Ethnic Marketing
Life Insurance Strategies with Client -Appeal for Hispanic Business Owners
by Rick Gallego and Maria Sanchez

We would probably hear some Spanish if we could travel into the future of the life insurance market. According to the U.S. Census Bureau, Hispanics account for 14% of the U.S. population, with the number expected to reach almost 25% by 2050. The number of Hispanic-owned companies has grown 82% since 1997, making it one of the fastest growing business segments in the United States. One out of every 10 businesses in the United States is owned by Hispanics, according to the U.S. Hispanic Chamber of Commerce.

California has more than a quarter of the nation’s Hispanic-owned businesses. According to a 2006 update from the California Governor’s office, many of these businesses do not have adequate insurance for their business needs, which presents a tremendous opportunity for California insurance agents.
Any growing business needs a financial safety net for continued growth and stability. Protecting the family business is very important to Hispanic business owners. Agents should consider time-tested business insurance techniques to meet this need. Such concepts could include key person insurance and the use of life insurance to fund buy-sell agreements.

Key person insurance is simply life insurance on the key person in a business. The death of the principal owner or other key employee of a closely held business can create serious financial problems including loss of expertise, loss of business contacts, and loss of credibility with lenders. Key person insurance can provide funds to repay bank loans, train and pay successor executives, and provide continuity for the business in the difficult period following the death of an owner or key manager.

Buy-sell agreements allow shareholders of a closely held corporation to arrange the orderly transfer of ownership if a shareholder becomes disabled or dies. Drafted by an attorney, these agreements permit the surviving shareholders, the corporation, or a combination of both, to purchase the shares of the disabled or deceased co-owner. These agreements help minimize disruptions to the business. Life insurance is an excellent way of funding them.

Marketing to Hispanic Business Owners
Our experience in working this market has led us not to assume that, because the agent speaks Spanish, they are already aware of the cultural nuances and ways to approach this market. Some agents we work with are third-generation Hispanics who don’t have any specific strategies to target this market.  It is important to understand that every demographic includes people with varying personal styles, but several important generalizations are true of most of your potential Hispanic prospects. Hispanic consumers, especially those with limited English proficiency, often buy based on brand recognition, so agents who represent well-known carriers have an advantage. Consider displaying popular brand names or logos prominently when presenting information.

To communicate successfully in this market, an insurance agent or broker will need to use both Spanish and English. However, if you do not speak Spanish, one solution is to partner with an Hispanic agent in order to access this market. Literal translations of English-language marketing materials into Spanish will not have the same effect as more acculturated materials.

For the best results, materials need to speak to the culture with which Hispanics are familiar. Many insurance carriers and insurance wholesalers have access to these materials to help you optimize presentations to your Hispanic prospects.
Agents who work in this market will need to rely on face-to-face contact since Hispanic consumers prefer personalized contact with advisors. This is especially true of immigrants from countries with more personalized business cultures. Since most Hispanics view shopping as a social event, you will often get to know the entire family before the sale is closed. Continued customer support is important as well. A lack of personal contact after the sale could create mistrust and could be interpreted as a lack of caring. Hispanic consumers tend to build business relationships on loyalty and trust.

Toll-free numbers, e-mails, and impersonal direct response mailers are less successful here than in many other market segments. Instead of sending out mass mailings, post your Spanish advertisement at Hispanic-centered churches and community centers. You may also consider getting involved with community organizations and participating in local meetings and events held at community centers and parks. A good way to reach out to the community is to join the local Hispanic Chamber of Commerce or another local Hispanic-based business group.

One important reward for your painstaking relationship-building efforts is that an established customer may be an excellent source of referrals. A majority of Hispanics get information about financial planning services and products from friends and family. Your reputation will be anchored and word of your business will spread throughout the community once you are accepted as a friend of the family and community. Once you receive the stamp of approval, you can expect a much easier time navigating the community and approaching new clients. q
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Rick Gallego is marketing manager for Transamerica Insurance & Investment Group. Maria Sanchez is brokerage director for Innovative Solutions Insurance Services, LLC Transamerica Insurance & Investment Group—a marketing unit for Transamerica Occidental Life Insurance Company (TOLIC) and its affiliatess. It offers an array of innovative financial services and products designed to help individuals, families, and businesses build and protect, and preserve their assets. These products and services are underwritten by TOLIC or its affiliated statutory insurance companies, and include term life insurance, universal life insurance, variable universal life insurance, and fixed annuities. For more information about Transamerica, visit www.transamerica.com. Innovative Solutions Insurance Services LLC is a Los Angeles-based life insurance brokerage general agency serving independent, career, and fraternal sales representatives throughout the United States. For more information about Innovative Solutions Insurance Services, LLC, visit www.isislife.com.