How Millennials Are Changing the Insurance Industry

How millennials are changing the insurance industry

This post is part of a series sponsored by AgentSync.

In general, millennials are tech-savvy and data-driven, revolutionizing the insurance industry as both consumers and insurance professionals.

Defined as those born between 1981 and 1996 – between the ages of 40 and 25 – Millennials are the largest living generation of adults in the United States. As of July 2019, the US Census Bureau estimated the millennial population to be 72.1 million. And research shows that millennials will continue to grow. Immigration is expected to increase the size of the American millennial population to 74.9 million by 2033. That’s a lot of millennials.

It’s no surprise, then, that millennials are making waves in the world of insurance. After all, millennials make up nearly a quarter of the adult population. They are business owners, parents, drive cars, see doctors, and some even work in insurance.

For the insurance industry, millennials’ consumption options present a huge opportunity to rethink what insurance looks like and how it’s sold.

Millennials as consumers

It’s official. Millennials are in the insurance market, and they are looking for personal and business insurance policies. Everything from the way they want to buy insurance to the policies they buy differs from longstanding industry practices.

New policies for the new consumer

Well, millennials aren’t really what we’d call “new” consumers. Even the youngest millennials have been in the workforce for a few years. But they are not looking for the same old policies that insurance providers have sold for decades. No, their lifestyle choices and preferences are very different from previous generations.

Millennials tend to have more education but fewer fixed assets. As a result, they are looking for policies that meet their own needs.

For example, while 80 percent of millennials own a car, only 45 percent own a home. So while auto insurance is the most popular type of insurance among millennials, home insurance purchases are down. Additionally, many millennials who own homes don’t think they need homeowners insurance.

How millennials choose to live influences when they need insurance and what types of insurance they need. But the study of purchasing preferences also highlights areas where millennials are under-insured and provides opportunities to build education around the importance of the policies that millennials choose in general.

Build an online presence

While millennials take policy price into account when making purchasing decisions, it’s not the only thing they consider.

Millennials are often called “digital natives” using social media and websites to report their purchases. Research shows that 55 percent of millennials use search engines to learn more about products, and that they are twice as likely to purchase insurance online as baby boomers.

By building a strong online presence, insurance companies can control the conversation about new or existing insurance policies that align well with the needs of millennials.

Millennials in the insurance industry

Insurance is not what one would call a flashy industry. With more than half of life insurance agents in the United States over the age of 45 and nearly 70 percent of claims adjusters also over 45, the industry’s workforce is aging. As a result, there is about to be a serious void in the insurance talent pool.

it’s a problem. Millennials have the ability to innovate the insurance industry with new ideas about products and policies. So what can insurance companies do to lure millennials into the fold?

Attracting millennials to the insurance profession

When millennials are looking for new work, they are looking for meaning and purpose in the jobs they hold. It is true that insurance is not a traditionally glamorous industry, but it is also true that insurance greatly affects people’s lives.

92 percent of the US population had health insurance coverage for all or part of 2019. And that doesn’t even include other lines of business: auto insurance, life insurance, homeowners insurance, and so on.

Insurance affects nearly everyone in the United States, and it helps people live life without fear of how an accident or disaster might burden them financially. Living freedom is an important concept for millennials, and highlighting this influence can go a long way in attracting them to the insurance industry.

Building a cohesive workforce

Attracting a pool of millennial insurance professionals is exciting, but it’s still important to ensure that existing workers remain engaged. After all, they’re brimming with industry experience and expertise that new workers won’t have. While millennials turn to online sources when making purchasing decisions, they still rely on insurance agents for knowledge and advice.

49 percent of millennials want to work with experienced insurance professionals, and only 9 percent indicate they want to work with someone close to their age.

So, while the insurance industry needs to attract millennials to professional opportunities, it shouldn’t exclude the existing workforce.

The rise of Insurtech

With a focus on technology and innovation, millennials in the insurance industry are rethinking how insurance is bought and sold to meet the demands of today’s consumers, of whom millennials are also a part.

Within this innovation we find Insurtech – Insurance Technology – which refers to the use of technologies such as data and artificial intelligence to help insurance meet the needs of today’s digital world. This is more than just building a website or social media presence, but it really takes advantage of technology to eliminate redundant, manual, or outdated processes.

In 2020 alone, global insurtech received US$7.2 billion in funding. The insurance industry is changing, and the desire for that change is great.

The technologies emerging from this wave of innovation are a response to the preferences of millennial consumers as well as the contributions of millennials to the industry as professionals. Rethinking business processes to drive efficiency, these changes represent an exciting time for the insurance industry.

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