3 Ways Insurers Can Capitalize on the Generational Wealth Transfer

$68 trillion. It’s a mind-blowing number. An estimated $68 trillion is expected to shift from the country’s oldest generations to younger generations over the coming years in what’s being called “The Great Wealth Transfer.” That’s nearly 10 times the 2024 U.S. federal budget ($6.9 trillion) and more than 35 times Amazon's net value ($1.94 trillion).

The question is…what are you, as an insurer, doing about it? How can you seize this pivotal moment to grow your business, instead of passively watching it unfold? 

Here, we’ll share three smart ideas for capitalizing on this once-in-a-lifetime opportunity to help your insurance business thrive amid a potentially disruptive industry shakeup.   

1. Ask the hard questions now. Today’s trillions of dollars in wealth—largely held by Baby Boomers and the generation before them—will likely pass to family members in the next 20 or so years, while some will be donated to charitable organizations, nonprofits, etc. 

It is important to plan for your next steps today. This involves asking hard questions.

• How well do I know my customers and their families who may inherit sizable wealth, property, and other assets?

• What steps can I take today to build stronger relationships with my customers and their families moving forward? 

• How can I  win people’s trust, loyalty, and future business? 

• How will I replace business if my customers’ family members decide to part ways and insure their inherited wealth elsewhere? 

There are no right or wrong answers. But, how you respond to these questions can help determine your best path forward. From there, you can start filling in the blanks and crafting a preemptive action plan.  

2. Identify and target “right-now” opportunities. Immediately focus on your conversations with high-net-worth and ultra-high-net-worth customers and prospects, both inside and outside your existing portfolio. 

Sure, you can start by rank-ordering your wealthiest accounts based on your current customer data. But can you trust the accuracy, completeness, and freshness of your data? And what about high-value prospects? How will you find them and engage them on a personal level that moves them to act? 

Equifax can help with this. Use our differentiated consumer economic data to update and expand your customer profiles. Ensure you’re working with the most complete, up-to-date picture of individual clients and prospects. Our data includes detailed insights related to:

• employment, 

• income, 

• wealth and affluence, 

• spending, 

• credit capacity, 

• financial durability (a consumer’s ability to withstand financial stress), and more. 

You’ll create panoramic client views that help cut risky blind spots and fill critical information gaps so you can see the bigger opportunity associated with every client. That includes knowing which ones to target right now based on their net worth and future trajectory. 

For example, a financial organization used our consumer economic data to pinpoint prospects likely to have between $100,000 and $1 million in invested assets. This narrows its target audience by 90 percent. Our data is that effective, and it can help you too. 

Below are two examples of how you can use our consumer data to become more proactive. 

• Identify high-net-worth and ultra-high-net-worth clients within your portfolio. Augment your current portfolio data with our consumer economic data. Based on your updated wealth insights, segment your clients into smaller groups based on their various degrees of net worth. Grab their attention and move them to act by executing hyper-personalized campaigns that consistently engage your highest-value segments via a mix of their preferred marketing channels. Include their name, along with tailored language, tone, and imagery that reflects where they are in life. This includes their level of wealth and affluence, age, location, and more. 

• Model and target “lookalike” customers and prospects. Use Equifax consumer economic data to model your most valuable clients. This involves isolating key attributes that your top clients all have in common. Use those traits to construct a picture of what an ideal high-value client looks like. You can then use this profile to build an acquisition model that pinpoints prospects who mirror your highest-value clients. 

This approach helps optimize your marketing resources while speeding up the sales cycle. The approach gives you the ability to get in front of top clients and prospects, faster. Like, “ahead-of-other-insurers” faster. 

3. Become customer-obsessed. This is more of a mindset. While it’s smart to be concerned about the impact a massive transfer of wealth might have on your business, also start thinking about the market from your client’s perspective. 

What keeps them awake at night? Are they concerned about outliving their wealth? Are soaring inflation and economic instability increasing their financial stress and limiting their ability to build wealth? Are they acquiring new property and assets or downsizing? Are their family dynamics changing due to remarriage, divorce, or a life-altering illness, leaving them unsure about how to move forward? Are they getting older and wanting to check in with you more frequently? 

Our consumer economic data can help. While it can’t answer every question, you can use it to develop a personal understanding of your clients down to the individual household level. You’ll better understand if their spending habits have changed, if their income, wealth, and assets are growing or shrinking, if their household composition has changed in size or location, and more. 

You can then use these insights to think differently about your clients and fold their perspectives, concerns, and motivations into your client and prospecting campaigns. 

Here’s one way to execute this data-driven approach. 

• Enrich and monitor your client profiles using Equifax consumer economic data and note changes in spending behaviors, wealth, and credit capacity and usage. As needed, based on the size and frequency of changes, contact your clients to touch base and engage in open-ended discussions about their evolving coverage needs. 

Not only will your timing be “on point,” but this can position you as a client-first provider among both your highest value clients and your potentially under-insured clients. It can also lead to bundling opportunities that provide significant cost savings for your clients. Last, it supports strategic cross-selling and upselling that can deepen the client relationship and make your business stickier to the client (and their family, down the road). 

Win and keep more business with the right data. Every insurer is targeting high-value customers, and the simple fact is this: whoever has the best data stands a better chance of winning their business.

Yet, it’s important to clarify that not all consumer data is created equal. Often, it’s self-provided by consumers via surveys or websites, which can make the data less reliable. Sometimes, it’s estimated in ranges (as with income data), and those ranges can vary, making it less precise and less useful in targeting. 

At Equifax, our consumer economic data is unique and often preferred by insurers because it’s the only data built from actual balance data, not estimates, and it covers nearly every household in America. 

• It measures $27 trillion in anonymous U.S. consumer investable assets (representing about 45 percent of all U.S. consumer-invested assets) to derive financial measures that help you clearly recognize consumers who are high-value and ultra-high-value targets. 

• It’s built without using personally identifying information. Everything is anonymized. 

• It reveals total financial capacity—beyond the paycheck—with continuous dollar values of total estimated income up to $2 million, including income from wages, investments, businesses, and retirement funds, plus measures of affluence, discretionary spending, financial durability, and credit usage.

• It includes consumer channel preferences so you can engage audiences via their preferred marketing channel(s). Given the vastly different preferences of generational segments, with older audiences often preferring phone calls, mail, and email while younger audiences lean toward texts and apps, the importance of this data nugget cannot be overstated. 

Instead of sitting on the sidelines during “The Great Wealth Transfer,” it’s time to act because the truth is, it’s already underway. By enriching your existing data with comprehensive consumer economic insights, you can expertly target and engage your high-value and high-potential insurance clients—wherever they are in life—with tailored strategies that boost your chances of growing and keeping your existing accounts and winning new prospect business. Explore the Equifax insurance page to how we can help your insurance business. 

**(c) Equifax Inc. 2024.  The statistics provided in these materials are to be used for informational purposes only.  The information provided is solely for illustrative purposes and for no other purpose or use.