Once upon a time, life seemed to be divided into compartments. Work was work. Home was home. You drove a car or commuted to work or business. Your work stayed at work. You slept and ate at home. You might drive back to a movie or a restaurant on the weekend. With the exception of agricultural jobs, where home and farm were often the same, most of us lived and worked in these unions. The insurance companies understood the departments and they insured them in an appropriate way. But most importantly, the insurance companies and their agent channels knew how to catch us where we were most likely to take out insurance. They were good at selling.
Convenience and technology, however, kept creeping into the picture. We got our newspapers and mail delivered to our homes or digitally. We had movies in the mail and now we download and stream them. We got pizza delivered and now we can get almost any restaurant food and food via apps. We ordered books online with one click and now we can download them to read on tablets.
This stream of ease and use of technology gave us a taste of how the desire for convenience could improve our life experiences. Aspects of our compartments seeped into the other compartments. This made sales more difficult. All industries had to reconsider their products and services from the customer's point of view ̵
And we are now evolving beyond convenience. Life is no longer divided into compartments. It has become complicated. Customers want simplification and a holistic view to manage their lives in many different areas. And insurance companies need to be aware of the changes. What happens when a large part of the population starts driving their cars for work instead of to work or many people switch to work at home instead of working "at work"? What if they want value-added services to manage risks – from their homes and cars to their health and more? It is radical changes that write about the insurance stories. The nature of home, work, business and family erases the conceptual lines that kept insurance "traditional".
That's why Majesco creates our annual consumer survey report – arguably our most comprehensive and insightful look at trends already affecting insurance companies, even if they realize it!
In just a couple of weeks you'll be able to download and read the 2021 Consumer Report, but right now you can listen to Majesco's latest webinar, Your Insurance Customers: A Crystal Ball of Big Changes in a Small Window of Time to See What what happens that affects you and your organization. In this blog we will also give you a high level look at some of the most effective trends. Some of them will make you want to fast-forward your strategic plans. Others may make you think about how your organization fits into other ecosystems that customers want and are willing to buy insurance from. Whatever you find, you will be better informed as you wrestle with important decisions and future plans.
Gen Z and Millennial Lens
Although Majesco's Consumer Survey report covers all age groups, insurance companies concerned about the near future will be most interested in change and interests among Gen Z and Millennials. They are now the dominant buyers of both life and non-life insurance products with a focus on five specific segments: life / health / accidents, employees / voluntary benefits, car, mobility and homeowner / rental insurance.
Millennial and Gen Z life journeys have not followed the traditional path set by older generations, with high proportions remaining single and not married but with partners. They have made other significant lifestyle changes from older generations that result in different risk needs that require different insurance needs.
Over the next three years, Gen Z and Millennials plan to accelerate their life journeys through rapid change, surpassing the older ones. generation in all aspects, including twice the average rate of change in the home, work and mobility aspects of their lives.
These changes are in line with a change in expectations of the types of insurance products they need, the need for value-added services and the demand for personal insurance. This will put pressure on insurance companies to accelerate and improve IoT and data strategies.
Millennial and Gen Z populations want a holistic customer experience – where digital offerings bring together other products and services to help the customer manage their lives. This requires a complete overview for customers of their insurance products, value-added services and non-insurance products. When the insurance companies are unable to deliver that view, a gap arises between customers' expectations and what the insurance companies deliver. This gap opens the door for new competitors to meet that expectation – either directly or through partnerships with insurance companies. Just think of what companies like Toyota, Sofi, Ford, Petco, Outdoorsy do by offering insurance products through embedding or partnering on channel alternatives with different insurance companies. This year's research provides clarity for the market areas where insurance companies currently lack opportunities.
WARNING: Opportunities ahead
At Majesco we do not use the word opportunity lightly. If change provides opportunities, insurance companies are currently staring at a sea of real opportunities. Let's look at the changes that are most prominent.
Millennials' life journeys have not followed a traditional path, largely due to the severe economic stress during the Great Depression of 2007-2009 when they entered the workforce. Since then, many have gained a firm foothold in their life journey, with a growing majority owning their homes and having children. Nevertheless, high percentages of Gen Z and Millennials are single (42%) and not married but with partners (11%), reflecting a significant lifestyle change from older generations, which also reflects different insurance needs seen in Figure 1.
Figure 1 : Characteristics of the Life Stage of Today's Insurance Customers
Over the next three years, Gen Z and Millennials will surpass Gen X and Boomers in terms of lifestyle changes in all aspects, including twice the average interest rate in the Home and Work categories, as shown in Figure 2 Each of these aspects is further evaluated in detail in the report over the 7-year period.
Figure 2: Expected changes in life expectancy over the next 3 years
Each area that directly affects the need for and use of insurance growth. The only question is whether the insurance companies are prepared to take advantage of that growth. In many cases, growth will not be through traditional sales methods or even through traditional products. Digital plays a HUGE role in their expectations. And a holistic lifestyle and desire for convenience will drive insurance companies to digitize and renew their channel and ecosystem partners to place their products at life events and major major purchases.
COVID-19 accelerates market change by making Top-of-Mind insurance  An interconnected aspect of the insurance's potential growth and change is a new protective mindset. A crucial factor that affects all generations is covid-19 and customers' views on insurance. Almost half of Gen Z & Millennials and 40% of Gen X & Boomers in this year's research felt that insurance has become more important due to the pandemic. (See Figure 3.)
Figure 3: COVID's impact on the importance of insurance
Is the "covid effect" a fad? Possible, but unlikely. Even if covid were to evaporate overnight, general uncertainty about new weather patterns, social and political concerns and real estate investments mean that insurance companies must react quickly with new or modified products, value-added services and customer experiences that meet rapidly changing customer needs and expectations. The work and home trends accelerated by covid have been around long enough to have made a lasting impression on both the economy and consumer sentiment.
Opportunities in the Widening World of Work
By 2020, 42% of Americans worked from home, almost double as much as 2019. [i] Gen Z & Millennials reflected higher frequencies of gig work as both independent contractors and carpoolers in 2021, which probably reflected job losses, resignation from jobs and looking for new job alternatives. (See Figure 4.) This means that the geographical spread of the "workplace" is now wider than ever before. This segment envisages a steady continuation of independent entrepreneurial work, but a reduction in carpooling back to the pre- and early COVID-19 levels as their employment and personal financial situation stabilizes.
Figure 4: Gig Economy work trends
True to this generation, Gen Z & Millennials expect to have different jobs (45%) and work remotely (40%), and continue the transient aspects of this generation that will place new demands on employee benefits to be flexible and portable. Nearly 25% state that they will start a new business, indicating an opportunity for insurance companies to develop relationships with employees directly to retain them as customers when their lifestyle changes.
These changes reflect growing opportunities for insurance companies to cover the needs of changing employees and employers. From on-demand benefits for gigs / independent entrepreneurship to working from home – the needs of employees and employers are changing dramatically. Innovative alternatives such as Nationwide & # 39 ;s Work From Home Insurance, which combines home / tenant, use-based car and theft insurance [ii] are an example at the forefront of this change.
Figure 5: Expected changes in work in the next 3 years  Opportunities in the financial sphere
Gen Z & Millennials has consistently lagged behind the older generation in banking and investment by an average of 10% to 15%. This offers an excellent opportunity to engage them now to address a broader approach to economic well-being by developing a partner ecosystem that brings together other financial offerings and value-added services. Insurers can take advantage of Gen Z & Millennial's high levels of interest in both planning (money management, financial planning, debt management) and financial loss prevention and recovery services (identity theft insurance, credit monitoring) as the first focus areas for partnerships (Figure 6).
Although Gen X and Boomers do not feel the same need for planning tools or services, they are still interested in preventing and recovering financial losses to protect their financial assets when they enter or retire.
Figure 6: Interest in value-added services for financial well-being
Product placement: An opportunity for ecosystem and partnership development
For every occasion, however, insurance companies must find the best way into the market. Majesco's research on digital shopping trends highlights the need to not only be online, but to think innovatively about online positioning with partnerships in areas where people are already shopping.
The past year has accelerated the use of digital and online options in all industries. . The effect is significant with 66% of Gen Z and Millennials and 54% of Gen X and Boomers changing views on the importance of digital and online features due to covid as seen in Figure 7. McKinsey research found that online purchases increased by 30% since the beginning of covid and has remained at this level. [iii]
Figure 7: Covid's impact on the importance of digital opportunities
And expectations continue to increase for digital and online. Both generational groups expect to shop and shop more online, surpass in-store or personal shopping by 10%. Again, positioning is best where life happens. Carvana, for example, offers both door insurance and mechanical protection "at the point of sale" for all cars in its warehouse. Are insurance companies prepared with the technology and digital connections that will help them fill the growing gaps in online placement?
Digging the market
Just as Bitcoin was an industry that would be "broken", consumer and business trends are also filled with value for those who read the research. The vitality of the insurance industry is closely linked to demographic trends, market trends, customer expectations and the introduction of new technology. If we lose touch with our customers, both current and future, we lose business.
Do not miss! You can access Majesco's latest mine of valuable consumer information by downloading our upcoming 2021 Consumer Survey Report. For a valuable preview of report data, be sure to check out our latest webinar, Your Insurance Customers: A Crystal Ball of Big Changes in a Small Window of Time.
[i] "American Time Use Survey Summary," US Bureau of Labor Statistics, July 22 2021, https://www.bls.gov/news.release/atus.nr0.htm [ii] "Do you work from home? A new insurance package is built for you and can save money!" Nationwide Newsroom, June 24, 2021, https://news.nationwide.com/working-from-home-insurance-bundle-is-built-for-you/ [iii] Charm, Tamara, et al., " Sentiment and Behavior of American Consumers During the Coronavirus Crisis, "McKinsey & Company, October 2021, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-us-consumer-sentiment -under- coronavirus crisis