The newest and growing population today are the millennials, and they don’t know much about insurance and its importance. Recent purchasing patterns for insurance by millennials reflect that fact. Only 64% of millennials have car insurance, 10% have homeowners insurance and 13% have renters insurance, according to a survey conducted by the Princeton Survey Research Associates International.
The 10% of millennials that have purchased homeowners insurance are growing increasingly critical of their policies and insurance carriers, more so than older generations, according to a report released by J.D. Power.
A part of this is due to the millennials generally distrust big companies, and unlike older generations, they know when they’re being advertised to. As a result, they are more likely not to buy the product being pitched – especially so blatantly. Millennials are a generation that doesn’t like being advertised to. They view advertising as an invasion of their time and their life (commercials on the television and ads all over websites nowadays). Millennials want to discover things themselves, find answers to solutions and prefer to research many products and reviews before a purchase. However, their knowledge in the insurance industry is lacking.
According to Pew Research Center, millennials may be the most educated generation in American history but they tend to know very little about the insurance industry, how it operates, and even the basics of costs and policies. As a result, this is a new problem for insurance companies.
The key to a solution is that companies (all, not just insurance) need to be more “technovative” because millennials value transparency and technology. Insurance companies will have an advantage with websites that are easy to navigate and if they’re more transparent about underwriting policies and rules. If the insurance policy can be accessed via mobiles, the better. Millennials value information and are more willing to purchase something the more informed they are about the product and are willing to learn from experts and influencers.
There are broader economic issues in the air though. What the world doesn’t know is WHEN millennials will make the shift in purchasing more insurance. It’s not just if they reach a certain age or not. This generation is more likely to stay home after college and are more likely to get married later in life. They are also the largest generation with debt and more likely to think about paying that off while worrying about savings, retirement, and starting a family later. This socio-economic shift has delayed millennials from thinking about their insurance needs besides the basics.
According to a NexGen study conducted by Price Waterhouse Coopers (PWC), this doesn’t mean that millennials are less productive but instead actually more focused. They favor life-work balance and desire more independence at their jobs. This group tends to lean more on urban living, where cars are less needed and renting is more common, pushing the insurance burden on car-share companies like Zipcar and Uber or Lyft. This will cause a shift in the insurance automobile industry on how to insure new products and programs as well.
If you’re an insurance company looking to innovate and upgrade your software, give us a call. At DRC, we’re all about customizing dynamic policy administration systems, services, and solutions tailored to your specific business demands and needs. Our team of technology experts are ready to provide you with more information to discover firsthand – how GameChanger’s flexible, adaptable, scalable technology will help you gain the competitive edge you’ve been looking for with a customized demo.
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