Holding a Mirror to Your Market

We’ve all seen the news from the latest census. It is clear that the demographic makeup of the U.S. population has changed dramatically in the past 20 years, and it is certain that these changes will continue. Operating an insurance agency in our society will require that each of us become increasingly aware of the challenge of this cultural change. Agencies in 2011 will need to consider their own identity and examine how that identity reflects on overall agency operations. They will need to become more aware of their agency’s overall attitudes, perceptions and feelings about diversity and make a firm commitment to better understand the impact of diversity issues on the independent agency system—and more specifically on their agency’s bottom line.

The 2010 Agency Universe Study shows that the independent agency system in the U.S. is lagging behind other businesses in achieving diversity in both agency ownership and employees. Minority ownership and employment in agencies is still measured in single digit percentages, while the population changes noted in the data released in December by the Census Bureau tell a very different story. Since 2000, the face of American suburbs, which is where the independent agency system has long held a strong market share hold, has begun to experience a sea change. According to that report, more than a third of all 13.3 million new suburbanites were Hispanic, compared with 2.5 million blacks and 2 million Asians. In all, whites accounted for a fifth of new suburban growth. In addition, new consumer research reports that in 2011, Latinos will have $560 billion to spend, and that the buying power of the black and Asian-American population will top $825 billion.

Have you done research about the ethnic and cultural diversity in your area to determine where you might be able to provide a unique value proposition? Have you surveyed your carriers to find out what assistance they can offer developing marketing materials? In order to remain competitive and successful, we need to make a conscientious effort to produce marketing materials for our agencies that accurately reflect the way America looks today.

Now is the time for our industry to be proactive in finding and training qualified people of all backgrounds who will be a tremendous asset in reaching out to non-traditional markets. Racial and ethnic minorities and women represent more than 70% of potential new employees entering the workforce. Agencies need to develop strategies to attract, engage and retain women and people of color or they are going to be competing for a shrinking percentage of the available talent. While all buyers of diverse backgrounds will not necessarily expect every agency to be multilingual or a mirror of themselves, it will be important that agencies work to create an environment that is welcoming and respectful of all cultures. And, many businesses today make it a policy to work with other businesses that have a well-defined diversity policy in place. It pays to create a balance of respect and understanding in the workplace. In addition, it is vital that you and your employees are aware of the importance of respecting diversity when dealing with your clients. Consumers of diverse backgrounds may have different priorities in dealing with insurance and their financial security.

As an organization, we need to recruit members of all races, religions and backgrounds. We have made a commitment to increase the diversity at every level of our association, and I am pleased with our initiatives. From the establishment of our Diversity Task Force, which is working with many of our company partners to achieve this goal, to the efforts by our state association to identify and welcome agencies with minority ownership, we are tackling this challenge head on. Ultimately, these diverse perspectives help us make better decisions and understand how the individuals and communities we serve may view our actions.

People from diverse cultures present a tremendous opportunity for agencies to sell more policies and take back some of the market share that is now going to the captive agents who have better positioned themselves to serve these diverse markets. If agencies are willing to develop marketing and workforce strategies to meet the unique needs of these fastest-growing consumer groups in the country, they are likely sitting on a goldmine.

—Mike Miley, Big “I” chairman