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Millennials will make up 75 percent of the global market by 2025. Insurance industry observers all recognize by now that they are without a doubt a growing force to reckon with, especially when it comes to the life insurance market. Millennials tend to delay the process of purchasing life insurance. Heavy financial burdens and deep confusion about financial planning choices are two big culprits. The result is that more and more millennial families find themselves at risk of financial collapse. With October marking Financial Planning Month, we wanted to put a spotlight on this concerning trend and explore how life insurance providers help the significantly underserved millennials market segment. The rest of this piece will explore how carriers can meet millennial families where they are by creating products and tools that engage them and connect with how they live and buy financial products today.
It is possible for the industry to meet this generation where they are?
Selling insurance through the traditional channels worked well for baby boomers in a pre-digital era, but they fall short in engaging millennial families. Millennial families are less likely to have a trusted family insurance agent or financial planner than in previous generation and are more likely to consult online resources like blogs and even social media for information regarding finance and retirement. The reasons may lie in how millennial families think about major life choices: they tend to start a family much later than previous generations have and many of them (quite simply) believe that life insurance is just for a later time in their lives.
To connect with this underserved segment, insurers must alter their strategy to take into account the preferences of this underserved and largely untapped market segment. Millennials are more comfortable with digital channels of communication and prefer simplified but tailored products. A good first step for carriers to capture the millennial market is to offer real-time quotes and an online application that is able to be completed within minutes, instead of weeks.
Millennial families also crave customized insurance plans, incorporation of fitness wearables to track health and reduce premiums and inexpensive plans that fit their budgets.
The bright spot is that millennial families do value insurance; they just simply haven’t spent too much time thinking about it. They may think the cost is too much of a burden to bear; but from an insurer’s perspective, this represents an opportunity to meet them with the right products, tools and processes that fit their lifestyles.
A Path Forward
Insurers, take note: the need to cover “Mortality” risk and “Income” risk is ever-present. Millennial families are no exception.
It may be easy to generalize millennials in terms of their purchasing, but with a profitable and viable distribution model (such as direct-to-consumer), insurers can capture this growing customer segment with the type of tools and technology that will enable them cost-effectively acquire and engage with them. The current situation spells an abundance of opportunities for insurance carriers and is an exciting time for the retirement industry as a whole.
What steps has your team taken to capture the millennial market?