Life Insurers Cast the Net Wider for Growth
Enter Gen X
Business as usual is likely no longer a prudent or profitable philosophy in the life insurance and annuity sector. The onslaught of persistently low interest rates, volatile equity markets and a still struggling economy has prompted life insurance and annuity carriers to cast their nets wider, not just to generate growth in a down market, but to side-step intense competition for the more affluent baby boomer segment.
Carriers should now reconsider the scant attention paid to the formerly discounted, underinsured and underpenetrated generation known as Generation X (Gen X). This generation (generally defined as the population born between 1965-1981) largely consists of families with children, breadwinners approaching prime earning years and those tasked with caring for aged parents, which positions them as model candidates for life insurance. According to a 2011 LIMRA study, “Trillion Dollar Baby Growing Up”, Generation Xers state a desire to buy life insurance coverage potentially worth $3.6 trillion over a 12-month period, higher than the other demographic segments (Gen Y and Baby Boomers).
Developing customer-centric targeting strategies for Gen X involve the right marketing message, a combination of integrated channels and new and existing products that meet a need. To attract and retain the brand loyalty of Gen X -- measured as the highest among the generations -- insurers and their distribution partners should develop and effectively spread marketing messages that are personally relevant. Moreover, once the relationship is established, this generation is shown to be a highly loyal customer base, with potential to carry the relationship for the lifetime.
Although Gen X is the smallest generation, comprising only about 21.5 percent (66.3 million) of the U.S. population according to the 2010 U.S. Census, life insurers seeking growth should no longer discount the size of the life insurance sales opportunity this underinsured segment represents.
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