A recent study conducted by Princeton Survey Research Associates International, shows that the way millennials purchase (or rather don’t purchase) insurance has changed - only 64% of them have auto insurance, 10% have homeowners insurance and 13% have renters insurance.
Many in the millennial generation are delaying life events – including marriage, children and purchasing a home. While this will likely change in the next few years as they get older and make more money, it is imperative that companies look ahead – and quickly.
Why? The companies that can adapt to this maturing generation will have a better shot of winning over this, the largest, most diverse generation.
By 2017, millennials will have the most buying power of any generation and will be the driving economic force for the next 50 years. It’s not a matter of “if” millennials will gain financial independence; it’s a matter of “when.” Many insurers believe that millennials are maturing a decade later their parents in all traditional rites of passage. Nevertheless, this cohort is starting to become more powerful – deeper wallets, more powerful jobs, and greater life experiences which means the industry must start to adjust and quickly.
To successfully serve this generation, insurance companies must consider the position millennials hold in today’s economy, as well as the role they play as consumers in shaping the insurance industry.
Be where millennials are – online! Have an online presence! Insurance companies across the board have to be much more innovative if they want to sell to millennials. Millennials spend more time researching their purchases online, they also value independent ratings, social medical and friends opinions about products and services. Remember, millennials have different shopping habits – they prefer to shop online. They want to do their research online and review educational materials on their smartphones. To speak to millennials, insurance companies must be on their platform of choice – the Internet.
Know your millennials! Three quarters of millennials are unmarried – a reality that makes it hard to sell life insurance to them! In fact, less than 20% are likely to buy life insurance at all. Most don’t own things, as millennials, on average, seem to value experiences more than stuff. As such, millennials have fewer assets to protect – this translates to their desire to protect themselves. To millennials, quality of life matters more than money. Living for today matters greatly – tomorrow, that’s way off in the future. Millennials prefer access to ownership – they rent apartments and prefer Uber and Zipcar to auto ownership.
According to a recent article in Forbes, Will Millennials Just Uber Their Life? the auto market is in a frenzy because of the growing number of Millennials who are not purchasing vehicles. Instead of spending their money on buying a car, they have chosen public transportation and been tagged the generation of Uber and Zipcar. Insurance companies must changes to meet millennial desires and demands – for example, less home owners insurance more renters insurance.
Operate transparently! The first step should be helping prospective buyers answer the core question: ‘How much coverage do I really need?’ From there, providing a straightforward application is key. Allowing Millennials to compare and select different quotes, term lengths and plans gives buyers the confidence that they’ve purchased the best plan for their life stage. Additionally, implementing a ‘plain language’ policy allows for prospective buyers to read through the full terms and policy offerings with clearer, consumer-friendly wording, in stark contrast to the legal language of most policies. Remember, millennials distrust large organizations and don’t like gimmicky advertising.