The insurance industry is moving from traditional policies to digital marketing and superior customer service
There was a time that an advertisement telling a great story was the key to compelling a consumer to become an active buyer. Not anymore. As Andrew Solmssen, Managing Director of global marketing agency POSSIBLE, said, “We need to move from storytelling to storydoing. To engage millennials, you must show, not tell.”
The Millennials – and there are about 73 million of them in the US today – are a major economic opportunity. And they pose a challenge to most aspects of regular social and economic life because of their significant deviation from earlier generations by being digital natives who grew up with the Internet and smartphones.
Into their late teens and early twenties, millennials compelled industries like entertainment and cosmetics, to make significant changes in their marketing strategies to adapt to their emerging new tech-driven needs. Now, as the oldest millennials reach their late 30s, they are entering an age segment that matters to all insurance industries, including affordable renters insurance. It is now the turn of insurance to adjust its strategies to attract millennials, who appear to consistently show heavy brand loyalty.
Major insurance carriers adjusted their strategies early on, by launching mobile apps and Smart Speakers like Alexa apps. They were trying to attract the attention of Millennials by appealing to their connection with smartphones and tablets.
In trying to keep their numbers of policyholders from falling, insurance companies have to understand the kind of family outlook millennials have. Gallup finds that fewer young millennial adults are getting married. Studies reveal that first marriage age today for women is 27 and for men is 29, a significant increase from 20 for women and 23 for men in 1960. With the percentage of single or never married people on the rise, insurance is having to change the images it projects in selling policies. For instance, the traditional home and family portrayal will doubtless make insurance out of sync with millennial thinking, as it would be to assume that owning a car is a millennial priority.
Insurance companies are finding out that many millennials are rejecting buying a car or driving. A generation ago, this marked the rite of passage. But millennials prefer to avoid the hassle and expense of maintaining a car and the harassment of driving on congested roads. They would rather use mobility services like Uber and Lyft, and when going out with friends in the evening, use ridesharing services 70% of the time. This has led insurance companies to offer products like rideshare insurance, for individuals who choose to reduce the cost of owning a car by transporting passengers in their personal vehicle. There is also bike insurance and pay-as-you go car coverage to net in different millennial needs.
Insurance companies have come to realize that while most millennials have delayed buying houses due to the challenge of repaying student loans, there is a good percentage renting houses. With this trend, renter’s insurance has seen a rise in recent years. Renters’ insurance expert, Brian Richards, believes the rise in demand for renters’ insurance is due to declining homeownership with delayed marriage, increase in college enrollment and shift in labor force participation. Insurance companies are pursing the argument that reduction in buying houses does not automatically mean a decline in demand for insuring the content of houses. Thus, insurance companies see diverse opportunities in renter’s insurance policies.
The insurance industry, worth over $1.2 trillion dollars is undeniably one of the most lucrative businesses in the world. However, dealing with the millennial generation is posing a lot of challenges.
There are insurance companies that stubbornly go with the popular strategies of an age gone by, such as telemarking, and direct mail to potential customers. They hope these methods will yield results at some point, failing to see them as gestures that leave millennials cold. On the other hand, there are smart companies who have correctly analyzed the millennial psyche and have begun marketing not products, but lifestyles.
For instance, millennials value experience more than material things. They want to travel and see the world and be able to use products without the hassle of ownership. Thus, the insurance industry is gradually coming to terms it has to provide, not tried and tested products like homeowners’ and auto insurance, but the kind of insurance policy that will appeal to the tech-savvy current generation.
As they search for what appeals to millennials, insurance companies have to take into account that millennials are twice as likely or more, to buy insurance policies online, than earlier generations. It should not come as a surprise, as the average millennial spends about 18 hours a day on some kind of digital media. They believe in doing extensive research on products and prices, comparing value for money, while engaging social media friends to discuss their experiences with the products.Social media expert Scott Cook says, ““A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is.”
What is more, even as millennials expect customized products, they will accept nothing less than exceptional customer service. Thus, the insurance industry has to grapple with the challenge of thriving in a most unconventional industry landscape with the millennials. Delighting the customer has taken the insurance industry to another level, as with most other industries. For once millennials realize they are valued for what they stand, brand loyalty could not be stronger.
As social media expert Crystal Kadakia said, “We thrive when we are pulled by the future, not pushed by the past.”
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