Experts: Multiculture Marketing Tips

By Jim Connolly

NU Online News Service, March 30, 11:55 a.m. EST, NewYork?In marketing to racial and ethnic groups, it isnecessary to have a compliance program in place that not only meetscommercial objectives but also balances different parts of theselling process, according to marketing experts.[@@]

Coordination of marketing efforts should take into account threeimportant factors: solicitation and choosing which groups totarget; selection or underwriting; and service, said AndrewNuttney, a partner with the Research and Advisory Group, New York.The remarks were made during a seminar on multicultural marketingfor insurance and financial services here, sponsored by the Centerfor Business Intelligence Research, Woburn, Mass.

A compliance officer, Mr. Nuttney said, needs to have a say inall marketing, not just the specific ethnic or racial market; fieldrecruiting; and contact with underwriting and claimsmanagement.

He continued that compliance programs that balance risks willbecome more important with the greater possibility of fundamentallong-term changes such as a federal regulatory or a self-regulatoryframework.

Bruce Foudree, of counsel with the law firm of Lord, Bissell& Brook in Chicago, said companies need to get into a patternof documenting what they do in the area of compliance.

Mr. Foudree noted that in areas where there is federal oversightsuch as homeowners insurance in relation to fair housingrequirements, issues such as what percentage of marketing dollarswere spent on ethnic and racial segments could be called intoquestion.

He continued that if the fairness of such allocations arequestioned, federal regulators will allow the courts to decide theanswers.

Mr. Foudree noted that companies have to also comply with staterequirements governing marketing. These requirements are makinginsurers careful when taking steps such as offering insurancecontracts that are written in Spanish, he added. A policy writtenin Spanish, for example, should be clearly understandable, saidBrian Atchinson, executive director of the Insurance MarketplaceStandards Association, Washington.

Mr. Foudree continued that department staff at the state levelshould be able to read and approve such contracts, as well.

During the discussion, it was noted that some marketingbrochures written in foreign language specify "For Reference Only."Also, in 80-90 percent of cases, contracts written in Spanish arehandled manually rather than processed automatically.

Mr. Atchinson said that given these new challenges, it is evenmore important that insurers pay extra attention to oversight. "Wehave all learned a brand and a reputation can go negative." Forinstance, a brochure that is translated should be accurate inintent, he explained. Clear communication and follow-up withcustomers are also important points, he added.

It is important that products not be sold for the short term.This could leave middle- and lower-middle-class consumers concernedabout price without insurance at a time when they might not be ashealthy as when the original coverage was purchased, he noted.

According to a recent Harris poll, an agent's reputation forhonesty was cited as an important factor for buying life insuranceby 96 percent of respondents. The price of a policy was cited by 94percent, and 90 percent cited a company's financial rating.

Companies face challenges meeting compliance requirements, Mr.Atchinson said. He noted one case in which it took two full yearsto get one non-English contract in one state approved.