The commercial insurance market is undergoing a shift as millennial consumers become the dominant force. These consumers have grown up with the internet and have unique attitudes towards life, work, and insurance. Millennial insurance consumers value authenticity and personalization in their relationships with carriers, and seek comprehensive coverage at a good price while also understanding the coverage they are purchasing.
To effectively serve this market, carriers must be prepared to change and innovate in the areas of user experience, coverage customization, payment options, and policy transparency. Failure to meet their evolving expectations could lead to a loss of business among this important demographic.
Understanding the Millennial Insurance Consumer
Millennials are the fastest-growing segment of small business owners, launching businesses at an average age of 27 and at nearly twice the rate of the previous generation.
The buying power of millennial-owned companies already exceeds $150 billion, with more than 6 million Millennial households earning over $100,000 annually.
As digital natives, millennials have faced economic upheaval, including the dot-com bubble, the global financial crisis, and the pandemic's economic turbulence. They are also highly concerned about climate change and have taken action through rallies, contacting elected officials, volunteering, or donating money.
These influences have resulted in millennial insurance consumers seeking authentic and personalized relationships with insurance providers. They value a thorough understanding of their insurance policy before making decisions and have little patience for vague or complex policy language and pricing structures.
The millennial generation's values and preferences are already reshaping industries, having been blamed for destroying societal icons such as network television and department stores. Their impact promises to continue over their lifetimes.
How Carriers Can Meet the Demands of the Millennial Commercial Buyer
Millennial insurance consumer purchasing factors, focus on obtaining comprehensive coverage at a good price and understanding the coverage.
Customized Policies and Coverage Options
Millennials are a generation that craves immediate gratification and actively seeks out options. To illustrate, nearly half of millennial policyholders are willing to provide insurance companies access to their personal data in exchange for personalized products and services. Furthermore, an overwhelming 87% of them would be willing to share personal information to receive reduced premiums.
To capture the attention of this market, insurance carriers must provide flexible coverage options that can be tailored to individual preferences in as many ways as possible. Millennials are likely to reject "one-size-fits-all" policies and desire the ability to choose their policy limits, coverage details, deductible amounts, and more. By allowing them to have greater control over their coverage, they can feel confident that they are getting precisely what they want and are only paying for what they need.
Seamless User Experience Supported by Technology
Prior to 2019, having a digitally enabled purchasing and account management process was considered a unique selling point for carriers. However, nowadays, millennials demand a seamless and technologically advanced experience and are less willing to consider options that don't provide it.
To meet the expectations of the millennial insurance consumer, carriers need to offer digitally enabled experiences that allow customers to access policy information and digital communications at their convenience. Failure to provide these tools could lead to a loss of business.
Flexible Billing and Payment Options
More than any generation before them, Millennials not only want but expect to be able to choose payment frequency, payment methods, and how they are billed. A 2021 survey revealed 21% of millennial insurance consumers switched carriers to obtain better payment methods and expanded digital options.
For millennials to gain a level of trust that creates security around the purchasing experience, carriers can offer tier-based installment payment options. For example, Geico has multiple payment arrangements aside from pay in full. Customers are able to choose to break their payments down into installments of four, six, or nine payments across the life span of their policy.
By integrating more robust payment structures, carriers can show millennial consumers that they understand how economic changes impact them personally and are taking steps towards making insurance more accessible.
Policy and Pricing Transparency
Policy and pricing transparency is a hot topic, especially in the health insurance market, but their importance to millennials extends to all coverage types. Remember that Millennials seek relationships that feel authentic and personalized. Transparency is essential to meet their need to understand and feel comfortable with what they’re getting and what they’re paying for it.
Conclusion: Millennial Insurance Consumers Want a More Seamless Customer Experience
In conclusion, the millennial insurance consumers are driving significant changes in the commercial insurance market. To effectively serve this market, carriers must be prepared to deliver a tech-savvy user experience that emphasizes customization, flexibility, and transparency. Failing to adapt to the evolving needs of this important demographic could result in a significant loss of market share.