Millennials and insurance
Millennials have been on the receiving end of a lot of negative publicity. We take a look at this young generation from an insurance perspective. What kind of insurance consumers are they and what are they looking for in their insurer or broker?
Who are they?
This 2003 report by PriceWaterhouseCoopers defines millennials as the generation of people born between 1980-1995 making them between 22 and 37 years old today. Also known as generation Y, they were born into a global age characterised by innovation, connectivity and economic hardships. These factors have led to millennials developing different behaviours to their parents. They are true digital natives in that they are accustomed to inter-connectivity and the immediacy of technological devices. This is a very important insight.
New wave of consumers
Millennials represent a new wave of consumers who are totally opposite to the baby boomer generation born between 1946-1964. Popular media often paints millennials as entitled, disloyal and lazy. Compared to the workaholic baby boomer generation; one can understand why they may come across like that. Millennials desire a vastly different lifestyle to that of previous generations – preferring experiences over possessions, with an emphasis on family. They are more educated and, as a result, often have more debt much earlier in life. As a consequence of the weakened global economy and population growth, there are fewer jobs available to them, with proportionately lower salaries. This has resulted in them delaying marriage and more serious purchases like homes and family cars.
As the largest generation in numbers so far is graduating and entering the workforce, they will soon wield enormous collective buying power. According to a Pew Research study, millennials will make up 75% of the global workforce by 2030.
Disrupting the insurance industry
Millennials are disrupting a number of consumer industries, and the insurance industry has also been affected. This generation is revolutionising the way we communicate with each other and they are forcing the insurance industry to communicate with them differently to how it was ‘done’ before. Insurance businesses need to evolve – in some cases quite dramatically – to connect with these digital natives. Continuous and authentic conversations online and via social media will offer insurers the best chance of winning them over as they are highly sceptical of typical brand messaging.
Insurers can no longer market or try to distinguish themselves on ‘good service’ or ‘superior products’ as millennials require a far more dependable approach. They are critical of products and services that offer poor user and customer experiences. Showing up on a search engine is absolutely crucial to them – this is a ranking mechanism they hold in very high regard. In fact, they are quite likely to interact with insurance companies via online channels only! This is the reason a strong online presence - fully optimized for mobile use - with an excellent user experience and social channels are critical to these consumers.
What do they want?
Just selling products and services is no longer enough – insurers will need to sell a lifestyle to these new generation consumers. They want to have access to products without the burden of ownership.
As family is key, millennials are quite likely to select an insurer or broker if an influential family member is an existing and happy client. By building brand loyalty with older generations, insurance companies can boost acquisition and retention of millennial family members. However, it is important to realise that millennials do not want the same insurance offerings as their parents did - they want personalised products and technology-friendly services.
The key to this challenging and unique generation includes innovative insurance products and services along with authentic messaging and regular communication.