Over the years, MythBusters has not only provided hours of entertainment, it also debunked some of the most common myths that the world has ever seen. The educational value of this cannot be understated. It improves our understanding and changes our perception towards what the myth was and what the reality is. Millennials have been described as the most financially empowered generation in existence. They know what they want and are very vocal about what they are looking for from a consumer’s perspective.
The financial services industry is struggling to come to terms with the demands placed on them by Millennials who expect insurers to reinvent themselves and change the game. Because of this, certain insurers and intermediaries have crafted some myths that they apply to Millennials.
A recent study conducted by US insurers, Liberty Mutual Insurance and Safeco Insurance, pointed to some of the most common myths that exist when it comes to Millennials.
Setting the scene
Why is understanding Millennials suddenly so important? The report points out that according to statistics by the Pew Research Centre – as of 2019 – there are roughly 73 million Millennials in the U.S.
This means that as the populations of older generations decline, Millennials (born between 1981 and 1997) will make up the largest section of consumers for the next few decades.
As older Millennials head into their peak earning years, they are starting families, purchasing homes and making more complex buying decisions. The report points out that while many people in insurance assume that younger buyers always shop online and only care about price, the report shows otherwise.
Contrary to predictions, the rise of the digital-savvy Millennial does not spell doom for intermediaries; rather, it presents a huge opportunity.
The report found that Millennials want help understanding insurance, and most of them are open to working with intermediaries. However, competition for Millennial consumers is fierce with insurtech start-ups and direct insurers focusing much of their marketing efforts towards younger consumers.
Clear and present myths
The report goes into detail to point out some of the myths that exist about Millennial clients and the truth behind the reality:
Millennials are more likely than older generations to buy insurance online, but half of Millennials bought insurance through an intermediary;
Millennials are not more price focused than Generation Xers and Baby Boomers. They have similar priorities when purchasing insurance, such as looking for the most comprehensive coverage;
Millennials want their intermediary to be a seasoned professional who can help them understand insurance and help them become informed consumers; and
Millennials are more likely to research and connect with intermediaries through digital channels such as online reviews and social media. They still value the input of an expert adviser.
There is one myth that is true, but upon inspection, is less prevalent than previously thought. The report points out that Millennials are more likely than older generations to buy insurance online. However, fewer Millennials are making online insurance purchases than many might expect.
The report shows that 36% of US Millennials reported buying auto insurance online, and 30% bought homeowners insurance online. Meanwhile, 52% of US Millennials purchased auto insurance, and 58% bought home insurance through intermediaries.
Price is not king
The report points out that it is a common belief in the insurance world that since Millennials have fewer assets and less wealth than older generations, they look for the cheapest insurance and buy online through direct insurers.
However, the reports research shows that Millennials are not more price-sensitive than older generations. While all generations listed price as one of the key factors when purchasing insurance, Millennials gave it slightly lower weighting than Generation Xers and Baby Boomers.
The report shows that Millennials’ views of insurance line up with older generations in many ways, and they have similar priorities when purchasing insurance. More than half of Millennials care most about getting comprehensive coverage for a good price. Only 31% want the lowest price even if it means a basic policy. This is compared to 29% of Generation Xers and18% of Baby Boomers.
The future of the intermediary
Millennials have been the bane of some intermediary’s existence. Certain intermediaries have even gone as far to say that Millennials will spell the end of the intermediated model of insurance because of their propensity to be attracted to online insurance channels.
How wrong they were.
The research points out that not only will intermediaries find sustainability through Millennial clients, Millennials could provide the intermediated model of insurance a chance to grow like never before.
The report points out that while Millennials want easy access and time savings when purchasing insurance, they place just as much value as older customers on expert advice and a recommendation from someone they trust.
Further, the report points out that Millennials want to be well-informed consumers and recognize that they have a lot to learn. The report adds that over 80% of Millennials want intermediaries to help them understand insurance, talking them through their coverage, what to expect if they have a claim and the unique features of their policy.
Make hay while the sun is shining. Millennials appreciate your value. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts email@example.com.
Article published courtesy of FANews