This post is part of a series sponsored by AgentSync.
Generally tech-savvy and data-forward, millennials are shaking up the insurance industry both as consumers and insurance professionals.
Defined as those born between 1981 and 1996—ages 40 to 25—millennials are the largest living adult generation in the United States. As of July 2019, the US Census Bureau estimated the millennial population at 72.1 million. And research shows that the millennial generation will continue to grow. Immigration is projected to increase America’s millennial population to 74.9 million by 2033. That’s a lot of millennials.
So it’s no surprise that millennials are making waves in the insurance world. After all, millennials make up nearly a quarter of the adult population. They are entrepreneurs, they are parents, they drive cars, they see doctors and some even work in insurance.
For the insurance industry, the consumption choices of millennials present a huge opportunity to rethink what insurance looks like and how it is sold.
Millennials as consumers
It’s official; millennials are in the market for insurance and they are looking for both personal and commercial insurance. Everything from how they want to buy insurance to the policies they buy differs from longstanding industry practices.
New policy for a new consumer
Okay, millennials aren’t exactly what we’d call “new” consumers. Even the youngest millennials have been in the workforce for a couple of years. But they’re not looking for the same old policies that insurance companies have been selling for decades. No, their lifestyle choices and preferences are very different from previous generations.
Millennials tend to have more education but fewer fixed assets. As a result, they look for policies that respond to their specific needs.
For example, while 80 percent of millennials own a car, only 45 percent own a house. So while auto insurance is the most common type of insurance among millennials, purchases by homeowners are low. Plus, many millennials who own homes don’t think they need homeowner’s insurance.
How millennials choose to live affects when they need insurance and what types of insurance they need. But studying purchasing preferences also highlights areas where millennials are underinsured and offers opportunities to expand education about the importance of policies that millennials generally opt out of.
Build an online presence
While millennials take policy price into account when making purchasing decisions, it’s not the only thing they consider.
Often endearingly referred to as “digital natives,” millennials turn to social media and websites to inform their purchases. Research shows that 55 percent of millennials use search engines to learn about products, and they are twice as likely to buy insurance online than baby boomers.
By building a robust online presence, insurers can own the conversation around which new or existing policies are well-suited to meet millennial needs.
Millennials in the insurance industry
Insurance is not what you can call a flashy industry. With over half of U.S. life insurance agents over the age of 45 and nearly 70 percent of claims adjusters also over the age of 45, the industry’s workforce is aging. As a result, there is about to be a serious vacuum in the insurance talent pool.
It’s a problem. Millennials have the potential to innovate the insurance industry with new ideas about products and policies. So, what can insurance companies do to bring millennials into the fold?
Attract millennials to the insurance professions
When millennials look for new work, they look for meaning and purpose in the jobs they take. It is true that insurance is not traditionally a glamorous industry, but it is also true that insurance has a profound impact on people’s lives.
92 percent of the US population had health insurance for all or part of 2019. That’s not even considering the other industries: auto insurance, life insurance, homeowners insurance, etc.
Insurance affects almost everyone in the United States, and it helps people live life without fear of how an accident or disaster could affect them financially. That freedom of life is an important concept to millennials, and highlighting this effect could go a long way in attracting them to the insurance industry.
Building a cohesive workforce
Attracting a group of millennial insurance professionals is exciting, but it’s still important to ensure existing employees remain engaged. After all, they are full of industry expertise and experience that new hires simply won’t have. While millennials turn to online sources when making purchasing decisions, they still rely on insurance agents for knowledge and advice.
49 percent of millennials want to work with experienced insurance professionals, and only 9 percent indicate they want to work with someone close to their age.
So while the insurance industry must attract millennials to professional opportunities, they should not exclude the existing workforce.
The rise of insurtech
With a focus on technology and innovation, millennials in the insurance industry are rethinking how insurance is bought and sold to meet the demands of today’s consumers, of which millennials are also a part.
Within that innovation we find insurtech – insurance technology – which refers to the use of technologies such as data and artificial intelligence to help insurance meet the needs of today’s digital world. This is more than just creating a website or social media presence without truly leveraging technology to eliminate redundant, manual or outdated processes.
In 2020 alone, global insurtech received $7.2 billion in funding. The insurance industry is changing, and the appetite for that change is huge.
The technologies emerging from this wave of innovation are a response to millennial consumer preferences as well as millennial contributions to the industry as professionals. By rethinking business processes to increase efficiency, these changes mark an exciting time for the insurance industry.
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