Chanell Alexander is a writer for TechnologyAdvice. She is a freelance writer and digital marketing strategist. She has over seven years of experience in the nonprofit field, and enjoys blending innovative technology solutions with communications. When she is not writing, Chanell enjoys traveling, contributing to video game blogs, and embracing her inner foodie. See what else Chanell has been up to on her LinkedIn profile and Twitter page.
Today's Aging Workforce
The 2008 recession changed everything. Not only did it send America into an economic frenzy, but it also disrupted the traditional trajectory of America’s aging population. In 1990, the average retirement age was 57; now it has increased to an average of 62. Many baby boomers are attempting to regain the retirement savings they likely lost ten years ago, which is causing a significant portion of the population to stay at their jobs a lot longer than previous groups. Even though millennials are now the largest generation in the workforce, baby boomers are not too far behind. This creates a unique challenge for small and mid-sized insurance companies who want to sell to aging workers. How does their presence in the workforce change the messaging, approach, or logistics of selling insurance? Here are five factors small and mid-sized insurance companies should pay attention to concerning America’s aging workforce.
Acknowledging the Risk
Older generations are not going anywhere soon. In fact, their numbers in the workforce are expected to increase 2% annually. While their exemplary experience and contributions to all industries cannot be denied, on average, older workers are feared to cost more than their younger counterparts. As aging sets in, it is normal for health risks to increase. As a result, employers have to think about the rising cost of healthcare, disability insurance, life insurance, and rising salaries.
Small and mid-sized insurance companies have to make an effort to acknowledge these concerns and discuss as many affordable options as possible with companies and individuals. It might be helpful for insurance companies to suggest employers do a risk assessment study to see how many workers they employ are over the age of 55, what the current cost to serve their insurance needs are, and what holistic or wellness programs the company has in place to mitigate the risk. Helping companies and even individuals have this conversation can jumpstart the discussion about coverage so both parties understand the cost involved.
Keep Their Financial Needs in Mind
Many individuals of this generation are trying to regain assets and retirement savings they lost during the recession. In 2008, employees on average lost 14% of their retirement savings — or $10,000. Older generations who are still in the workforce have their eyes on affordability as they prepare for the next phase of their life. Some workers are even having to choose between saving for the future or purchasing health insurance today.
Last year, The Schwartz Center for Economic Policy Analysis found that one in four workers between the ages of 55 and 64 were uninsured at their current jobs. The 24% who are uninsured are made up of three groups: those who purchase private insurance with high premiums, those who qualify for Medicaid, and those who make too much to receive Medicaid but make too little to buy private insurance. Another report indicated 15% of college-educated older workers are employed in low-paying jobs, while the group as a whole has seen their median real weekly earnings drop $883. Understandably, older workers are most interested in affordability, and being able to seek insurance while saving for retirement.
Speaking Their Language
Many industries have placed their marketing focus on millennials. They are the coveted demographic that every company wants to grab, but it would be unwise to leave out baby boomers. On average, this group outspends other generations by $400 billion, and they control three-fourths of America’s wealth. There is an incentive for small and mid-sized insurance companies to focus in on this group, but the messaging has to be consistent with what they are looking for.
Unlike millennials, baby boomers have no problems with direct mail campaigns, brochures with large amounts of copy, and long phone calls that thoroughly explain benefit packages and features. This group looks at purchases like a commitment, and this could not be truer than with insurance. If insurance companies are also working with employers, providing detailed literature, in-person and phone-based office hours, and workshops are not a bad idea. Older generations want to genuinely understand what they are committing to, and they seek to build rapport with companies. Conversion will likely take longer with this group, but once trust is gained it will be easier to solidify a sale. Small and mid-sized insurance companies should instruct customer service reps to be prepared to answer questions in detail and prioritize follow-up calls.
Online Interactions are Just as Important as They Ever Were
Again, this is a factor that has been attributed to younger generations. However, to truly be successful with older generations, small and mid-sized insurance companies have to ensure they have a robust online presence. This step needs to happen in addition to the brochure and paper-based literature. Contrary to popular belief, this group spends a lot of time online. On average, baby boomers spend 27 hours a week online — two hours more than their Gen X counterparts. Seventy-two percent of this group shops online and 27.4 million engage in social networking.
The internet is shaping up to be one of the primary places this group is receiving most of their information about products they are interested in. Small and mid-sized insurance business leaders should make sure their websites are easy-to-navigate, descriptive, and provide a clear way for these individuals to communicate with representatives — this could include lead forms or chat features. Make sure that your company’s customer relationship management (CRM) software tracks customer interactions with your website and with your reps, so you can send customers the right educational and sales literature.
Hire Professionals Who Have Experience with This Group
As generations age, they have needs, concerns, and personality traits that professionals need to be aware of when interacting with them. Companies within the insurance industry have to ensure they are staffed with professionals who have experience working with this group and understand how to walk them — and companies who staff them— through the sales funnel. Again, it may take a little longer to answer the questions of a baby boomer or walk them through the technical aspects of an insurance portal. Insurance professionals have to be patient, responsive, and personable in their approach.
Older generations like to have a connection with who they are speaking with, and are willing to take the extra time to learn more. Small and mid-sized companies can use this to their advantage by hiring staff who can ace this marketing style. A deep understanding of their financial, familial, and health needs will go a long way for small and mid-sized companies to set themselves apart.
Again, this group is not going away from the workforce anytime soon. Like younger generations, baby boomers have a specific set of needs that insurance companies have to be aware of when attempting to sell to them or the companies that employ them. Balancing affordability with an online presence and robust follow-up strategy will be key to performing well with older generations.
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