Addressing the life insurance gap: strategies to engage clients

This article was provided by Co-operators.

Consumer needs are ever evolving, partly due to economic uncertainty, but also due to behavioral evolution across life stages and demographic segments. According to the 2023 Canadian Insurance Barometer Study by LIMRA, almost one-third of Canadians are living with a life insurance coverage gap.

Co-operators, a leading multi-line insurer and financial services co-operative, believes this gap presents a critical opportunity for advisors. To realize this opportunity, advisors must understand the diverse needs of clients, and with vast differences across segments this is no small feat. Advisors can leverage strategies that truly resonate and deliver value to help bridge the gap.

Specialist or generalist: Which path leads to success?

It can be challenging for advisors to stay abreast of the unique needs of all Canadians. This may lead an advisor to explore the opportunity to specialize in serving a specific consumer segment or consider being a generalist and serve a wide range of clients across diverse segments.  

The case for specialization

Focusing on a particular demographic, need, or product allows advisors to establish themselves as trusted experts in chosen niche, building deep expertise.

The benefits of specialization:

• Credibility: Specializing in areas like high-net-worth individuals, small business owners or generational segments such as Millennials, positions you as an authority who understands their unique needs.
• Precision marketing: Tailored messaging and targeted marketing efforts resonate more deeply with a specific audience, leading to higher conversion rates and client trust.
• Strong relationships: Specialization fosters loyalty, as clients view you as the go-to advisor who understands their challenges and will be able to provide solutions that fit their needs.
• Clear differentiation: In a crowded market, a defined niche helps you stand out, offering a clear value proposition.

Potential drawbacks to consider:

• Limited market size: While a narrow focus allows you to hone your expertise, it could also restrict your growth potential if the segment isn’t large enough.
• Segment dependency: Over-reliance on one client base may expose you to risks if trends or circumstances shift.

The case for a generalist approach

On the other side, adopting a generalist approach keeps a broader scope serving a diverse client base with wide-ranging needs.

The benefits of being a generalist:

• Broad opportunities: A wide client base offers unrestricted growth potential.
• Diversification of risk: Working with varied client segments spreads your risk. If a specific industry or market experiences downturns, other segments may thrive, shielding you from risk.
• Adaptability: Generalists have the opportunity to quickly pivot to meet new trends or demands, making them versatile in a dynamic industry.

Challenges generalists may face:

• Intense competition: Standing out can be challenging without a clear niche, especially in saturated markets.
• Shallow expertise: Lacking deep specialization may deter clients with complex or specific needs.
• Time management pressures: Serving a diverse client base with varying needs can stretch your time and resources thin, potentially leading to inefficiencies.
• Difficulty building trust: Without a specific area of expertise, clients may question whether you fully understand their unique challenges or goals.

Finding your balance: Specialist, generalist, or both?

Ultimately, the ideal approach complements your personal strengths and aligns with your business goals. Some advisors may find success by blending both strategies—focusing their expertise on a specific segment while keeping the flexibility to serve a broader, diverse client base. Others might excel when adopting one or the other and following through fiercely.

Turning challenges into opportunities

The life insurance gap represents more than untapped potential—it’s a chance to connect with your clients on a deeper level while strengthening your business. With Co-operators by your side, offering a wealth of resources and expertise, you’ll have the support you need to grow your business in today’s competitive environment.

Visit cooperators.ca/advisor-resources/life to see how Co-operators’ comprehensive support and superior service can help you build a brighter future for you and your clients.