Feeding new prospects into the pipeline is the lifeblood for producers. But where does new growth come from? That is the age-old question agents face. One answer is by cultivating multicultural markets.
According to Census Bureau projections, a demographic shift in the U.S. is well underway, (Figure 1) and by 2050, multicultural consumers will hit majority status. The demographic shift is already in effect in many states, including California and Texas, where a “majority minority,” meaning white non-Hispanics, make up less than 50 percent of the population. With those figures in mind, it’s in the producer’s best interest to grow a multicultural client base.
Who are the multicultural markets, how are agents reaching them and what support are producers receiving from the industry are just some of the key question raised in the 2013 Multicultural Markets Study. [Note: For the purposes of the study, the research considered four distinct multicultural markets: African American, Hispanic, Asian and LGBT.]
This National Underwriter Research, conducted by the National Underwriter research team, reveals an insurance population out of balance with the general population, and an agent force unsure of how to reach multicultural prospects.
But the news is not all doom and gloom. Respondents say they have noticed a significant uptick in the industry’s efforts to reach diverse markets in the past 10 years. While statistics have yet to show a deeper penetration into these markets, it lays an initial foundation that will require a more concentrated effort by individual agents, as well as the industry, to better understand multicultural markets through education and to reach them through client-specific marketing material.
With those tools in hand, the more important aspect will be to make those initial sales to diverse clients. As agents understand, sales beget sales. By entering new markets and gaining new, diverse clients through trust and the building of relationships, producers set themselves up for long-term growth and a new prospect stream.
The question of population
A common theme regarding the insurance industry is that it is one dominated by white males, specifically white males in executive positions or as producers. But are agents disproportionately white relative to the population at large?
When asked about their racial and ethnic background, approximately 14 percent chose not to answer the question at all. But of those respondents who did provide an answer, 85 percent self-identified as white, 6 percent as African American, 6 percent as Hispanic, 3 percent as Asian and 1 percent as LGBT. So, how do these numbers compare to the general population?