This past year, I had to buy home insurance, and I wasn’t the only millennial in the market. There are approximately 73 million millennials in the U.S. Of that number, 80% own a car, 45% own a house, and an additional 78% plan to buy a house in the next nine years. That’s a lot of insurance policies that need to be purchased, and a lot of opportunity for those selling insurance to millennials. A report from Agent for the Future, “Understanding Millennial Insurance Consumers,” breaks down some of the insurance buying habits of millennials that can help you break through the noise of the numerous insurance providers and reach this large audience where they want to be reached and with a message that resonates.
When Selling Insurance to Millennials Remember They Aren’t Solely Focused on Price
Millennials tend to be tight-fisted with our money, so it may be jarring to learn that millennials don’t consider price to be their number one factor in choosing insurance. We’re focused on getting the most comprehensive coverage for the cost. Here’s why:
For a long time, millennials were hesitant to make large purchases like a home or car. Not only were our finances not strong enough to support such high monthly payments, but we have a keen understanding of how quickly one natural disaster or life event can lead to financial ruin after coming-to-age during an economic recession. Now that millennials are a bit older and more financially secure, home and auto ownership are going up, but fear of the future remains high.
According to the survey, 38% of millennials are constantly worried about future risks (compared to 12% of boomers), which results in a willingness to pay more in order to feel protected and secure. Yes, price is important, but adequate coverage is more so. When selling insurance to millennials, don’t assume that just because they don’t want to spend money on insurance, they won’t.
How to Connect: Millennials Want a Personal Touch
Unsurprisingly, millennials are more likely than older generations to buy insurance online, but what might be slightly more surprising is that half of millennials bought insurance through an exclusive or independent agent. These two trends are not mutually exclusive; in fact, they tend to go together.
Millennials are found to want a personal connection through an insurance provider; someone that will be with them through the life of their policy who they feel comfortable reaching out to with questions and claims. But they’d rather not do it face-to-face or on the phone. Instead, millennials are using digital channels like website chat features, contact forms, and social media to initiate communications and get more information.
If a solid relationship can be formed, the battle is half over—millennials are twice more likely than older generations to let someone who’s better informed make decisions for them. Prime example: me. I must have done hours of research and called dozens of insurance companies looking for the right policy for me. And in the end, I ended up going with whomever my insurance broker told me would be the best fit for me. Truth is, millennials value the input of an expert advisor, and put more stock in having a personal relationship than they do in going with a well-known insurance provider.
It’s crucial to have digital channels available to establish those relationships early on and cultivating them will be key in gaining millennial policy holders.
Where to Focus: Education is Key for Millennials
It’s not enough to simply be an insurance provider, you must be an insurance educator. 80% of millennials surveyed in the Agent for the Future report wanted an insurance agent to help them understand the ins and outs of their company’s products. When selling insurance to millennials, you must be able to help them understand:
- What the coverage is and how it works
- What to expect if they have a claim
- What are the unique features of their policy
- How to best manage their policy online
- What additional products/services are relevant to them
- What are some safety and loss prevention tips and tricks
Having a seasoned agent at the ready to answer these questions, a helpful layman’s terms Q&A section on your website, or even a mailer with some bullet points will go a long way in creating satisfied millennial policy holders. It’s also good to note here that the truth goes further than a promise. Don’t beat around the bush when it comes to what you cover and what you don’t. Should you be vague and a millennial suffers the consequence of not having a coverage they thought was included, there will be no chance in salvaging the relationship, and you can bet that they will tell everyone and their mother just how shady your company was.
Growing up digital-savvy and the surge of insurtech startups and direct-to-consumer insurance carriers make online insurance buying an easy option for millennials. However, if millennials are anything, they are cautious; the deer of the generational forest that need to be gently coaxed into feeling safe enough to stay around. Focusing your marketing budget on forging relationships and building up a millennial’s sense of control through education will result in higher policy sales with this generation. And if you have any questions on how you can best use these insights to sell insurance to millennials, feel free to contact us today.