More than the future of insurance, Millennials are the future of the global economy. According to a recent white paper from customer experience agency Cake & Arrow, "by 2019, Millennials will number 73 million, and will have taken over Baby Boomers as America's largest living generation."
However, the negative connotation behind the up and coming powerhouse generation still persists. Since Time Magazine's notorious front page titled "Millennials: The Me Me Me Generation," the stereotype of millennials being "lazy, entitled narcissists who still live with their parents" has only gotten worse.
With such a provocative title, it is no surprise that most people fail to see that the true message of Joel Stein's article was not to draw ire from the avocado toast generation, but to hail them as unique leaders, innovators, and entrepreneurs that will herald a new era for the world.
Millennials & Insurance: A Coming of Age
Quesnay's July Tech Talk, in collaboration with Cake & Arrow and sponsored by QBE, introduced Cake & Arrow’s white paper on Millennials and their findings:
Millennials can be split into four personas based on their education level and age:
Precarious Millennial - Predominantly male, this group is around 21-27 in age with no college degree. But while they are currently struggling to make ends meet, the majority agree that more education is the key to their future success.
Aspiring Millennial - Early in their careers, they are similar in age to the Precarious Millennials but they have a college degree. Their primary concerns include work-life balance, career advancement, and mental health.
Lampooned Millennial - Millennial stereotypes are based off of this persona, highly educated, more likely to be in urban areas, and further along in their careers than the other 3 personas, their top priorities are family, retirement, and career advancement—they place health and well-being above career or material success.
Forgotten Millennial - Doubtful of their ability to ever afford retirement, they are less likely to be married, own homes, or even be employed. However, they are more likely to have children and be religious. They want to be able to provide for their families while having a work-life balance.
Insurance fails to understand and connect with millennials and their needs—there is a communication gap. Only 3% of the surveyed Millennials completely understand insurance policies.
Millennials value experiences: “Life is about experiences not things.” In which case, insurers need to provide products that can provide immediate rewards (focusing on current experiences) while communicating long-term value (traditional use-case for insurance policies).
Millennials still share the same traditional values as the older generations. But their life milestones are delayed. For insurers, this means that millennials will take a longer time to buy home insurance for their first house, life insurance for their first child, etc. due to a lack of financial planning.
Our esteemed panel of insurance executives offered valuable insights towards the transformation of the industry within the context of the points raised by Cake & Arrow.
Leadership from Jetty, Liberty Mutual, Nassau Re, QBE, and Travelers suggested that trends point to customization of policies. Ted Stuckey, Managing Director of QBE Ventures, confirmed that "Insurance has to be sold at the point of need," and that strategic partnerships, rather than blanket marketing, are necessary to sell policies to millennials. This shift towards understanding when and where Millennials need insurance, will allow insurers to better educate and sell policies that are both timely and useful. A big part of understanding and connecting with millennials is to realize the minute difference between the different cohorts (for example the four different personas) of millennials and avoid stereotyping. It is necessary for insurance companies to adapt to this diverse generation, and be flexible – as John Heveran, Chief Digital Enablement Officer for Liberty Mutual, added, insurers need to shift from "mass production to infinite customization."
Braden Davis, the Chief Insurance Officer at Jetty, emphasized the importance of speaking the same language as millennials. Contrary to the stereotypes, millennials are eager to learn about insurance and understand the importance of it. Beyond just using the same language, it is also beneficial to leverage pricing structures that are familiar to Millennials, which will aid in education efforts. To this point, Paul Tyler, Chief Marketing Officer of Nassau Re, suggested that insurance companies need to consider marketing insurance products with a similar price structure to popular subscription services like Netflix, something that millennials understand and can actually afford. Once insurers bridge this understanding gap, and are able to empathize with the different millennial personas, they will see that industry trends, as Emily Grant, VP of Strategic Initiatives at Travelers puts it, are “moving away from insuring material possessions and towards insuring experiences.”
Quesnay’s Female Founders in InsurTech program is surfacing innovative solutions that address many of these issues. Through the innovation competition format and strategic partnerships, incumbent corporations will be able to leverage best practices from the very startups that are looking to disrupt the industry. After all, entrepreneurship is not a zero-sum game, when we all work together, everyone wins – especially the misunderstood millennials.