Panel: Closing $100M life insurance gap reliant on reaching minority groups

NASHVILLE – Many Americans would seemingly prefer to talk about politics and religion before the topic of buying life insurance.

Okay, it's not quite that bad, conceded Alison Salka, principal and consultant at LIMRA and LOMA, but coverage shortfalls and underserved markets continue to bedevil the industry.

"Our research tells us that there are over 100 million U.S. consumers who either don't have insurance or tell us they need more insurance," Salka said. "So again, there's an opportunity to grow the pie there and to close the insurance gap."

Salka moderated a panel discussion on the underserved life insurance market, titled "Empowering Underserved Markets With Emerging Sales Talent" during the 2024 LIMRA 2024 Annual Conference.

The life insurance coverage gap is not new. But the longer the industry fails to serve minority and LGBTQ markets, the bigger that gap is likely to get, Salka said.

"The traditional 1975 selling to a husband, wife and two-point-five children who get married right out of college is just not the reality," she explained. “Population growth is slowing, and it's increasingly driven by immigration, which is going to account for all population growth after 2042.”

Salka covered several underserved markets life insurers should be focused more on:

Women. Repeated surveys show that women are looking for investment advice and guidance, Salka said.

"Whenever we do surveys and you compare males and females talking about what they're worried about, females are more concerned about whatever the topic is," Salka said. "They're more worried about inflation. They're more worried about not having enough for retirement."

Gen Z. This age group of people were born between the late 1990s and early 2000s. They expect transparency and are digitally attuned, which does not mean they know everything about technology, Salka said.

Gen Z relies heavily on social media and related influencers. "Understanding the role that influencers and social media play is critical when you're talking about engaging
with Gen Z," Salka said.

LGBTQ+. Same-sex households have plenty of assets, Salka noted. And "a trigger to buy life insurance is getting married" and now that same-sex marriage is the law, there is "going to be more opportunity there as well," she added.

Americans identifying as LGBTQ+ now represent 7.2% of the population and nearly 20% are also members of Gen Z.

Hispanics. More than 62 million people fall into the Hispanic American demographic, which represents a 23% increase over the past decade. It is a market that tends to have less investable assets, but there remains huge opportunity in Hispanic communities, Salka said.

What are the challenges?

The panel debated the reasons and challenges of selling life insurance in underserved markets such as these:

"They're underserved because we've chosen not to serve them," said Chris Behling, head of risk product sales & underwriting for Northwestern Mutual. "I'm not sure If it's challenging or if it's the fact that our distribution as an industry evolved over time, which means we're just not servicing a market that deserves service. It could be simple as that."

Tom Dempsey, chief distribution officer for Integrity Marketing Group, offered a candid analysis.

"You recruit your own likeness. It doesn't matter whether you're an executive at an insurance carrier or you're someone that's actually trying to go and prospect and build your business," Dempsey said. "You actually recruit your own likeness and say it's unnatural to break out of your comfort zone and talk to someone that maybe isn't didn't grow up the way you did."

The panels agreed that more diversity is needed in the life insurance industry, so that a Vietnamese agent can write life insurance in a Vietnamese community by making those connections.

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