The insurance industry is facing a significant shift in the way insurance products are marketed due to the changing behaviors and priorities of millennials and Gen Z. According to a Gallup poll, millennials are the least engaged with insurance compared to previous generations. This lack of engagement is driven by various factors such as different family structures, living preferences, and changing priorities.
One important factor to keep in mind is that millennials tend to have coverage under a family member and remain loyal to the providers that their family members chose. This means that building strong relationships with baby boomers and Generation X can have lasting effects on this often elusive generation for insurance companies. Insurance providers must focus on important life moments and individual needs rather than centering marketing campaigns around traditional family structures and “norms”.
Millennials are renting longer and are generally slower to purchase homes due to mounting student loan debt, less job security, and later marriages. However, they still want to protect their belongings, as the number of renter’s insurance policies more than doubled to over 13 million between 2004 and 2014. As millennial home purchases pick up, insurance companies need to adjust their marketing strategies accordingly.
Contrary to popular belief, millennials are interested in buying cars, and Gen Z’s behaviors don’t seem to be too different. As these generations move into the workplace and start families, they buy cars to accommodate their changing lifestyles. Auto insurance providers will do well when they embrace that this generation is device agnostic and highly values customized options and real-time or near-real-time quotes.
According to the Life Happens survey, only 52% of millennials have life insurance. This is because millennials have bigger financial priorities than insurance, including living expenses, student loan debt, and their focus on experience over investing in permanent residences. Insurance companies need to educate millennials about the risks and implications of not having life insurance, especially since most student loan debt will not go away in the event of an untimely death.
What This Means for Marketers
As the most diverse generation in history, millennials present a challenge for insurance marketers. Changes in behavior, social dynamics, and concerns driven by debt and recent economic downturns give this generation a unique perspective on financial and risk-based decisions. Insurance marketers need to shift away from generational marketing towards a problem-solving approach that addresses the wants and needs of different generations going through similar transitions or life changes.
Finally, insurance companies need to recognize that millennials are the generation most likely to purchase insurance online. They expect that quotes, results, policies, and all things associated with insurance services must be served up quickly and online. Being the first digital-native generation means they are comfortable making financial services purchases without the personal touch previous generations desired.
The insurance industry needs to adapt to the changing behaviors and priorities of millennials and Gen Z by adjusting their marketing strategies accordingly. Insurance providers must focus on important life moments and individual needs, educate millennials about the risks and implications of not having insurance, and recognize that millennials are the generation most likely to purchase insurance online.