South Central Insurance Agents See Opportunity in Cultural Diversity

By the time the 21st century reaches the half-way mark, more than 50 percent of the population of the United States will be represented by a vast cultural mix of people considered to be “minorities,” and some South Central insurance agents are ahead of the curve in tapping into those cultural groups.

According to the U.S. Census Bureau, minorities, which the Bureau defines as everyone except non-Hispanic, single-race whites, are expected to become the majority in 2042.

Ron Patterson of Ron Patterson Insurance Agency in Richardson, Texas, has been able to diversify his book of business through churches. One of niches Patterson’s agency specializes in is writing insurance for churches, which he said was a gateway for him into African American and Hispanic communities.

“We write a lot of churches,” Patterson said. “That opened the door to black churches. [And] we’ve even got Spanish congregations that we insure that are part of a larger church, an Anglo church. It’s amazing how you can cross racial barriers and lines when you get involved with people that are involved with churches. It’s been a wonderful opportunity for us.”

Brad Berrong with Ed Berrong Insurance Agency in Weatherford, Okla., also sees big potential in ethnic markets. During a presentation at the Independent Insurance Agents of Texas conference last June, Berrong said 15 to 20 percent of the total premium volume of his agency – which is located in Western Oklahoma – comes from the Asian Indian community. The agency also writes a lot of business with Pakistani and Hispanic communities, as well.

“It’s a very big market,” Berrong said. Minority groups own large numbers “of businesses in the United States and that’s going to expand. I think if people are missing embracing the change in ownership that’s occurring in our country, then they’re missing out on a lot of these accounts.”

Understand the Culture

The Hispanic population is the fastest growing minority group in the United States and is expected to triple during the period between 2008 and 2050, according to the Census Bureau. But Hispanics already represent around 80 percent of the population of El Paso, Texas, so it would seem that tapping into the growing amounts of business there would be a natural, whether one is of Hispanic descent or not.

But it still takes a lot of work, according to George Saenz Sr., owner and founder of Cielo Vista Insurance in El Paso. In the commercial side of his agency, which represents 70 percent of his total premium volume, Saenz works with a lot of small businesses and a lot of start ups, which he says are plentiful in El Paso.

While most of his business comes from referrals, Saenz says he does a lot of marketing by way of joining professional organizations such as chambers of commerce, both the regular chamber and the Hispanic chamber. Customers, he said, want to know you’re part of the community. For example, he said, he does a good amount of business with used car dealers, many of whom are Hispanics, so he joined an association of independent car dealers.

“You’ve got to be involved, you’ve got to be there,” he said. Potential customers want to know, “Do you know what you’re talking about? Do you belong to my organization?” Saenz said. “It’s got to be one on one.”

Anyone can come here and tap the market, he said, and while they don’t need to be Hispanic to do so, it does help to speak Spanish. While most people are bilingual, if Spanish is their first language, it’s the one they want to use when it comes to business.

“You have to know the culture,” advised Luis Rico, vice president of Desert West Insurance Agency, which is headquartered in El Paso but also has an office in San Antonio. “It’s one thing to know the product that you are selling and it’s another thing to know who you are going to selling it to.”

He says his agency, which has a specialty in trucking and transportation, does advertise that they speak Spanish. “A lot of folks here in El Paso feel more comfortable with that. They are bilingual but they feel more comfortable speaking with somebody in their own language.”

Sometimes, says William Pierson, assistant vice president of agent development at the Independent Insurance Agents and Brokers of America and a member of the association’s diversity task force, it’s just a matter of being interested. Even if an agent says to a group, “‘I don’t understand your culture, help me understand it.’ That goes a long way,” Pierson said. “You don’t know unless you ask.”

Get Referrals, Do a Great Job

When it comes to expanding an agency’s market share in a particular community, Patterson, Berrong, Saenz, Rico and Pierson all agreed: It’s all about referrals.

Rico’s transportation clients are mostly long-haul truckers and they are “99.9 percent” Hispanic.

“They have trucking companies and they are working at it hard,” he said. When a new client comes to them, it’s almost always the case where they were referred by another client, “people that know us and know we do a good job.”

Patterson, who’s been in the insurance business for nearly 30 years, also says most of his business comes through referrals.

“When you treat people with respect and honor, they honor you with their business,” Patterson said. “They return that and they share with their friends. When they are treated well … it comes back to you tenfold.”

Pierson agreed. “Cultural groups that are outside the mainstream, that maybe don’t speak English that well, are truly going to rely on referrals of people similar to themselves,” he said. “Referral, word of mouth, is the way to do it. It’s that classic thing, if you do something good they’ll tell people.”

Ethnic communities in many ways are closed communities, Berrong explained. “What I mean by that is they’re talking to each other more than they’re speaking to their banker. They talk to each other. [They’re saying] who can I get that will solve my problems, and hopefully that’s where a lot of our referrals come from.”

Pierson warned, however, if you do a bad job, “they will tell even more people.”

Patterson concurred. “People will go where they are invited but they return to places where they are well-treated. And the contrary is the same. If you mistreat somebody – they’re going to tell an awful lot of folks,” he said.

Editor’s Note: This is an edited version of an article, “Changing Demographics Offer a World of Opportunity for Enterprising Agents,” that appeared in the Feb. 23, 2009, edition of Insurance Journal – South Central Region.