Life insurers seeking organic growth amid a perfect storm of persistently low interest rates, a still struggling economy and intense competition for baby boomers should perhaps start casting their nets wider and reach out to the underinsured and often neglected Gen X segment.
Gen X provides a tempting target for carriers and their intermediaries, given the segment’s stated desire to buy life insurance coverage potentially worth $3.6 trillion over a 12-month period — higher than any other demographic segment, according to LIMRA’s calculations. The question is how to effectively reach Gen X prospects.
Currently, acquisition costs are often considered too high to incentivize many agents to spend time selling to Gen X. At first glance, it may seem that the pursuit of this segment necessitates more resources than what’s required to reach other generations, but Gen X’s high brand loyalty is very likely to help defray the initial acquisition investment through additional product sales over time.
However, infiltrating this demographic might require novel approaches and innovative strategies to make such efforts worthwhile for stakeholders.
What Your Peers Are Reading
Gen X largely consists of families with children, breadwinners approaching prime earning years, and those tasked with caring for aged parents, which positions them as the model candidates for life insurance. Moreover, their current levels of insurance indicate their households will not be able to cover future living expenses if the primary wage earner should die prematurely.
The distinct attributes of Gen X evolved from their particular life experiences. They pioneered computers at school, witnessed an information and Internet revolution before they graduated college, and lived through corporate downsizing and merger mania at very early stages of their careers.
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Collectively, Gen X’s characteristics can shed light on their purchasing behaviors. By paying close attention to the expectations and needs of Gen Xers, insurers may develop better customer experience strategies through tailored marketing, distribution and product offerings.
Marketing: Listen, connect and educate
To attract and retain the brand loyalty of Gen X (measured, in general, as the highest among the generations), insurers and their distributors should employ marketing messages that are personally relevant using the various channels — online and offline — that this demographic frequents. Consider:
• Establishing networks: Setting up highly-engaging online social media communities, as well as an interactive and easy-to-navigate multimedia website that can give insurers a cost-effective platform to engage with tech-savvy Gen Xers and gain deeper consumer insights.
Insurers and their distribution partners can also network through word-of-mouth with an existing client base, especially parents of this generation, as this segment places great value on the opinions of their social and family circle for purchase decisions.
• Leveraging customer-analytics: Deloitte’s “Voice of the Life Insurance Consumer” survey found that significant life events — such as getting married, having children or changing jobs — are potential triggers for life insurance purchase decisions.
As Gen X is in the life stage for each of these catalysts, insurers can build intelligent analytics capable of targeting prospects with a higher conviction and better understanding of the type of products a Gen X customer is more likely to buy at a particular stage in their life.
• Reconsidering product offerings: For Gen X, cost is not only about the price, but also value. Therefore, life insurers should market their products not just for their death benefits, but as a flexible and tax-sheltered savings and investment vehicle that could finance a variety of goals, such as retirement or a child’s college education. Bundling income protection coverage with investment/savings products can also cultivate client ‘stickiness’ among the Gen X segment.