The following is an editorial by Alicja Grzadkowska, senior news editor at Insurance Business. To reach out to Alicja, email her at firstname.lastname@example.org.
Young people can sometimes seem like a mystery to people from older generations (and vice versa), but it’s no secret that they have a not-insignificant amount of spending power.
An oft-cited Accenture study from 2013 predicted that millennials would “truly come into their own” in 2020, with projected spending from this group expected to grow to US$1.4 trillion annually, representing 30% of total retail sales in the US, though the report also noted that millennials will have a major economic impact in other markets that Accenture surveyed. Meanwhile, Generation Zs are following closely on the heels of millennials, with some studies pointing to an overall spending power of US$143 billion in the United States alone.
While these number are tempered by the fact that younger people are reportedly taking fewer trips to the store than the average shopper, amid dealing with uncertainties brought by climate change, growing debt levels, and political instability, these demographic groups clearly make up an important segment of insurance-buying clientele.
Insurance associations are helping agents and brokers reach these consumers, with many putting on education sessions and events about selling insurance to millennials in particular. One noted that while the baby boomer generation is still a sweet spot for agents and brokers, ignoring a segment that is shifting the digital expectations of consumers would be a missed opportunity.
So how do millennial consumers differ from other generations, besides the fact that they’re digitally-savvy? For one, they’re not as responsive to traditional marketing techniques – think radio, print, and TV ads – and they tend to comparison-shop since they have a lower median income and less disposable income than past generations, according to Forbes. They also prefer to spend their hard-earned money at local businesses with ethical mindsets, which bodes well for brokers and agents who have built strong connections within their communities. Gen Zs are similar to millennials on many of these points, though they are more apt to use the sharing economy rather than owning their own physical assets and they tend to rely on social media platforms to receive information.
With all of the sessions offered by broker and agent associations on the topic of selling to young people, there appears to be some concern among insurance professionals around reaching these up-and-coming generations. However, though their insurance needs might be unique in some respects compared to older generations, are they really so hard to reach? People require different types of insurance at different stages of their lives, but many young people still plan to own cars and homes. In fact, a recent Bloomberg story read, “Data show millennials aren’t really less interested in owning vehicles than previous generations.”
Some will, down the road, also potentially own their own businesses, meaning that commercial insurance would appear on their radar, too. Many will get married (exposing them to liquor liability coverage), rent apartments (which means getting rental insurance), bring pets into their homes (in turn looking into pet insurance), or take trips around the world (and purchasing travel insurance to accompany them).
At all of these critical moments, there are opportunities for brokers and agents to prove their value. But, they need to meet these consumers where they shop, which is on websites, blogs, and social media channels. Brokers and agents would also do well to underscore the value of their independence from insurers as a ‘comparison-shopping’ method that these younger consumers can rely on to find the best coverage for the right price. Providing young people important information on their policies and what’s covered versus what’s not in easily digestible resources that they can access anywhere from their phones is likewise a good way to stand out. And bringing young people into the office by attracting new talent to brokerages and agencies isn’t a bad way to get a fresh perspective on reaching exactly this demographic.
The rewards for getting this young clientele in the door today are big. By attracting millennials and Gen Zs to the broker and agent channel while they’re young, insurance professionals can win the trust of a new generation of clients, ensuring their businesses’ long-term viability.