There is no doubt about the importance of capturing the Millennial consumer. According to the US Census Bureau, there are 80 million people making up the millennial generation, or anyone born between 1980-2000. Look out, Baby Boomers. Millennials are officially the most populated generational group in the U.S. EVER and how they go about making purchasing decisions is very different than any group before them. Why does this matter for insurance? Here are a few major reasons.
Millennial life looks very different than Baby Boomer life did at the same age. Pew Institute Research Center has estimated that only a quarter of Millennials are married – compared to nearly 60% of Baby Boomers at the same age. Furthermore, a 2016 Goldman Sachs study on Millennials spending and lifestyle habits demonstrated that Millennials are deferring major purchases like cars in favor of engaging with the sharing economy and utilizing ride-sharing options like ZipCar or Uber.
Opportunity for Insurers: Recognize that one size does NOT fit all. Millennials don’t do not live like their parents or grandparents. They are used to having a plethora of options to pick and choose from in order to get to the end product that is right for them and how they approach insurance is no different.
Purchasing style looks very different. Though Millennials face difficult economic barriers like massive student loans and a sluggish economy, they are still a powerhouse: AdAge estimates that Millennials will spend over $10 trillion dollars in their lifetime. How they spend this money is unique: they tend to be less brand-loyal and demand more transparency. An IBM Business Institute survey showed that comparison-shopping and personalized, user tailored experiences are extremely important pieces of the buyer process.
Opportunity for Insurers: Get comfortable with transparency. Build up social media and online presence with the purpose of more than just outright selling. By laying down the groundwork as an information provider, it helps create an open relationship that is appealing to Millennials. The Milliennial is not looking for an agent to reach out after this exchange, but to find information that will enable them to make their decisions.
Immediacy is Key. Millennials spend much of their time digitally – and it shows in every facet of their lives. For the generations that came before them, word of mouth was a powerful influencer when it came to making large purchases, including insurance. Previously, families would have a local agent and stick with that agent for decades. These agents would spend face time with their customers over time. Millennials prefer something more immediate and tend to prefer searching for information themselves than relying on advice of friends and family.
Opportunity for Insurers: Two words: prioritize digital. Not only do Millennials want to spend less time speaking on the phone or meeting in person, they want their answers RIGHTNOW. Upgrade any consumer facing websites to make sure the user experience is flawless, the design is appealing and fresh, and without a doubt, make sure it’s all mobile friendly. Goldman Sachs estimates that over 85% of Millennials own smart phones and do a majority of their browsing on alternative screens. If they can’t engage in those mediums, it’s a missed opportunity.
No doubt finding and maintaining success for insurers requires capturing Millennials as consumers. This means engaging with them on their terms and in the way that they like to be reached.