A fast-growing market of more than 40 million people, representing $600 billion per year of income, cannot be ignored for too long. The financial services insurance industry is finally learning how to embrace people of Spanish heritage within the United States, and use technology to better respond to this underserved segment.Reaching out to this market involves more than simple translation of documents and Web sites. The Hispanic or Latino market is a highly diverse one. While members of this market are not likely to respond to standard industry pitches, it is a receptive audience to insurance products.

"The U.S. Spanish-speaking population is growing at break-neck speed, with no signs of letting up," observes Ron Rogowski, senior analyst for Cambridge, Mass.-based Forrester Research's customer experience practice. "There's a huge market opportunity for financial services," he says. "I continue to see to data that tells me this market continues to grow faster than expected."

The most recent statistics show there were more than 43 million Hispanics living in the United States, or about 15% of the population. Rogowski estimates the Hispanic population has been growing at four times the rate of the population at large. While members of the Hispanic market tend to be younger than the overall average, as "these people have families, and gain more wealth, there's an upside for all industries, upwards of $600 billion worth of spending power," Rogowski observes.

A study sponsored by Telemundo, the Spanish language network, found that between 2002 and 2020, Hispanic household income will grow by an average of 4.8% per year, 0.4% ahead of non-Hispanic income. Total consumer spending by Hispanics was $531 billion last year. This represented $51,208 per household, or 81% of the national average.

Some insurance companies have been actively reaching out to this market. For example, New York Life Insurance Co. has held a number of annual conferences for agents serving the Hispanic market. Nationwide Mutual Insurance Co. has launched a series of television advertisements in various local markets targeting the Hispanic and African-American market. Spanish language TV ads are airing nationally on Spanish language networks, such as Telemundo and Univision, in cities with high Hispanic populations.

A recent study of Hispanic residents in the Los Angeles area, conducted by the Tom·s Rivera Policy Institute (TRPI) of the University of Southern California, and funded by Allstate Insurance, concludes that Spanish Americans remain a largely untapped pool of consumers, and that "the insurance industry is expected to encounter little negative reaction or suspicion from the Latino community as it attempts to penetrate the community's great market potential."

The TRPI study found that a majority of Latinos in the Los Angeles metropolitan area own auto insurance, but do not own homeowners, renters, or life insurance.

This may be a result of insurers not reaching out appropriately to this market. Yet, only 10% of Latino consumers think insurance is an unnecessary expense.

Latino consumers who are older, with higher income or more education are more likely than their counterparts to own auto, life, and home insurance.

Further, with each passing immigrant generation, "Latinos increasingly tend to own insurance," the study says. "It should be noted that, although they do not own life or home insurance, a majority of Latino consumers value insurance. They are receptive toward insurance and express confidence in the insurance industry."

In fact, TRPI found 71% of Latino consumers consider the insurance industry "trustworthy," versus only 6% that think the opposite. There seems to be little significant variation in opinion of the insurance industry by income, education, age, gender, immigrant generation, length of residence, and language preference.

Learning the language

Along with increasingly wealthy households, a large segment of the workforce is Hispanic as well.

According to the U.S. Bureau of Labor Statistics, there are more than 14 million Latino or Hispanic employees in the workforce. This is a fact not lost on Blue Cross and Blue Shield of South Carolina, which has undertaken efforts to meet the needs of Spanish-speaking workers at employer accounts, many of which have divisions or locations in other states.

To address this requirement, the Columbia, S.C.-based health insurer subscribes to the Spanish capabilities offered by Benefitfocus, a provider of employee benefits software and services.

"We have employers who have Spanish-speaking populations," says Michael Griggs, vice president of major group marketing for BCBS of South Carolina.

"A growing percentage of our group accounts have Hispanic populations. On our corporate Web site, we haven't gone fully bilingual, but we have certain forms that a person needs in Spanish. On our telephonic voice recognition unit, a person who speaks Spanish can prompt the system to go to live customer service staff to support them."

The most visible aspect of Spanish language support is corporate Web sites. Forrester's Rogowski observes that in his own survey of Fortune 100 companies, only about 20 had some Spanish language content somewhere on their sites.

He also notes that financial services -without the insurance sector-leads in deployments, but insurance companies can learn from their experiences.

People who are fluent in English as a second language will revert to their mother tongue when it comes to money, he says.

"When it comes to financial arrangements, things can get pretty complex, and that's when you want to have information available in a language you're most comfortable with," says Rogowski.

This language comfort level is key when it comes to understanding terms of agreements and benefits.

"When you talk about investing in something, you don't want to leave anything to chance," says Rogowski.

"I lived in Japan, and spoke Japanese everyday. But when it came to looking at investment opportunities, I wasn't comfortable with Japanese. There's legalese, there's fine print, there's jargon I didn't understand. Jargon is tough enough in your own language," he says. "Put it into a second language, and it becomes more challenging."

That challenge is being addressed by Genworth Financial Inc., which has a comprehensive program to provide not only full translations and interpretations at all levels on its Web site and within documents, but also educational materials about money and insurance.

The Richmond, Va.-based financial services and insurance giant, which provides mortgage insurance and a range of other financial and insurance products, has a working group of Spanish-speaking employees, called the Hispanic Forum, which pours through all documents and presentations to provide appropriate translation and meaning.

"We created a Web-based platform in Spanish to help consumers buy their homes," according to Javier Ismodes, vice president of Latino marketing for Genworth Financial.

The Web site, www.tucasaahora.com or "Your Home Now," offers information in Spanish on the home-buying process. The site also includes the names of mortgage partners that have end-to-end Spanish services.

Spanish preferred

The TRPI study found that almost three-quarters of Latino consumers prefer to receive information about insurance in Spanish or both English and Spanish.

This signifies the importance of the Spanish language as a medium to reach out to the Latino market. Of the foreign-born, 72% of those who have lived in the United States up to 10 years want to receive information about insurance in Spanish, while only 2% prefer English. In contrast, 44% of those who have lived in the United States more than 30 years indicate they prefer Spanish. Twenty-one percent of those long timers prefer English.

However, attaining and entering the market requires a deeper effort than simply posting translated documents.

The TRPI study, for example, finds the focus of sales into the Hispanic market needs to be based on face-to-face interaction, rather than electronic contact.

Latinos refer to family members and relatives (24%) most often as the most reliable and trustworthy source of information about life insurance. When looking for information about life insurance, Latinos also rely most on friends (13%), insurance agents (13%) and television (9%).

"Direct translations can often times be meaningless," says Forrester's Rogowski.

"Literal translations can really lose effect. Especially when you're marketing the benefits of a product. There needs to be a clear message, and the content needs to be reviewed and edited, and checked for messaging. That's a skill that's needed in-house. You need a content reviewer, a native speaker, who reviews translations."

Genworth Financial's Hispanic Forum tries to recreate a concept from English into Spanish, as opposed to translating it directly, says Ismodes.

"You cannot just run an automatic translation and publish it," he says. "If we translate it directly, it may not have the same meaning. There's a lot of homework we do before translating. The Hispanic Forum helps us to make sure the content is relevant, and that we're not offending anyone in any way, that we're communicating our message."

At Blue Cross Blue Shield of South Carolina, Spanish capabilities were introduced within the past two years, first at the call center, followed by the Web site.

"We're using the Benefitfocus self-service tool for eligibility, benefit information, as well as workplace policy manuals-in English and Spanish," says Griggs.

Forrester's Rogowski advises insurance companies to offer bilingual services across all channels, including the Web, e-mail, call centers and agents.

"Firms must realize that a Spanish-language site creates expectations for Spanish-language e-mail and phone service as a part of a larger cross-channel experience," he says.

Providing a dialogue

"For some firms, one of the most valuable services is the dialogue they provide between Spanish-speaking customers and Spanish-speaking call center reps," he adds. "It's important to understand why people are calling your call center. What are they asking in Spanish? Just as you would in English, document that, and find out where there may be a need that you're not serving enough online."

Genworth works with a number of brokers and partners that reach out to the Hispanic market.

"We support them with market materials and presentations," says Ismodes. For partners that don't have a strong Hispanic distribution, Genworth helps them recruit Hispanic agents, and provide assessments and focus groups.

The need to reach out to the underserved Spanish-speaking market is also an opportunity for group-benefit providers and health insurers to step up and offer a service that many employers need, sources say.

"Big employers need help managing a diverse workforce," says Shawn Jenkins, president and CEO of Benefitfocus.com, Mount Pleasant, S.C. "Insurers can provide them with tools and ways to communicate with their employees about benefits."

Joe McKendrick is a business writer based in Doylestown, Pa.

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