The way the whole world conducts business has changed in light of technology, software, smartphones, and a global economy. However, along with the changes due to operational processes, equipment, and regulations, the perspective of both employee and consumer has been evolving. The millennial generation is replacing the baby boomers, with the year 2019 being hailed as the year of the millennial. At this point in time, the millennials are officially the largest people population in the United States. As they will be making the bulk of consumer purchases, companies are now figuring out how to accommodate what the millennials are demanding in both products and service delivery. This is true from areas like fast food to health insurance and the work of insurance.
A New Perspective
The whole industry of insurance is having to reevaluate how things need to change in order to be more attractive to millennial buyers. There are three key areas of disconnect with these consumers: they aren’t engaged, they still rely on family ties, and they spend the bulk of their time in online purchases.
1. Disengagement with Insurers
No matter what industry you consider, an engaged generation tends to consider items and make purchases based on loyalty and tradition. The price isn’t a primary concern, especially with those who had used the same services for years. Older generations prefer to provide repeat-business, loyalty, and referrals to their service providers, regardless of how services or opportunities might have changed in the last decade. For insurance companies, these consumer traits are desirable and profitable. However, the millennial generation approaches their providers, especially insurance, much differently. Millennials are disengaged, looking more critically at price, promotions, incentives, and long-term benefits. The consumerism of their generation makes it more difficult to stand out as a key provider, which requires insurance companies to be more out of the box with their advertising plans. They also must rely more heavily on favorable recommendations through mediums like social media.
2. Online Policy Purchases
The latest polls are showing the higher likelihood of online shopping in millennials in comparison to older, more traditional generations. This is a trend that isn’t going to go away, and unless you have adopted this mentality like those working with SE2, your company isn’t going to survive. The SE2 business model specifically targets what millennials are looking for, and are used to, when it comes to being considered a trustworthy source for a product. This starts from the moment the individual visits a website or notices an online presence.
The millennial generation is extremely critical of their online experiences, which means an insurance company has to focus on offering a user experience that cracks the code of satisfaction. By creating an online presence tailored to millennials, there is hope that the relationships with the individuals will develop into the loyalty insurance companies need to be profitable. However, there is a problem with online insurance purchases. Millennials as a group are least satisfied with their online experiences. This means insurance agencies have to improve the user experience to keep millennials engaged. By taking these steps, insurance agencies can build better relationships with the millennial generation.
3. Family Ties Reliance
Although this loyalty to a provider based on their family history or recommendation is a good thing, for new companies looking to get a corner of the insurance market, it can be a death sentence. Young people can typically stay on a parent’s insurance plan until their mid-twenties, which makes it easier for them to simply switch a policy into their own name rather than hunt a new company. For those companies who provide coverage for an individual’s parent, the jump to securing the millennials isn’t that difficult. It is much harder for those looking to snatch loyal customers away and start their own agency.
These three areas have much to do with the future of the insurance agency. A company desiring longevity will need to prepare for the demands of the millennial.
