LA Latinos Un-tapped Insurance Market.

While most believe insurance is important to protect assets and, in the case of life insurance, their families, Los Angeles-area Latino consumers in general under-utilize insurance, according to a study released by the Tomás Rivera Policy Institute (TRPI) at the University of Southern California.

The study, made possible by a grant from Allstate Insurance Company, used focus groups and a telephone survey to assess Los Angeles-area Latino resident’s attitudes toward three types of insurance: auto, property (homeowners and renters) and life. The study also examined how these consumers make decisions about insurance purchases and gather information about insurance. Among the key findings:

• Los Angeles-area Latinos value insurance. Two thirds of respondents consider insurance to be important protection against unexpected expenses and/or a tool to protect and grow wealth. Just ten percent of respondents thought insurance is an “unnecessary expense.”

• Los Angeles-area Latino consumers generally under-utilize insurance. While respondents reported owning property insurance in proportion to Latino home ownership rates in the LA area (47%), and while three-quarters of respondents report owning auto insurance, more than sixty percent do not own any form of life insurance.

• Personal contact is the preferred means of gathering information about insurance for Los Angeles-area Latino consumers. The most often cited information source among respondents is “friends and family.”

Interestingly, insurance agents are also cited as one of the most reliable and trustworthy sources of information – good news for companies that sell their products through agencies; bad news for so-called “direct” companies that use only telephone or Internet sales.

• As is the case for most consumers, price is the dominant factor influencing insurance purchasing decisions of Los Angeles-area Latino consumers, although the quality of customer service increases in importance with older and higher income respondents. • As much as age, education level or income, the perceptions of respondents about insurance are affected by immigrant generation (i.e. foreign-born versus native- born) and length of residence in the United States.

• A majority of Los Angeles-area Latino consumers prefer to get information about insurance in Spanish or Spanish and English. However, this preference declines dramatically with acculturation; eightyeight percent of third generation respondents preferred receiving information in English.

“In many ways, this study shows that Latino consumers in the Los Angeles area are a lot like most consumers when it comes to insurance: price is their top concern; the older, more educated and higher income they are, the more likely they are to be insured; and the majority are not as well insured as they should be,” said Dr. Harry Pachon, President of the Tomás Rivera Policy Institute. “However, the findings point to a unique growth market opportunity among the Los Angeles Latino community for insurance companies with competitively priced products, a commitment to high quality customer services, and a presence in the community with respected agents or brokers.”

To view full report CLICK below (Adobe Acrobat Reader required):

http://www.trpi.org/PDFs/insure.pdf