Ethnic Marketing
Life Insurance and the Asian Client: It’s Time to Seize the Opportunity
by X. Rick Niu, CLU

Recent economic news has rarely been quite so bleak -- marked by continuing stock market turbulence, a deepening credit crisis, and sluggish consumer spending. Yet, such uncertain times provide opportunities for products and services that offer security. With its tax advantages and cash options for value accumulation, life insurance can gain a new shine when dark clouds hover over more speculative financial products.

Of course, life insurance sales are not immune to economic forces. The average American may not have ready resources to purchase a life policy because of high credit balances and low savings rates. However despite the latest economic news, many Asian Americans are in a position to consider the benefits of a financial product. First and foremost, Asian Americans share an attribute that contrasts sharply with the average U.S. consumer: they save a lot, inheriting the much-valued tradition from Asian countries known for usually high rates of personal savings.

As important as this high savings rate is, we must understand that it is being applied to higher-than-average incomes as well. In 2005, the median household income for Asians was $51,045, according to the CAG/ISA Asian American Market Report. This compares to $45,367 for the median white household. The same report illuminates another extraordinary statistic: Spending power among Asian Americans rose 397%, between 1990 and 2004 -- more than double the increase of the total population (177%).

Translating Knowledge into Sales

You can draw on the expertise of insurance carriers to enhance your capabilities in the Asian American market. Carriers have begun talking about building on their U.S.-based capabilities to attract the multicultural markets. In other cases, global carriers with significant experience in local markets abroad are using their home-country knowledge for multicultural offerings in the U.S. In either case, it is helpful to consider these questions as you evaluate carriers:

1. How committed is the carrier to the Asian American market?

Many carriers translate brochures, marketing kits, and even some Web content into Chinese and perhaps other Asian languages. But it is not always done in a way that can lead to engagement rather than alienation. The quality of these materials varies greatly because doing a correct translation requires a deep understanding of the culture, not just the words. Asians can immediately detect Asianized-marketing materials that miss the subtleties.

Such marketing missteps are the result of lack of true commitment to the Asian market. Like the fast food restaurant that serves an Asian salad, these carriers may not truly invest in understanding the needs of Asian consumers. Deeper commitment shows in the number of personnel who are part of the carrier’s leadership team and their level of authority. This means not only having Asian employees in service positions, but also having them in management, sales, and other positions. This depth helps to ensure that strategies and tactics are in tune with the market -- from decisions to marketing messages.

2. Does the carrier have credibility among those who advise Asians?

As with any affluent consumer, increasing assets are usually accompanied by an increase in advisors including tax preparers, attorneys, CPAs, private bankers, and others. These trusted advisors are a crucial marketing target for insurance brokers because of their influence over their clients’ purchasing choices and for their own purchases since they are likely to be affluent themselves. The carrier must be credible since advisors may be attracted to recognized brands that offer sophisticated product options. As we’ve already discussed, they are unlikely to buy products with unsophisticated marketing messages aimed at the Asian community and they are unlikely to persuade others to consider these products.

3. Is the carrier’s brand known on both sides of the Pacific?

Just as Asian Americans are strongly influenced by the advisors, they put significant weight on the opinions of family members and friends. The power of a brand in China, India, Japan, Korea, Taiwan, or other Asian countries and jurisdictions has immediate influence on how well that brand is accepted among Asians in the U.S. markets. Asian Americans are attuned to the brands they or their relatives have experienced overseas. They are likely to have a positive response to companies that are committed to serving family and friends in their native countries.

4. Can the carrier help you expand your business nationally?

It’s reasonable for brokers in California to focus on the Asian market in their state alone. After all, Asians comprise 32% of San Francisco’s population, 16% of Orange County’s population, and 13% of Los Angeles’s population, according to the 2006 U.S. Census. But there are many other significant Asian American communities around the country. These communities are often served by small Asian agencies that need assistance in marketing activities and support. California wholesalers have an excellent opportunity to tap into a national market. The wholesaler can forge alliances with Asian agencies by demonstrating a deep commitment to the Asian market and a deep understanding. The wholesaler can provide the right products, marketing, training, underwriting, and systems support in cooperation with an Asian-knowledgeable carrier.

5. Can the carrier help you create lasting bonds with Asian agencies?

Independent agencies that focus on multicultural markets have a reputation for being, well, highly independent. But the traditional independent distribution model does not perform well in multicultural markets because too few carriers truly understand how to grow and support these markets. Independent insurance professionals serving the Asian community are likely to be better off by forming stronger alliances with an insurance carrier and sometimes a distribution partner that truly understands their market needs. How can the carrier help solidify these relationships? In addition to providing the cultural marketing support, the carrier must allow agents to tailor solutions to their business model and to their clients – not something off the standardized menu.

In a nutshell, a distribution firm’s decision to pursue the Asian American market must be accompanied by a serious commitment. Half-sincere attempts to engage this market will deliver zero results. It is crucial to work with a carrier that can provide in-depth knowledge of the Asian American consumer, a credible brand, and the products and services to meet their needs and the needs of the agencies that serve them.
The Asian market awaits your serious attention. Even in these tough economic times, they are ready to invest in the value you provide.
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X. Rick Niu is executive vice president and chief growth officer for the US Insurance Group of ING. ING is a global financial institution with clients in more than 50 countries. In the U.S., ING offers its array of financial services and products through the ING family of companies. You can reach Rick by email at rick.niu@us.ing.com.