Insurance companies are struggling when it comes to engaging younger Americans.
According to a recent Gallup poll, millennials—those born in 1980 to 1996—are the least likely to be fully engaged and the most likely to be actively disengaged with their primary insurer. As millennials are currently the largest generation in the US, and as engaged customers are less sensitive about pricing changes, analysts find the trends concerning.
Nearly 30% of millennials are “actively disengaged” with their insurance company, with 42% “indifferent” and 31% “fully engaged.” That compares to 34% full engagement from Generation X and the Baby Boomer population and 41% full engagement from those born in 1945 or earlier.
All of that means younger consumers are the least likely to be loyal to any one insurer.
Gallup also uncovered several unique traits of millennials shopping habits, however, that may prove useful to insurance companies and their agents.
“Millennials are significantly more likely than other generations to have insurance coverage under a family member who chose the company,” said Gallup. “When their family members value an insurance company’s brand, millennials will follow suit.”
This stands in sharp contrast to the Generation X and Baby Boomer populations, who tend to select insurers based on cost and company reputation. By building brand loyalty with these groups, then, insurance companies are more likely to reach millennials.
Another important factor is online engagement. Millennials are more than twice as likely to purchase insurance policies online, but they are also the least satisfied of any generation with the online experience provided by insurers.
“For insurance company leaders, this means improving interactions with customers online is a smart investment toward building strong relationships within this future mainstream customer base.”
However, those in the industry say insurers and agents should not be so quick to assume all millennials want to purchase all policies online. A similar survey conducted by
Applied Systems reports that while 35% of millennial customers completed their auto insurance purchase online, another 37% bought the policy in person with an agent.
“The myth says that [millennials] want to do everything online always—that’s just not true,” said Michael Howe, senior vice president of product management with Applied Systems. “They definitely want to talk to a human, it’s just that they also have a strong preference for different platforms at different points in the shopping and purchasing cycle.”
John Tiene, CEO of
Agency Network Exchange, also points out that millennials’ shopping habits will probably shift toward more traditional channels as they age and their insurance needs become more complex.
“As people mature, they have a different set of concerns and issues to deal with,” Tiene said. “Because they now have a house as well as a car, and children with risks of their own, we find they move back to the independent channel. The internet can only take you so far.”
