Marketing insurance products to consumers under age 30 tends to be overlooked by brokers and insurance companies alike. Experts say brokers are missing out on a crucial market segment, one that could determine their success or failure in the future.
A recent research paper, Targeting Generation X- Preparing for Tomorrow…Today, published by the National Young Agents Committee of the Independent Insurance Agents & Brokers of America (IIABA), found that generation X represents the best growth opportunity for the agency system.
The paper stresses that to successfully address the needs of an age group, sales representatives must understand the perceptions and attitudes of that generation, and how this will affect its decisions.
Most insurers generally target older generation Xers, aged between 35 and 38. The perception is that those aged 20 to 30 do not have a need for life insurance, and therefore are not interested in buying.
“They would rather buy a beer,” says Guy Giannini, Vice-President of TD Life. “If you’re single and young, you’re invincible and in your own mind death is long away,” he notes.
Mr. Giannini highlights that TD has made previous efforts to target a more youthful market by including people as young as 18 in its telemarketing and direct campaigns. The problem is that the senior and youth markets do not respond as well as the middle aged to these campaigns, says Mr. Giannini.
“As a marketer of insurance I have always wanted to see what I could do to appeal to younger people, but in the end we always run into the same results: the need can be explained but the emotion is not there,” stresses Mr. Giannini. He adds that he has also tried marketing to youth during his career at Canada Trust and CIBC.
“We don’t exclude younger people from the majority of our messaging but we don’t expect to get the majority of our business from them,” he notes.
Another reason brokers may not be drawn to the youth segment is that the commission is lower and the amount of coverage will be less.
RBC Insurance does not have products targeted specifically to youth, but its products still serve that market, says Kathryn Giffen, President of RBC Life. She explains that RBC markets to more of a lifestyle than an age group. Most products are geared to people getting married, or buying a house, which she says can also include people from 20 to 25.
Despite it all, some are daring to enter a market overlooked by others. A strong believer of the cradle-to-grave marketing technique is Robin Ingle, Chairman of Ingle Insurance and Imagine Financial. He sees the youth market as creating a foundation. He predicts that once graduate and start their career they will recognize the Ingle name and will remain loyal to the company. “We want to be able to provide individual insurance coverage throughout their lifetime,” he says.
To target the youth audience, Mr. Ingle has collaborated with a student price-card plan, which will reach about 800,000 students. With the card, students will be able to buy insurance products at a preferred rate. As well, Mr. Ingle is talking to student councils in colleges and universities who will then inform the student body of insurance products available.
Michael Chan, owner of the managing general agency (MGA) ELMBA Insurance Group Inc., says he targeted younger clients when he first started out as an insurance broker and was quite successful doing so. Brokers should target all age groups and not avoid the young, Mr. Chan says. People aged 16 to 25 still need insurance, but must also be educated about the importance of planning for their future.
A useful tactic when presenting to younger prospects, says Mr. Chan, is to stress that insurance is cheaper when purchased at a young age, and that buyers will always be judged on their health status from the age they purchased it. Mr. Chan also suggests targeting students who are studying a higher profession such as accounting or medicine. He says that these students should be persuaded to insure their ability.
Another targeting the younger crowds is Daniel La Tour, Insurance Advisor and Broker for JustinCaseInsurance.com, a Montreal-based firm. Mr. La Tour explains that he has become actively involved in the community and with youth groups to offers his services to participants.
This past May he helped to organize Quebec’s national feast day celebration in his neighbourhood. He rounded up various young artists between 16 and 20, and by working closely with them managed to also expand his client base.
“We all have needs for insurance…I am looking to introduce services to the market of younger people, because many of the participants may not have a broker,” he says.
In Alberta, Shannon Sabey Insurance offers a financial day camp for young adults. Cathy Ward explains the camp, called Moe Money Ventures, is designed to teach children the basics in financial planning. Ms. Ward says that more than 200 children have participated in the camp, learning about everything from insurance to mutual funds. Moe Money Ventures takes place six times a year.
“Sometimes you need to plant the seed for the flower to grow,” says Ms. Ward. She adds that many parents have also become clients after their children have participated in the camp.