Selling personal lines insurance products to the lesbian, gay, bisexual and transgender (LGBT) community is part of a diverse marketing strategy that an agent or broker can use to gain additional clients.

According to Diversity Inc. magazine, between 15 to 16 million adult Americans, which translates to at least 6 percent of the U.S. population, identify themselves as lesbian, gay, bisexual or transgender, but many estimate the actual percentage to be about 10 percent. Also worth noting is that members of the LGBT community have a large network of people who support them. According to Diversity Inc., 78 percent of LGBT people and their friends or relatives would switch brands to the companies that are known as LGBT friendly.

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In addition, Diversity Inc. estimates the buying power of this community to be $712 billion and is projected to reach $835 billion by 2011.

It is precisely that buying power that gives Donna Griffin, Chubb's chief diversity officer, motivation for marketing to the LGBT community: “When you look at the group demographics, they tend to have more disposable income and purchasing ability. From an insurance standpoint, that means more assets to protect.”

Findings from the U.S. Census Bureau and the Washington D.C. Urban Institute report that more than two-thirds (67.6 percent) of same-sex couples own a home, 19.6 percent of homeowners live in a home valued at more than $250,000, and 5 percent live in a home valued at more than $500,000. In addition, 76 percent of LGBT individuals have annual household incomes above the national average of $40,000 and 30 percent of LGBT individuals have an annual income above $100,000.

However, Griffin added that there are some demographic differences among the generations. While baby boomer gays and lesbians are more affluent
because they tended not to have children, those in Generation X or Generation Y–sometimes referred to as Millennials–tend to have a greater focus on creating families.

“Their insurance needs will reflect those generational differences,” she said.

In fact, the Human Rights Campaign notes that the number of LGBT-headed families continues to grow. A 2007 joint study between the Urban Institute and the Williams Institute UCLA School of Law shows more than one in three lesbians have given birth, one in six gay men have fathered or adopted a child, and an estimated 14,000 foster children are living with lesbian or gay parents.

Know your customer

Larry Colton, board member and senior advisor for Fort Point Insurance, an independent insurance agency in San Francisco, advises agents and brokers who are interested in marketing to the LGBT community to avoid painting the community with a broad brush.

“Insurance is always a relationship business. If you want to market to the community, then it's important to be involved in that community and demonstrate affinity to the group,” he said.

This could include involvement in a political action group or an LGBT-related non-profit organization, Colton said.

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The LGBT community mirrors the heterosexual community in that its members face many of the same issues and want to work with those they trust, Colton said. Agents need to understand and know their customers, their lifestyle and to make no assumptions. That process begins in asking the right questions and in knowing the client's asset base in order to protect it.

“Know who you're serving,” he said.

Colton also has a wide referral network, including financial planners and wealth managers, to help his clients manage their assets. But he cautions agents not to use the LGBT label as a selling point.

“There is no relevance to sexuality. People choose those who they trust and want to do business with,” he said.

Colton also suggests: “Just how agents would recognize the significant life events for their heterosexual clients, they need to do the same for their LGBT clients.”

Making LGBT employees feel welcome

Marketing to the LGBT community also involves making LGBT employees feel welcome in the agency workplace.

To begin marketing to this community, your agency should be a diverse employer to better reflect the customers you serve and to bring in and retain talent that gives your agency a broader perspective. This approach makes sense when, according to Community Marketing Inc., same-sex couples live in 99 percent of counties in the U.S.

An agency can enact its own policies encouraging equal opportunity for all, regardless of gender identity or sexual orientation. For help in instituting these non-discrimination policies and transitioning the agency workplace, consult your agency's human resources department as well as legal counsel.

An agency also may want to think about attending events organized by Out and Equal, one of the largest and most visible national nonprofit organizations dedicated to achieving workplace equality for LGBT employees and professionals. Every year, the group conducts the Out and Equal Workplace Summit, which brings together human resources professionals, diversity managers, employee resource group leaders and others to share best practices and formulate strategies to create an inclusive workplace.

Agency participation at this summit can provide visibility as an employer of choice for the LGBT community and its allies. In addition, it keeps organizations aware of emerging practices and issues.

Making the agency an inclusive workplace is to provide benefits to same-sex partners. According to the Human Rights Campaign, the majority of the largest employers, those with 5,000 or more employees, now provide benefits to same-sex partners and spouses of employees. As of September 2009, 22 of the Fortune 100 companies have removed discriminatory language from their health insurance plans to allow coverage for transgender-related medical treatment, according to the Human Rights Campaign.

Supporting LGBT causes

This community does care if a company is “LGBT friendly.” According to Community Marketing Inc., 88 percent of gay men and 91 percent of lesbians report that their purchase of products and services is influenced by a company's sponsorship of LGBT events and participation in LGBT organizations.

Miraj Patel, vice president and Diversity Council member of Guy Carpenter, a risk and reinsurance specialist and part of the Marsh and McLennan Companies, agrees that the LGBT community responds well to organizations that display visible signs of inclusion to LGBT considerations.

“The LGBT community has higher expectations of how a company interacts with its community,” Patel said. “Community involvement is highly important to them and it's not only for LGBT causes, but overall how a company is contributing to non-profit organizations. They also pick up language nuances that others may miss.”

He cites the example of using “partner” along with “spouse” in keeping up with inclusive language.

Other marketing tips

According to research from Forrester Research, members of the LGBT community spend 57 percent more time online than their heterosexual counterparts. Witeck-Combs Communications says that 80 percent of LGBT Americans are considered heavy users of the Internet (defined as 8 or more hours spent on the Internet per week) compared with 66 percent of heterosexuals. An agency may want to consider online marketing efforts to reach this target audience.

If an agency is new to marketing to the LGBT community, consider getting insight about the marketplace by working with agencies that specialize in reaching the LGBT community.

Identifying and working with the LGBT community is critical to your agency's success and should be a part of your diversity marketing mix.

Special Reports /

Market to LGBT Community

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