At a time when many financial services companies are looking to ethnic marketing as a way to add and keep loyal customers, Allstate Insurance is reaping the benefit of its own initiative, launched some five years ago.
Allstate's sales have surged to $1.7 billion worth of premiums on auto, homeowners, and life insurance to Hispanics in the last year, up from about $1 billion in 1995, when it began targeting Spanish-speaking people through its agency system.
Now, as more Americans purchase their insurance through banks, the Northbrook, Ill., insurance company is considering whether the bank distribution system would be a worthwhile way to extend the effort.
"Working with a bank would be a great opportunity, especially as the Hispanic community matures relative to financial services," said Raymond Celaya, who heads up Allstate's ethnic marketing.
Though marketing insurance to Hispanics through banks is still in an embryonic stage, banks already own insurance agencies based in Hispanic communities and are marketing aggressively in these places.
That is an important element in any potential partner, said Mr. Celaya. "When we start working with banks, we will need to work with banks that not only have Spanish-speaking employees in the branches but also have enough Hispanics in the area that it serves."
Some other companies have opted for acquisitions rather than alliances in this area. For example Patgo Insurance Agency was bought by Princeton, N.J.-based Summit Bancorp three years ago and now operates as Summit Insurance Advisors' Newark, N.J., office, nestled in the city's Portuguese-speaking enclave. It writes mostly personal property and casualty insurance.
Part of the agency's marketing strategy for the Newark area is to cross-sell banking and insurance products to its Spanish- or Portuguese-speaking clients, said Lisa Galante, a senior vice president for Summit Insurance Advisors of Cranford, N.J. Right now, 90% of Patgo's policies are sold to people of Hispanic or Portuguese heritage, and part of the $7 million of commissions the agency generates comes from commercial insurance sales.
Any bank or insurance company using ethnic marketing gains a competitive edge, said Carmen Effron, president of C.F. Effron, a consulting firm in Westport, Conn. "If you're not working in someone's native language," she said, "and they don't speak English, you could confuse them. It's good sense."
Putting together an ethnic marketing effort begins from within, Mr. Celaya said. "We took a look at how many of our agencies were bilingual - meaning they had at least one person who could speak the language," he said. About five years ago, 850 of Allstate's agencies in the United States had a Spanish-speaking agent. "Now we have Spanish-speaking agents in 2,400," he said. Allstate says it has 13,000 agents.
For now, Allstate's plans on extending the strategy to the bank channel are in the earliest of stages.
"We've had some dialogues regarding working with banks, but that's about all," Mr. Celaya said. "That's still a ways off."
Allstate has recently hired ethnic marketing directors to expand business opportunities in the African-American and Asian communities in the United States.
"We'll try and take some of what we learned in marketing to the Hispanic community and put it to work in these communities as well," Mr. Celaya said. "But there are differences in every community, and it wouldn't make sense to simply take what we did in the Hispanic community and convert that to the other cultures. That wouldn't be smart. We'll take our time."
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