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By 2025, millennial’s will account for 75% of the global market. While this may sound like a promising figure for the insurance industry, the reality is that Millennial’s aren’t embracing insurance at the same rates that older generations do. It’s important to understand the rationale behind this and also what can be done to change it.
There is no doubt that the way in which millennials utilize insurance is vastly different than the way members of older generations do. One reason is due to the fact that they are reaching certain milestones so much later in life than previous generations. Millennials are delaying things like buying a house, getting married, and having children. As a result, they do not experience any sense of urgency to obtain certain coverages, specifically life insurance and home owners.
Along the same lines, millennials are opting for various ride/car share options like Uber, Lyft, or Zipcar rather than owning a vehicle of their own. This shifts the need for auto insurance from the individual to the ride/car share company. These changes can be explained by a major characteristic of millennials: valuing experiences more than things. Most millennials would choose to spend their money on an adventure creating memories rather than buying a car or house. This greatly reduces their need and desire for insurance.
If insurance companies choose not to evolve in order to pursue the business of millennials, they could miss a big opportunity. In order to tap into this market, companies must be prepared to alter things, starting with how they embrace technology. It has become a necessity to not only offer all available services online, but offer them on a top-notch, user friendly website. Millennials are not interested in going into an office for their needs; they’ve become accustomed to accessing everything from the comfort of their own homes via mobile browsing.
On the subject of technology, insurance companies may want to consider reassessing their marketing strategies to fully utilize social media. Millennials are relying on word of mouth from various social media platforms and review websites more heavily than any other generation. Neglect of social media means agencies risk becoming obsolete in the eyes of millennials.
Marketing has also changed outside the realm of social media. The typical millennial does not want to be advertised to and would prefer not to hear a sales pitch. As a company and specifically as a broker, an opportunity exists to establish a certain rapport between the agency and the millennial. In general, they want to feel like they can trust the other party and be led through the process. This is especially true as millennials are relatively uneducated about insurance. This creates a solid opportunity to educate them and explain to them how certain insurances can play a critical role in their lives.
The millennial market is one that cannot be overlooked and it will become increasingly important to focus on how to gain business in a millennial-dominated economy. To learn more, contact any of us at Propel.
SOURCE: Agency Nation