Millennials + Insurance: 10 Takeaways For The Digital Age

When it comes to industry disruption, Millennials are often the disruptors. From Uber to Airbnb, Millennials have leveraged technology and efficiency to change previously entrenched industries, and insurance may be the next market undergoing a shift in business as usual.

Over and over again younger consumers assert their interest in relationships that feel personalized and authentic. Michele Serro, CEO of Doorsteps, an online tool for housing rentals, found that, when it comes to big life decisions, Millennials want, “products and messaging that make sense together, humanized messaging, brands that clearly listen to Millennials [and] stories of what could be.” For insurance, the desires from Millennials are no different. Insurance marketing must understand who Millennials are and what their preferences are when it comes to being sold insurance.

10 Takeaways On How Millennials Are Changing The Insurance Market

1. Millennials are delaying the milestones that were once commonplace for people in their twenties and thirties. Millennials are later to marry and have kids, and they are more likely to rent and live in cities instead of prioritizing home purchases. These changes in how adults are progressing through life impacts when they need insurance and what kinds of insurance they require.
2. Although housing is 39% more expensive today than it was for Baby Boomers, Millennials are starting to buy homes as they get older and more affluent, often bypassing starter homes altogether. Millennials are also evenly split among cities and suburbs, after many years of choosing the urban life. Some insurance industry experts have found that not all Millennial homeowners think they need homeowner’s insurance. This belief may be because of cost or complexity of the policy and should be considered when targeting this consumer group, with education part of the engagement plan.
3. Local agents are not the route most Millennials take when buying insurance, choosing instead, at a clip higher than any other purchasing group, to buy directly from insurance providers. A study conducted by ORC International, an opinion research corporation, found that younger Millennials are 50% less likely to buy from local insurance agents and, though 40% of respondents purchase home insurance policies from local agents, only 24% of Millennials do. The fast, efficient service offered by national providers appeals to the direct messaging Millennials favor, but the personalized communications and service offered by agents have the ability to encourage agent deals.
4. Niche insurance is emerging to serve disruptive markets like home and car shares, especially for Millennial audiences. “It [the sharing marketplace] has created a demand for new, innovative insurance products. Insurers and brokers who are able to react quickly to the market needs and produce flexible products could quickly [gain an advantage] on their competitors,” said Graeme Trudgill, Executive Director of the British Insurance Brokers’ Association.
5. More flexible pricing options and less entrenched business practices have created opportunities for insurtech companies to cover niche insurance markets. Insurtech-enabled insurance providers, like Lemonade, Metromile and Trov, offer agile insurance solutions and the personalized content Millennials gravitate toward.
6. Auto insurance is the most commonly held form of insurance among Millennials, and should be considered a first step in a long relationship. With strong customer service, auto insurance policies can lead to bundling opportunities for insurance companies looking to sell rental and homeowner policies to Millennials.
7. Millennials are more likely to share personal information that could be useful to insurance marketers if incentivized. Lower insurance premiums, monetary payments, coupons and gift cards can be successful trades for first-party data from Millennials.
8. In general, life insurance isn’t interesting to Millennials. As of 2018, only 10% of Millennials were estimated to be carrying enough life insurance to cover 100% of their needs.
9. Millennial consumers often defer to advice from friends and family, especially when it comes to selecting insurance providers and policies. Referrals and reviews can also make an impact.
10. Paper-based insurance enrollment processes often deter Millennials from taking action. According to Insurancethoughtleadership.com, Millennials want digital transactions that are customer-centric and easily completed on mobile devices.

Insurance Marketers Can Reach Millennials By Modernizing

Like any other consumer group, Millennials are not monolithic, particularly as they get older, earn more and settle into family life. However, they are unlikely to ever be interested in the old ways of doing business. Traditional insurance companies reluctant to offer the mobile-forward, digital strategies that Millennials – and Gen Z – prefer, will get lapped by insurtech companies or other solutions. Creating robust, modern digital marketing and engagement solutions that offer personalized, efficient service, is the way forward for insurance companies looking to scale revenue with this powerful and assertive consumer group.

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