Boomers: Golden Years, Golden Opportunity
July 21, 2015| Von Jay Curran |
L/H General Industry
Almost every day we hear more information on the significance of any given segment of our population. Blogs, news articles and new research are all coming out fast and furious on the baby boomers and millennials, offering the latest insights on consumer purchasing behaviors, strategies for personal and retirement savings, and technology use - to name a few. However, what does this research tell us that can help us better understand one of the insurance industry’s most significant customer segments - the boomers - and how we may better meet their unique needs as they navigate their Golden Years?
The boomer market represents a vast segment of buyers - from those currently retired to those still actively at work. Since I am a boomer, I will share my first-hand perspective and discuss generational demographics in the U.S., examining boomers' general characteristics and mindset, as well as their attitudes toward work, finances and retirement, and how this might impact the benefits landscape. I will also explore what lies ahead for today’s boomers.
Given that the baby boomer generation represents 25% of the U.S. population, this is not a new market segment for insurance carriers, but rather a customer cohort they have known for some time.1 In many cases an individual represents a long-term customer. No matter how well we think we know these customers, they are posing new challenges to insurers that may require adjustments to strategies for attracting and retaining them as customers, as well as for meeting their unique needs when it comes to later life stage insurance products.
Who Are the Boomers?
This significant generational segment of people, born between 1946 and 1964, (76.3 million in the U.S. alone), has been shaping the economic landscape of the United States for some time and is projected to continue do so for the next 20 years.2 Considering that over 10,000 U.S. boomers will be retiring daily over the next 15 years - a staggering figure for sure - the financial implications of a boomer's decision to retire or delay retirement will have a direct impact on the workforce and the employee benefits market (not just 401ks).3
What Motivates Boomers?
The mindset of the baby boomer generation may not be all that surprising. Boomers are inclined to protect freedom and individual rights. We value working hard and owning our possessions. We’re goal-oriented, view education as a birthright, and enjoy focusing on our families. Boomers also have a strong sense of self: We are focused on being physically fit, seeking career opportunities, being involved in group activities, learning and exploring new experiences.4
Most boomers prefer face-to-face communication - something insurers should keep in mind when making contact with them. According to Gen Re’s recent research on the role agents play in the purchase of Medicare Supplement products, among those that met with a professional, over 65% had a one-on-one meeting. In recent Gen Re research on Insurance Exchanges and Older Consumers, the findings confirmed that older consumers still want to speak with a live person at some point in the process in order to validate their decisions.
Clearly, opportunity exists for insurance carriers to service boomers and engage them with products that will assist in achieving or in some cases softening the financial impact of retirement. I am not suggesting a magic bullet but rather traditional insurance products that are needs-based and fit within a prospective customer's budget.
In Part Two of this series I will discuss how some baby boomers are running out of time to save for retirement and how a limited budget could impact the sale of insurance products to this segment of the market. I will also talk about the role of the agent; the boomer segment of the population likes the engagement of a face-to-face meeting, yet the number of agents continues to decline.
1. U.S. Census Bureau, The Baby Boom Cohort in the United States: 2012 to 2060, 2014.
3. BoomAgers, The Boomers Are Back in ‘First Place’, 2014; Pew Research Center, Baby Boomers Retire, 2010.
4. How Stuff Works, 10 Popular Baby Boomer Activities, 2010; Education Portal, What Are Baby Boomers? – Definition, Age & Characteristics, 2014; Baby Boomers, The Baby Boomer Generation [Born 1946 – 1964]; Alliance Staff, Baby Boomers, Gen X and Generation Y (Millennials), 2014; Baby Boomers, 2009.