July 22, 2021 by David Gambrill
Brokers may have noticed that clients currently looking for help with insurance for lifestyle-type products have fewer grey hairs than those who used to make such purchases.
Working with younger customers, who are starting to represent a larger share of the market, opens up a number of opportunities for brokers to have long-lasting relationships, according to James Reid, product development manager in lifestyle for Aviva Canada.
Traditionally, the average age of clients owning these products was around the mid-50s. These days, brokers are seeing a lot more people in their 30s.
“A lot of these [products] are being purchased by individuals earlier than you might assume,” Reid said. “If you grab them at your door and you get a good relationship with them, and they develop a real passion [for lifestyle products], then you could have a relationship with that customer for 25 years [as] they’re moving into this space.”
The key to the lifestyle product is understanding where your client is in their life. If they’re buying insurance to protect the boat they just bought, then maybe they plan on keeping it at their cottage, for which they also need coverage. Or perhaps they are soon going to accumulate other types of lifestyle products that will need insurance.
“It’s [about] trying to understand the customers who are just buying their first cottage, or just have bought their first boat,” Reid said. “One [opportunity for cross-selling] that we often see is, if someone is buying a 20-foot runabout, then there’s a good chance they have bought their first cottage, and vice versa.”
It’s important to look for those signs that a client may have a new, high-value item to insure. Since it’s not mandatory to have insurance for a boat, it’s not top of mind for a client to call their broker the same way they would if they bought a new car.
“If they buy a car, they’re going to go to the broker to ask, ‘What do I need to do so I don’t get pulled over by the police?’” Reid said. “With vessels, with boats, even though they’re very valuable, there’s not always that association of, ‘I do need my liability coverage and my replacement cost policy in case this boat sinks or it gets damaged at the marina.’”
Collecting cars is also a good indicator that the insured may have other products that may require an insurance policy. For example, if someone is collecting cars, are they also collecting motorcycles?
“There’s a good chance the average person who collects vintage Corvettes has an interest in vintage Harley Davidsons,” Reid said. “There’s definitely a correlation in that type of customer — they like big loud American metal.”
A trending purchase these days is trailers. Last season, as a result of COVID-19, many looked to enjoy a “staycation” in Canada. But even before the pandemic, people were buying trailers as their way to get out of the city. Some are also buying a new ‘toy’ such as Sea-Doo or ATV to take out on the weekend.
Reid’s point is that one purchase usually leads to another. Because these buyers are typically younger nowadays, they may acquire a second lifestyle product in five or 10 years, as they move through different stages of life. So establishing that relationship early on is key for brokers.
“So it’s around understanding and having that solution for them. A broker can actively engage and maximize their own cross-selling opportunities,” Reid said.
Feature photo courtesy of iStock.com/yoh4nn