While watching news anchors play with an endless array of interactive maps and fancy data boards during last night’s election coverage, I noticed a few trends that will also impact — or are already impacting — the life industry. Here are three of my major takeaways:
1. Demographics matter.
After Obama was declared the winner and pundits started parsing the data, it became evident that his victory was based largely on his ability to attract large numbers of young, female and minority, especially Hispanic, voters. Indeed, that’s key for any election — or sales —effort these days. The election made clear what most people already know simply by looking around their neighborhoods: the face of America is changing. What was once a country dominated by white males of European origin is morphing into a diverse society, where more women than men hold college degrees and minorities hold major sway, in both an economic and electoral sense.
Those demographic changes are important for the life industry and its agents to keep in mind. Life insurance sales thrived for decades when agents catered to the “man of the house” — before that term, and sales approach, became completely dated. Today, the lady of the house wears the pants and buys them, too. In 2008, wives out-earned husbands in 35 percent of households. If the trend continues at the same pace, higher-earner wives will become the norm by 2024.
The same goes for Hispanics. In May, a Nielsen report estimated that Hispanics represent $1 trillion-worth of buying power. Latino households earning more than $50,000 are expected to grow at a faster rate than the total number of households. And the trend likely won’t slow down anytime soon; it’s estimated that 60 percent of Hispanics are under the age of 35.
The financial services industry, including life companies and agents, has been slow to accept these changes, though. Research by the Boston Consulting Group has found it’s the No. 1 area where women say their needs aren’t being met. If the life industry has any hope for sustained profitability over the next few decades, that’s going to need to change
2. Personal is paramount.
Call it the bespoke election. Campaigns this year were able to hone in on a small sliver of undecided voters, learn everything they could about each segment and then develop customized messaging to try to sway them one way or the other. If you wavered on your candidate choice at all this year, both campaigns could likely tell you the type of car you drive, the restaurants you like to frequent and whether you’re a briefs or boxers man.
Thanks to the Internet, this is how marketing works now. If you search for macaroni and cheese recipes on Google, you’re going to see ads for Kraft on every website you visit for the next two days. Your Facebook feed contains promos for products your friends have liked. And, when you’ve got a minute, Netflix has a few film recommendations you might want to check out. The amount of data on you is endless, and it’s feeding a marketing pipeline that never stops tailoring itself to fit your current needs, wants and desires.
Insurance agents have long prided themselves on their personal touch; it’s what keeps them relevant in an age when everyone does business over the Internet, they often tell me. So the advent of personal data can be both a curse and a blessing. On one hand, your prospect’s Google search for “life insurance” is going to serve up an ad designed to appeal to her demographic, and she’ll be able to click through, share her financial data via something like Mint.com or her bank website, and purchase a policy — before you’ve even had a chance to knock on her door. On the other hand, that ad she sees could be yours.
3. Nothing lasts forever.
I was in college when George W. Bush won a second term, and the day after the 2004 election, one of my professors stormed into the classroom, threw down his laptop satchel and gave an angry speech about how our country was going down the drain. Last night, eight years later, many of my conservative friends did the same thing, via Facebook. (For all that divides our nation, we’re apparently not so different from one another when we lose.)
If you’ve been through a few elections, they can serve as a great reminder that nothing’s permanent. Anyone and anything, given enough time, can suffer a reversal of fortune, even when it comes to the mighty life insurance industry. Sure, it sells a product that’s been around for centuries, but — as my colleague Brian Anderson has spent the better part of this year detailing in a series of articles — the way that product is sold is increasingly under threat. It’s clearer than ever that consumers aren’t being adequately served by the life industry. Life policy ownership rates are at historic lows, the industry hasn’t kept up with the advent of Internet and mobile shopping and many people report they haven’t been contacted by an agent in years. The industry can work to evolve — quickly — or it can become antiquated and irrelevant. Either way, it’s not going to stay the same.
Did you learn anything from election season? Tell me in the comments section below.
For more from Corey Dahl, see: