March 12, 2020

What Do Insurance Companies Need to Do to Stay Relevant for Millennials?

Technology has made inroads into our day-to-day living and has practically disrupted every industry. And one of the key drivers that are riding the technological bandwagon is the growing population of millennials and Gen Z.

The U.S. Bureau of Labor Statistics predicts that by 2030, 75% of the U.S. workforce will be made up of millennials.

The generations of millennials and Gen Z are now occupying a majority of the world’s earning community, and their financial footprints are defining how financial products, including insurance, are undergoing a massive revamp.

One of the strikingly distinct millennial characteristics is their changing approach towards finance. Millennials are known to be less into tightly set jobs, enjoy more financial independence even if it means cutting down on personal luxuries, and prefer not investing in homes and cars.

But this doesn’t mean that the millennials are not good planners. In fact, with their location-independent job preferences and ‘you only live once’ affirmation, millennials make serious decisions to secure their future.

Sadly though, the insurance companies today are still lingering in the baby-boomer mindset, crafting products as well as positioning that is not very relevant to the millennials. To engage with the millennials, grab their eyeballs, and seal serious deals, the insurance companies need to absorb the millennial mentality. After all, the future is all about them!

Let’s have a look at what insurance companies need to do to stay relevant for millennials –

Resonate millennials’ love for technology

Did you know? More than 93% of millennials own smartphones?

Technology is one of the most integral parts of the lives of millennials, and insurance is no exception. The insurance companies that are still sticking to the conventional model with laborious manual work are missing to hit the spot with the millennials. Millennials like to do their own research, make an informed purchase decision, and hence, it is important for the insurance companies to have an online presence. This includes having an app and a website, with information and value-adding content that can help millennials pick a product and ease their purchasing decision.

For insurance companies to earn a place in the life of millennials, embracing the InsurTech ecosystem is the way to go!

Keep up with their value for time and convenience

An eased-up buying process is something that millennials always look for. They value time and convenience and hence do not like to be stuck with paperwork, long queues, and making rounds to the office. Along with the online presence, the insurance companies also need to have a strong online payment system to make the buying process easy and convenient for the millennials. If they want to purchase insurance at 2 in the morning from a remote beach in Thailand, they should be able to do that!

Cater to their individuality

From healthcare to travel, from education to retail, bespoke is a very millennial thing!

70% of millennials are frustrated with brands sending them irrelevant marketing emails. They prefer personalized emails over blast communications.

Millennials love personalization and wouldn’t pick anything off the rack just because everyone else did. They are extremely clear about their needs and requirements and, more often than not, want a solution that exactly fits their problem set. Insurance companies can hit the right note by offering personalized products to the millennials as per their needs, wants, preferences, and goals. A dedicated resource (preferably online!) for handling their queries and offering advice will be a cherry on top.

Contribute to the social good

78% of millennials don’t mind spending more on a product or service that is more ethical than a cheaper option

Millennials are all about associating with larger world issues and are fortunately the ones who really care about making a difference. From technology products that are marked ‘Product Red’ to sourcing sustainable, organic, non-GMO, hyper-local food produce, the millennials take social cause very seriously. Insurance companies can touch base with the millennials and strike an emotion about their brand by attaching a social value to their brand.

Millennials are price sensitive but would rather go for a company that does some social good, even if that means paying a little higher price.

Provide enough social proof and validation

As mentioned before, millennials are self-educators, which means they do a lot of research before making a purchase decision. While strong content on the website can be a good starting point, the next step is to ensure that there are enough positive reviews about the insurance company’s products as well as the quality of support, the buying process, etc. The millennials hunt for friends and family opinions as well, so having a good word around generally helps, although it might not be enough. Insurance companies that craft stories around their products and consumers are also helping in furthering the buying decision of millennials.

Companies can create interactive videos, a strong brand and product messaging that correlate to each other. They also need to have a visible presence on social media for the same.

Closing lines…

The millennials are interesting people with unique buyer personas. They are the future and are here to stay. Insurance companies are recommended to go that extra mile to build a connection and trust with the millennials. With a demographic as large as theirs, ignoring them can be a huge business mistake!

Insurance companies can gear up for offering personalization and technological intervention, ditching their traditional ways of operations.

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