Robert A. Kerzner, CLU, ChFC, president and CEO of LIMRA, LOMA and LL Global, opened his speech at the LIMRA Annual Conference with a question that advisors have been asking since joining the industry: “How do we win the hearts and minds of today’s consumers?”
On paper, it might seem like a simple question, but due to shifting demographics and consumer buying patterns, there’s no simple answere. Kerzner said, “while the industry does a good job providing security for families, things are different today. For starters, the definitions of family and American household are very different than in the past.”
According to U.S. Census Bureau data, the traditional household — a married couple with children —represented 40 percent of all households in 1970 and now stands at only 20 percent. Single parent households have more than doubled since 1970 and only 51 percent of people are getting married compared to 72 percent in 1960. Those who marry do so later. In 1960, half of all U.S. households had children. By 2010 the number was down to 1 in 5 households.
In addition, shifts in ethnic demographics are happening and will continue into the future. The U.S. Hispanic population is expected to grow 125 percent by 2060, and the Asian population will more than double by 2060.
“In the midst of all this change, Gen Y consumers are coming of age and represent a huge opportunity for insurers.” A LIMRA generational study found that 53 percent of Gen Y consumers said they planned to buy life insurance within the next year.
The challenge, according to Kerzner, is how to engage them.”The toughest competition for insurance companies is not within the industry but from outside the industry. With Amazon, Apple and various social media platforms all furiously competing for consumer attention, it’s no wonder consumers are distracted and hard to reach.”
Kerzner presented examples of how other industries are breaking through the clutter in innovative ways to engage today’s consumers. One popular technique he referenced is gamification, the use of game elements and design in a non-game context. For example, Ford has an online game where consumers compete to design the best virtual Mustang. Charles Schwab offers the “It’s Your Life Game” to help people see how financial decisions, both large and small, can affect their future.
For more straight talk from Robert Kerzner, watch his full presentation Connecting to Today’s Consumers Requires Innovation and New Approaches.