After the Pandemic: A Millennial Perspective Chris Mason, Senior Marketing Associate | Jun 02, 2020

Insurance Worldwide

People and industries everywhere are bracing for the impact of COVID-19 but are uncertain what the total fallout will be. Each generation will experience the pain differently, but for millennials (those born between 1982 and 1996), it will be particularly interesting.

As we’ve discussed in previous posts, millennials have a complicated relationship with insurance, and the pandemic may shift that yet again. As Instec’s resident millennial expert, I’ll take look at how COVID-19 will impact millennial attitudes toward travel, work, and entertainment, and how those changes might open up new opportunities for insurers.

Millennials Among the First to Fly Again

The travel and hospitality industries were hit hard by COVID-19. When the rebound comes, they could be remarkably different. Businesses will opt for the safety and relatively low cost of web meetings, rather than risking unnecessary travel. And while business travelers account for only 12 percent of all airline passengers, they generate as much as 75 percent of the profits. Leisure travel, too, may be depressed, at least until a vaccine is available. Meanwhile, some airlines and hotels may not survive, further reducing the insurable risks in these industries.

Millennials could provide the boost these sectors need to ease back into recovery. This generation has a particular affinity for travel and new experiences. Thirty-eight percent of millennials travel for work, and they are more likely to choose a job because of the opportunity to travel. Millennials also account for an average of 5.6 trips per year, compared to 4.4 for Gen Z, 4.0 for Gen X, and 3.5 for Boomers.

While millennials might lead the way when business travel resumes, they will likely be taking fewer trips. Instead, they may turn to leisure travel to satisfy their wanderlust. As travel restrictions ease, and with a lower risk of complications from COVID-19, young travelers could be the first to fill airline seats and hotel rooms. And the good news for insurers: millennials are more likely than their generational counterparts to buy travel insurance: 49% compared to 36% for Gen X and 31% for boomers.

The New Home Office: Your Home

The pandemic has given the term “home office” a whole new meaning. No longer the shiny, corporate headquarters, “the home office” is now “my home office”. And that suits millennials just fine. For a generation that grew up socializing and gaming online, working and collaborating from home comes naturally.

Businesses, too, recognize the advantages of work-from-home. The potential cost savings from a reduced office footprint could be enormous. Nationwide Insurance, for example, announced its decision to shut down all but four of its offices. And businesses in many other sectors are likely to follow suit.

Although insurers will certainly feel the impact of this shift, the news is not all bad. While the shuttering of offices will reduce demand for commercial property insurance, new opportunities will open up.

As the blending of personal and business use of homes becomes more common, risk transfer could shift to a new type of policy, perhaps like the “mixed-use” policies that cover Uber or Lyft drivers. And for millennials, a new type of renters policy might be the answer, as millennials are much less likely to be homeowners than their peers in prior generations.

The increase in home meetings and the use of personal devices in the workplace will require a bigger emphasis on cyber liability, too. This problem is not exclusive to millennials, and the insurance industry has an opportunity to mitigate the risk of data breaches or network downtime for all home-based workers.

Are You Not Entertained?

Live events provide millennials with a chance to blow off steam and have been a major driver of tourism revenue. Music festivals are just one example, with 54% of millennials attending at least one in the past 12 months. Like other events that draw large crowds, many have already been canceled. Coachella, Bonnaroo, and several of the other big festivals in the US have been rescheduled for the fall, but uncertainty still looms.

And music festivals are just the tip of the iceberg. The future of sporting events, theater productions, parades, weddings, and even tradeshows like InsurTech Connect are all in question, as is the need for the insurance to cover them. And for event sponsors, like Wimbledon, whose policies covered epidemics, substantial claims are now being paid.

When these events resume, will people be willing to travel and attend again? Will they even have that option? Some sports leagues have announced plans to play in an empty stadium, and many concerts are live-streaming. Millennials are accustomed to consuming live entertainment through a web browser. If this move becomes more prevalent, insurers could look to coverage for cyber risks and network downtime to replace lost location-based business.

Live entertainment may not be the only spending activity that experiences a long-term change. Restaurants and retail, for example, have switched to a takeout and delivery model to survive, and many consumers are becoming accustomed to the convenience. Millennials were already the primary audience for food delivery, and their preference for online shopping has been well documented.

Commercial property and casualty insurers may find that declining demand for physical location coverage can be replaced with an increase in coverage for commercial auto (delivery drivers) and expanded distribution centers or retail locations that convert to pick and delivery sites.

Concluding Thoughts

While the timing of a recovery is still uncertain, it’s clear the world will be different when it’s done. We’ll see shifts in travel, office space, entertainment, and other areas. Many of those changes were bound to happen eventually. The pandemic has just accelerated the process.

Leading the way will be the millennials. Shaped by two major recessions and a global pandemic, they will have a major influence on the vitality of our economy for years to come. They will be the driving force behind home purchases, new business start-ups, and online consumption. And they’ll be the source of new opportunities for growth-minded insurers that play to their needs.


Chris Mason is, by his own admission, a millennial as well as a Senior Marketing Associate for Instec. He has 5+ years of marketing experience, and a unique view of the insurance marketplace as a graduate of Marquette University in 2012.