In an era of immediate access to nearly everything online, millennials, or digital natives, as our latest Insurance 2020 report refers to them, have become used to a life of instant gratification. Whether it’s puppies delivered to your office for a playdate via Uber or a detailed comparison of possible restaurants for dinner in your area, it can all be done instantly with a touch on the screen of your mobile device.
The same should go for purchasing insurance. Our recent report found that 71% of all consumers did some research online before buying an insurance policy—and this figure represents both digital natives and beyond, confirming that access to instant information has become a way of life. Gone are the days of a salesperson sitting at your dining room table and showing you the array of different products available.
Millennials are an enigma, but if insurance companies don’t target this group specifically, they risk missing a major consumer market.
A survey by Princeton Survey Research Associates International reported that 66% of millennials rent their homes and of that subset 70% don’t have renters’ insurance.
While millennials might think they don’t have enough stuff to protect, I believe they fail to understand that insurance covers much more than their guitar and organic cotton T-shirt collections. But in all seriousness, if insurance companies were able to help millennials understand that renters’ insurance covers more than basic property coverage and extends to liability, for example, I imagine the numbers of insured renters would be quite different.
If insurance companies want to prioritize millennials as a customer group, they’ll need to get a solid understanding of what needs to be done to guide them to purchase. Prioritizing meeting millennials in their marketplace, selling them products they might not want, but understand they need, is a great step in the right direction. Innovators and disruptors are emerging daily and without the burden of legacy systems—how would you operate differently if you started fresh tomorrow? These disruptors are flooding the market with the same core products currently offered but in newly imagined and accessible ways. It certainly begs the question—if they can do it, why can’t you?
Make the most of digital:
If it’s not easy to find online, they’re probably not going to buy it. If it’s not easy to manage and maintain, it’s less likely to be adopted. A strong app or online platform that allows the user to submit forms and track the progress of their claim is one of many approaches to meeting millennials in the digital marketplace.
Teach about value:
Unless millennials clearly see why they need to put money towards the insurance policy, they’re unlikely to make the shift.
Keep it simple:
Make it easy for them to compare product features, prices and reviews. If it’s personable and relatable, millennials are more likely to be receptive.
The vast number of millennials coming of age means there’s going to be a significant influx of potential new insurance customers. And companies that are prepared to invest in targeting them effectively have the potential to create long-term clients as their needs and priorities change—after all, we won’t be in our 20s forever.
Embrace the cloud:
The cloud offerings in insurance are maturing quickly and can facilitate cost reduction while freeing up your resources and budget to manage the growing challenges of InsurTech.
Use new data sources to get a more granular view of the risk:
Use new data sources to get a more granular view of the risk. This will offer a key competitive advantage in a market where risk selection and pricing strategies could be augmented and will allow you to explore unpenetrated segments. The ability to collect and analyze huge amounts of data will allow you to shift from reactive protection models to more sophisticated and proactive prevention models, thus enabling self-directed personalized customer service.
Work with your customers:
Work with your customers. Explore different approaches to support existing advisers to bring direct-to-consumer solutions. Digital offerings and the early deployment of robotics can dramatically change your cost-to-service paradigm. Advanced analytics to simulate future scenarios will help customers and advisers align financial goals and portfolios.
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