The insurance industry is realizing how Millennial demand for insurance is different from that of earlier generations
As life’s baton get handed over from one generation to another, Millennials are ready to accept the responsibility of becoming America’s largest living adult population at 73 million.
With Millennials thus becoming an economically significant force, businesses are gradually realizing they need to change their response to meet a different demand, for the Millennial perspective is unique in terms of how they view the world. Millennial expert Crystal Kadakia said, “People who have been there forever, left to their own devices, are rarely in the best position to design the future. It’s those who consciously listen to the constituents of the future who can understand which direction to move in.”
As it happens, the Millennials’ intimate bond with technology is affecting the way they function day-to-day. For one thing, today, there are so many media options, it is only to be expected, as disclosed in the first-quarter 2018 Nielsen Total Audience Report, that American adults spend over 11 hours of their day consuming a variety of content in ever-growing media platforms. There is also Generation Z comprising multicultural young people who leverage these platforms adroitly, waiting in the wings for adulthood.
Even as they read content, Millennials use their smartphones to research products and scan peer reviews to check if the product they read about is what they are really looking for, for the purpose they have in mind.
This is a crucial point when it comes to Millennial purchases. They consult like-minded consumers online, seeking their views rather than the views of the manufacturers. This also applies to the insurance industry, worth over $1.2 trillion dollars, and is undeniably one of the most lucrative businesses in the world.
Millennials are, thus, influencing significant change with their unique perspective on products. Along with customized products, Millennials demand exceptional customer service. So, “delighting” the customer has become the pivotal concept driving insurance companies and brokers like BrokerLink and other industries around the marketing landscape.
A recent study by the American Public Transportation Association (APTA) found that Millennials, more than any other generation, are inclined to use a blend of travel methods, such as driving, walking, biking and public transport. Even as Millennials opt to use other means of transportation than their own cars, there has been a significant decline in the number of drivers’ licenses issued to teenagers and young adults. When comparing the number drivers’ licenses issued over the past 30 years, a 47% decline is apparent among 16-year olds, while the 30-34-year olds are receiving 10% fewer licenses than 30 years ago.
In fact, the high cost of auto insurance is one of the main reasons that buying and owning a car is so overwhelming for Millennials. Auto insurance quotes are three times more expensive for teen drivers than for people in their mid-thirties. As teen drivers add experience and years to their lives, their insurance rates drop. Therefore, many young people have delayed buying cars, and many prefer to use ride services or public transport than go through the hassle of owning a car.
From another perspective, a large number of Millennials are delaying buying houses and are living with their parents, or are renting. A significant reason for this trend is overwhelming student debt. With homeownership on the decline, the demand for home insurance is stagnant as well. However, renter’s insurance has seen a rise in recent years. There is a rise in demand for renters’ insurance because of decline in homeownership due to delayed marriage, college enrollment and shifts in labor force participation. Reduction in buying houses, though, does not mean there is a decline in demand for insuring the content of houses. And insurance companies are alert to that fact.
There are yet other areas of insurance like life insurance that Millennials give scant attention to. Only 10% of Millennials say they have enough life insurance in place to take care of their families in case they die early. On the other hand, insurance companies observe that millennial preoccupation in good jobs has fueled demand for income insurance providers.
As Crystal Kadakia said, “We thrive when we are pulled by the future, not pushed by the past.”