CERTPOINT Systems

The baby boom generation represents both an opportunity and a challenge for the insurance industry because boomers are unquestionably the biggest and most needy pool of insurance customers in the country. More urgent, because of the internet, they're increasingly insurance- savvy.

The post-World War II baby boom generation, born from 1946 to 1964, currently totals nearly 78 million and represents almost 28% of the total U.S. population. And the 34 million baby-boom households account for a whopping 48% of all U.S. families, according to the U.S. Census Bureau and the MetLife Mature Market Institute. For all these… insurance is now an urgent, top-of-mind consideration.

CHANGING PRIORITIES

The presence of children in a household naturally has a major impact on financial priorities. Not surprisingly, near-term concerns - such as mortgage and car payments, tuition, entertainment, family vacations, children's clothing, and the like - tend to preoccupy younger baby boomers. Whereas, older boomers spend substantially less on children's things and considerably more on what might be called "adult toys" (e.g., fine china, silverware, apparel, exotic vacations, and luxury cars).

To be sure, capitalizing on this complex market requires quantum improvements in the education and training of insurance professionals. Agents must continually be current on new products and services, and this can't be done haphazardly. Instead, they must have continual access to the intricacies about new and existing products…but particularly about the brand promise.

BOOMERS AS THE INVESTOR GENERATION

This need for knowledge currency is further intensified by the fact that baby boomers, regardless of age, are not financial neophytes. Instead, they are the most financially astute generation of Americans ever. Boomers today comprise the bulk of what has come to be known as "the investor class" - that is, owners of stocks and bonds acquired directly by, for example, opening an Individual Retirement Account or indirectly through, say, an employee pension plan. Most baby boomers appreciate how to build wealth. But they also have become all too familiar with the vicissitudes of the stock and bond markets. Most of all, they want no more sleepless nights, worrying about where their savings have gone - further requires a level of confidence that can only be engendered through informed agents.

Additionally, with Wall Street's recent boom-bust cycle that baby-boom investors have plenty of underperforming equities on their hands. Many once high-flying stocks can now barely stay airborne. In addition, the likelihood that interest rates will begin to creep up means that bond prices can be expected to fall, lessening the value of fixed-income assets. The combination of these factors affords well-informed insurance professionals the opportunity to market to baby boomers via their financial balance sheets rather than just income streams. Agents who can quickly explain how the transfer of assets into an insurance product could benefit them by improving rates of return or locking in valuations will build confidence and win business.