Known for their low incomes and high student debt, Millennials, to no one’s surprise, are purchasing insurance at a lower rate than older generations. According to Forrester, less than 20 percent of Millennials even intend to purchase life insurance despite knowing how risky it can be to forego it. Just as marketing tangible products to Millennials has its own set of guidelines, so does selling them insurance. Here are a few things insurance companies should know when targeting Millennial consumers.
Focus on selling renter’s insurance, not just homeowner’s insurance.
Young consumer home ownership is at an all-time low, rendering homeowner’s insurance unnecessary for the majority of Millennials. Not only do Millennials face financial barriers that prevent them from buying homes (the Great Recession, a competitive job market, astronomical student debt), but they also simply don’t care as much about private ownership. The sharing economy emphasizes the Millennial preference to own fewer “things” and, instead, conveniently access the goods and services they need at any given time without the burden of ownership. Companies such as TaskRabbit, Airbnb and Uber support a sharing economy by offering on-demand, paid services.
Though more and more of them are opting to rent homes, Millennial renters are still the least likely group to buy renter’s insurance — or any insurance — from agents. Insurance companies must home in on this growing demographic and offer more affordable rental insurance options that showcase the exact benefits of having it, such as coverage for theft, water damage or vandalism. Of people under age 30, 41 percent of those surveyed said the reason they did not have renter’s insurance was because they did not understand how it works, nor how inexpensive it can be. Accessible educational resources and advertisements would benefit insurance companies in the long run by providing Millennials with the knowledge they need to make an educated decision.
Create a strong digital presence.
This may seem like a no-brainer in today’s omnichannel and digital world, but the average age of an insurance agent in the current market is 60 years old. This means a significant fraction of the industry was not trained in digital programs from the get-go and still utilizes traditional sales methods — mainly in-person transactions. In fact, only six percent of U.S. homeowner’s insurance sales take place online. Compared to the travel industry, where 90 percent of sales occur online, the insurance industry’s digital functionality is in dire need of an evolution.
Consider this: Millennials are twice as likely as other generations to interact with and purchase from insurance companies online. Therefore, it’s imperative to have an active social media presence and a mobile-optimized website so that users can easily research, file claims and purchase new policies at any time. Simply having an accessible, user-friendly website greatly increases a company’s chances of success with Millennial consumers, and this is the first step companies who have yet to digitize should take.
Offer customized plans.
Millennials are not interested in their grandpa’s insurance plan. Rather than having to choose from a select number of traditional plans that don’t exactly match up with their needs, they expect insurance companies to tailor their policies to fit a younger consumer’s lifestyle. A single 20-something woman won’t be interested in purchasing a plan that supports a spouse and dependents that she doesn’t even have. But, an older Millennial entering the parenting life stage will.
Although a generation once defined by the logos they wore (like Abercrombie, Hollister and Aeropostale) Millennials have tossed their branded identities out the window and are instead pursuing more personalized definitions of who they are. This not only affects their purchasing decisions in regard to externally visible products, such as clothing and cars, but also what they look for when it comes to their intangible needs. When it comes to insurance, personalized prices, services and quotes are the way to every Millennial’s heart.
By appealing to the Millennial generation’s preference for straightforward digital experiences and individual customization while also focusing on the assets that they do have, insurance companies can develop a more pleasant and effective consumer experience that is sure to increase this generation’s interest in the industry.