Soft market, increased competition, tech disruption – we’ve heard the bad news before. The good news? The next green pasture for insurers is beginning to blossom. In April of 2016 millennials surpassed baby boomers as the nation’s largest living generation at around 86 million strong.1 The first wave of millennials are already prime targets – they’re employed, managing debt well, saving correctly, and are reaching the prime purchasing age of 35.
As baby boomers retire, millennials will account for an increasing share of the workforce. Today that number stands at 30% and it’s expected to reach 75% by 20252. And this is a generation with growing influence. According to The Millennial Leadership Study, 91 percent of millennials aspire to be leaders, and they’re stepping into those roles even when they don’t feel ready.3 As decision-makers, millennials will gain the power of the corporate dollar and will have a greater say over commercial insurance purchases.
So how do insurers capture this generational that’s primed and ready to purchase?4 As we’ve covered in a previous post, millennial buying patterns are all but set in stone. That makes the strategic intersection between millennials and insurance distribution channels all that more important.
How Millennials Buy: The Information Generation
Buying practices learned through their youth will ultimately bleed into millennials’ decisions when it is time to buy insurance. At the time of a purchasing decision, millennials are “infosumers”, avid researchers who use every tool available to make the best decision on a product or brand. Growing up with Google has its perks.
Speaking from personal experience, almost every major buying decision has boiled down to research. All my purchases start with an inquiry online, generally with assistance from knowledge experts. My main sources include trusted friends who know a certain product, online research, social media reviews, or a vetted knowledge expert.
We buy socially, on the expert information given to us by others. We crowdsource reviews on social media.4 When I buy a television, for example, the only reason I would walk into Best Buy would be to talk to someone who can help me sort through all the options available, and even then, I still seek out a friend who has been through the experience before.
Selling to Millennials: Flexibility and Knowledge
Insurers who can respond to millennials’ need to be informed consumers will be well-positioned when millennials come calling. Offering diverse capabilities online, with expert advice, will also be crucial to long term success.
So, what are some steps for insurers who want to position themselves to capture business from what will be the largest buying cohort in America?
Millennials are fast becoming the most significant purchasing force our country has seen – and they’re different. The sooner you understand and act on their buying preference, the greater chance you’ll have of selling to the next big market for insurance.
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 recent graduate of Marquette University in 2012. He volunteers with the IASA, working as a Lead Producer for webinars put on by their eLearning Committee.