“I don’t want to buy insurance the way my parents do.”
Recently I conducted a focus group of Millennial policyholders to understand their unique perspective on buying insurance. A clear message that resonated from the group was they don’t want to purchase insurance the way their parents do. Insurers understand this and are overhauling how they target, sell to, and service this unique cohort. As you start to reshape your insurance products and service requirements for the Millennial consumer, keep in mind the following three concepts every insurer needs to know about Millennials.
1. Millennials are the largest cohort in US history
Baby Boomers used to be the largest cohort in US history at 77M but now at 92M, Millennials have surpassed them to become the new largest cohort in US history. What is important to keep front and center is that Millennials are entering their prime earning years, so they have the funds available to make investments and purchases. Millennials not only buy insurance, but they are also prime candidates for working in the insurance industry. Keep in mind though, they have technology expectations on how to best perform their job duties.
2. Millennials are the first digital natives
They are the first generation to have grown up with technology, and as a result are incredibly comfortable with it. Consider that many Millennials are more comfortable using technology than talking to a person to make purchases. They are also social and connected and connect with their peer group prior to making purchases. Technology and an online world have given Millennials a platform to reach the world and due to this, insurers need to ensure that Millennials deliver a positive message on their brand.
3. Millennials have less money to spend
If you look at labor data, and in particular compare the mean income of Millennials as a percent of the total population, their total income as a group has steadily decreased over the last 12 years.
Because of this, Millennials are:
Price conscious. Millennials are more likely to switch insurers for a lower price.
Putting off expensive life decisions like marriage and home ownership.
Promoting a sharing economy and paying for usage only (e.g. ride- or car-sharing).
Based on the above, stale insurance products like Homeowners need to be refreshed. Policy purchase and service delivery options also need reevaluation to focus on the unique needs of this unique cohort. Because, in reality they don’t make purchases like their parents do.