sources (search engines, online articles and social media) are in the top six most influential sources of information, according to one study. And a 2010 ExactTarget study reported social media (Facebook pages to blogs) as the “fastest growing digital marketing channel.”
The bottom line: our industry needs to increase the use of the Internet and social media to deliver our message. Companies are very slowly coming to the realization that they need to accommodate the agents’ needs to reach the market through social media, and they are taking the steps to deal with the compliance issues associated with this new marketing paradigm.