Mutual Trust & Respect Key to the Latino Insurance Market

In the mainstream population, decisions about which insurance provider or broker to do business with may be influenced by television, radio or the yellow pages phone directory.

In the Latino community, people are more likely to turn to friends, relatives or neighbors for advice when making such a choice. Latinos are also more likely to seek out a local broker who speaks Spanish and who understands their needs and concerns.

These and other differences, some obvious and some subtle, help to define the Latino insurance market in California. Understanding those differences and what they mean to your marketing efforts is essential to success in this rapidly growing demographic segment.

There is an old stereotype that many Latinos don’t take insurance seriously. However, a recent study tells a very different story, that most Latinos understand the value and importance of insurance. According to a study conducted among Los Angeles-area Latinos by the Tomás Rivera Policy Institute, two-thirds of respondents consider insurance to be important protection against unexpected expenses and/or a tool to protect and grow wealth. Only 10 percent thought insurance is an “unnecessary expense.”

Attitudes toward insurance are affected by immigration generation, i.e. foreign-born versus native-born, and length of residence in the United States. The older, more educated and higher income they are, the more likely Latinos are to be insured, according to the TRPI study results.

Another revelation of the study is that a majority of respondents prefer to get their information about insurance in Spanish, or in both Spanish and English. Also, local insurance brokers were rated by respondents as among the most reliable and trustworthy sources of insurance information.

A Southern California in-surance brokerage based in Van Nuys has positioned itself perfectly to deal with those dynamics. Alfaro & Alfaro Risk Man-agement, operated by brothers Carlos and Jose Alfaro, focuses most of its marketing efforts on the San Fernando Valley’s rapidly increasing Latino population.

“We believe that the Latino market provides great opportunities for growth for our insurance brokerage and for our strategic insurance company providers,” Carlos Alfaro said.

The Alfaros believe that being visible in the community and building trust and rapport with current and prospective clients is the key to success when marketing to Latinos.

“Latinos tend to be leery about who they do business with,” Carlos Alfaro stated. “They want to know the character and the trustworthiness of the businesses they deal with. If you can’t put a human face on your company, if you can’t demonstrate that you truly care about the well-being of your clients, you will not succeed.”

To meet this challenge, the company conducts workshops in which people learn the benefits of business and family insurance coverage. The firm employs a consultative strategy in its client relations, rather than a “just-sign-here” approach. Sales personnel take time to explain the complexities of insurance policies and to answer the client’s questions, in Spanish if that’s what they prefer.

To increase visibility in the community, Carlos and Jose invest significant amounts of time serving on the boards of local business and community groups. They help sponsor local events that promote financial literacy for individuals and better business methods for entrepreneurs.

The Alfaros also believe that much of their success has resulted from partnering with insurance companies that are willing to adapt to the needs and desires of the Latino community. Examples are companies that offer convenient payment plans, provide customer service in Spanish and accept country-of-origin drivers licenses to legally purchase auto insurance.

Cindy Vasquez, agency field executive for State Farm, agreed. “Our success in the Latino community is built on a foundation of shared values-quality service and relationships, mutual trust, integrity and State Farm’s financial strength,” she said.

State Farm agents who work in the Latino community spend a significant amount of their time tailoring insurance products to the needs and budgets of the Latino community. The company carries out its well-known “good neighbor” slogan (Un Buen Vecíno) by supporting community-based organizations such as advocacy groups, chambers of commerce, youth development organizations and others that address the needs of the Latino community.

While most Latinos speak and understand English, many of those who have recently immigrated to the United States prefer to get information and conduct business in Spanish. So, brokerages that don’t have Spanish speakers and who serve areas with significant Latino populations are busy recruiting bilingual staff.

For the same reason, State Farm and other providers have added a link to Spanish versions of their Web sites, where Spanish-speaking Latinos can get the information they need. The banner, “hablamos español” (we speak Spanish) is becoming increasingly common in advertising and on the doors of insurance brokerages.

While Latinos place high importance on getting insurance at the lowest possible price, they also rate other features as equally important. They value a provider that has a reputation for strong customer service. They may base their choice on the perceived financial stability and history of the company. Feeling comfortable with the person they deal with is also very important.

The majority of U.S. Latinos are renters rather than homeowners, but that is changing. As the criteria for mortgage eligibility have become more liberal, people who just a decade ago would not have qualified for a home loan are now in a position to buy their first home. Thus, the market for homeowners insurance among Latinos is set to expand significantly.

And therein lies a recurring theme in the larger picture of Latinos as consumers. It’s not about the past, it’s about the future. Latinos are a population in motion. Those who emigrate to the United States from Latin America begin to move across the acculturation continuum the minute they arrive. They younger they are, the more educated they are. And the more affluent they become, the faster they assimilate.

Savvy marketers in every category in the U.S. product spectrum have figured this out and they are discarding old stereotypes. Latinos don’t use the Internet? That’s obsolete information. Latinos only work at menial, low-paying jobs? Not true. Latinos are in America only temporarily, dreaming of the day when they can return to their country of origin? Nonsense.

Once you get beyond the stereotypes, you can start to focus on ways to engage the Latino population in becoming stronger in-surance customers and more receptive to the industry’s products and services.

But, it all starts with having the right approach.

Doing business with Latinos first requires that you earn their trust and respect. The best way to do that is demonstrate that you are interested in more than just gaining a new customer.

Show them that you can help them attain their financial and lifestyle goals and that you are willing to serve as a trusted and reliable advisor. Show them that their wellbeing is as important to you as their business. When you have done that, the rest will fall into place.

Ray Durazo is president of Durazo Communications, a Los Angeles-based advertising, public relations and marketing firm that specializes in the U.S. Hispanic market.

Topics Trends USA Agencies Market