A decade ago, millennials were deemed “the most studied generation” and have since been scrutinized, compared to their predecessors, and blamed for market shifts in sectors like dining, travel and entertainment.
Millennials are growing into the largest segment of the labor force, which has undoubtedly changed how many industries operate. Even some that have remained relatively stable, like insurance, are shifting.
According to the 2022 Insurance Barometer Study, 106 million adults are in need of life insurance or more coverage. At the core of the issue is that 44 percent of millennials report financial insecurity and 16 percent believe they don’t qualify for life insurance coverage (which is often not the case).
What do insurers need to know about how digital-savvy millennials operate and what their motivations might be as they consider insurance coverage? According to a study by Liberty Mutual and Safeco, millennials are more worried about future risks than baby boomers and 18 percent fewer millennials consider themselves “insurance-savvy” compared to boomers.
The study goes on to report that cost is not the primary reason millennials aren’t buying more insurance. An overwhelming 80 percent of millennials want an agent to help them understand insurance coverage and what to expect in the event of a claim. Most are open to working with an independent agent.
Let’s take a look at four ways that you can increase your engagement with millennials that are in the market for coverage.
Reposition the product
Digital transformation has reframed how consumers think about brands and interact with industries. Starbucks made it popular to order your coffee ahead of time on an app and the once laborious process of buying a car can now be done online. Carvana even invented a car vending machine to pick the vehicle up.
Insurers don’t have to be left in the dust. Some are already innovating to attract a younger population. Take Bowtie, for example, Hong Kong’s first virtual insurance company. It’s giving its digital-only platform some brick-and-mortar tangibility through a coffee bar on the ground floor of its office building—a venue for customers to “relax and to raise any questions about their policies.”
Another trailblazer is YuLife, which has gamified its insurance coverage by incentivizing users to participate in physical and mental wellbeing. Users can earn currency in YuLife’s app and cash out with air miles, fitness passes, and gift cards.
Finding a differentiator that puts you in a new light is one of the best ways you can revamp your product positioning to better connect with millennials.
Offer multiple ways to engage
We know that millennials think digital first, so you want to make sure you cover all your digital bases. Are all of your products available online? Does your product landing page provide all the information your customer may need? Do you have an app that improves the user experience over a phone call or a website?
Engagement should tackle one of millennials’ biggest pain points: Understanding the scope of coverage and simplifying the experience.
According to an IBM study, 70 percent of respondents said they’d be likely or very likely to buy life insurance if they better understood offerings and benefits, while 67 percent would if the process were faster or easier.
Personalize the process
Consumers have grown to expect a level of personalization in their communications with brands. Many traditional insurers may have not caught on to this quite yet, but creating a customized process can help them better target, connect with, and sell to customers.
According to the Personalization Pulse Check Report 2021, the top ways consumers in North America and Europe want customization is based on previous purchase history (26%), interests (21%), and recognizing their names (16%).
While this concept may seem new to attracting customers in the insurance industry, it is the way of the future. According to Deloitte’s 2022 Insurance Industry Outlook, 74 percent of insurance companies expect to increase spending on artificial intelligence this year, 72 percent on cloud computing and storage, and 69 percent on data acquisition. This means there’s a wealth of information that is becoming available and that insightful data can be parsed to filter out the clutter and only highlight products that are personalized to meet customers’ individual needs.
Transform agents to advisors
The next step is enabling agents to sell these repositioned, innovative, personalized products. Agents can’t be seen as pushy salespeople, though. Millennials are looking for advisors that can help them make the best decisions.
According to the study by Liberty Mutual and Safeco, 52 percent of millennials say their biggest purchasing factor is getting the most comprehensive coverage for a good price, a significantly higher portion than those who simply want the lowest price even if it means basic coverage (31%).
To empower the shift from sales to counseling, you need to equip your agents with mobile-enabled, analytics-guided tools for better engagement and a more effective sales cycle. Intelligent relationship management recruits digital agents that serve as advisors and re-skills tenured agents to help them play a more active role in improving customer experiences.
Millennials will constitute a significant chunk of the insurance market for the next few decades, and how they engage and make decisions differs from previous generations. To capitalize on this market segment and increase revenue, insurers need to change as well.
Source: Insurance Innovation Reporter