Retirement Market Boom
In the Beatles song "When I'm Sixty-Four," Paul McCartney asks, "Doing the garden, digging the weeds/Who could ask for more?" The answer in 2006 is, "Just about everybody!" And that's something insurance companies that want to get a piece of the baby boomer market need to bear in mind.
On the first day of this year, the oldest members of the more than 75-million-strong baby boomer generation -- which customarily includes those born between 1946 and 1964 -- turned 60, and financial services companies seeking to take advantage of boomers' retirement needs were watching. Boston-based Fidelity Investments (more than $10 billion in annual revenue), a company all too conscious of its shrinking market share, even adopted Sir Paul to pitch its products and services in an ad that urges its target audience to "never stop doing what you love." McCartney -- who, incidentally, turns 64 this year -- serves as an icon to a generation that likely will live longer than any preceding cohort and is unlikely to spend that time knitting sweaters by the fireside, as the song goes.
Earlier generations tended to retire definitively and drop off the map as consumers, making them a difficult target market to reach. Boomers, by contrast, can be counted on to continue to work, purchase and accumulate debt (and wealth) until much later in life, according to Bob Fullington, EVP and CIO for Jacksonville, Fla.-based Life of the South (LOTS; $300 million in annual net premium) and president of LOTS Solutions, which markets, manufactures and administers "financial accessory" products, such as debt protection and identity theft insurance, that complement financial institutions' core products.
"We find that the products and services we are offering to middle-aged people are fitting the baby boomers quite well," Fullington says. "Many have second homes and mortgages, so they are carrying a fair amount of debt and want to make sure that it's protected."
Not only are boomers' needs more favorable to insurers than those of previous retirees, Fullington observes, but as a group, they are easier to pitch. "In the past, you only had two ways to reach retirees -- direct mail or phone," he says. Now, electronic channels are a viable vehicle. "Baby boomers are much more sophisticated with regard to technology and much more in the flow of younger-aged people. Boomers invented a lot of the online stuff and have continued to learn throughout their lives."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio
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