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3 Reasons to Be Optimistic About the Millennial Market

In insurance, the perception persists that the millennial market is a tough one to crack. Here are three reasons why independent agents should be much more optimistic.
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The U.S. is currently home to roughly 73 million millennials, according to the Pew Research Center. That means that millennials—those born between 1981 and 1997—will make up the largest consumer segment for years to come.

Yet, in insurance, the perception persists that the millennial market is a tough one to crack. Various notions cast a cloud over this segment of the market, such as the idea that millennials don’t have the buying power, don’t value insurance and are unlikely to utilize the independent agent channel—especially for self-described “old fashioned agencies.”

However, recent research from Liberty Mutual and Safeco® tells a different story. When it comes to millennials, “the outlook for independent agents is really strong and our research shows that there is a significant opportunity,” says Tyler Asher, president of Independent Agent Distribution at Liberty Mutual Business Lines and Safeco Insurance.

“This is a demographic that will continue to dominate the market segment for the next few decades and is just now entering their peak earning years,” Asher continues. “We believe independent agents will win in this market because they have a competitive advantage that speaks really well to the millennial consumer segment—ease of doing business, choice in terms of breadth of offerings, and custom-tailored advice.”

Here are three reasons why independent agents should be optimistic about the millennial market:

1) Millennials are not more price-focused than other generations. Only 31% of millennials want the lowest-priced coverage, compared to 29% of Gen-X and 18% of baby boomers, according to Liberty Mutual and Safeco’s Understanding Millennial Insurance Consumers study.

“Price is a purchasing factor for consumers of all age groups. Millennials don’t really stand out as more price-sensitive than older generations,” Asher says. “In fact, we saw over half are looking for the most comprehensive coverage at a good price.”

One reason millennials are not as price-conscious as you’d think is because members of this generation are more worried about future risks than boomers. As many as 38% say they constantly worry about what-if scenarios, versus just 12% of boomers, according to the research.

These fears represent “a really big opportunity for agents in the sales process to listen to these concerns and walk them through policy options,” Asher says. “Using what-if scenarios and claims examples from past clients will really demonstrate expertise and the value of coverage.”

2)  Millennials want a seasoned insurance professional. Millennials are looking for someone older and wiser to guide them through insurance decisions, according to the research. Almost half of millennials say they want to work with a seasoned insurance professional, while just 9% want to work with someone close to their age. Additionally, millennials also want someone who inspires trust (50%) and makes a point to get to know them (29%).

“Millennials are saying more than any other generation that they’re willing to entrust the decision-making to someone who is more informed than them, which places even more of an emphasis on the trusted adviser,” Asher says. “We think there’s a great opportunity for agents in the sales process to really connect on their concerns and wants by demonstrating the expertise they bring to the table.”

Moreover, of those who worked with agents, as many as 80% of millennials want their insurance agent to help them understand their insurance. While 52% of baby boomers describe themselves as insurance-savvy, only 34% of millennials feel that way—but more than half said they need to know all the details about their policy, Asher points out.

“Basically, they want to know what’s included in the policy, with a very high percentage saying they want to know every detail,” Asher says. “They really place value on someone who’s able to thoroughly talk them through their coverage, explain what to expect if they have a claim and explain the unique features of their policy.”

3) Tech-savvy millennials need to be able to find you online. Unsurprisingly, millennials are almost three times as likely as baby boomers to describe themselves as tech-savvy and twice as likely as boomers to buy insurance online. However, online channels are simply an avenue for millennials to connect with an insurance agent, according to the research.

When it comes to finding and choosing an agent, millennials do ask family and friends for recommendations, according to the survey, but are far more likely than previous generations to turn to the internet. More than 27% of millennials say they learned about an agent through a digital engagement, such as online search, reviews and social media, compared to 18% of Gen Xers and 12% of boomers.

Asher’s recommendation to agents, therefore, is to “make sure that they’ve got a great digital presence.” Although he notes that “millennials are still overwhelmingly purchasing locally,” they need to be able to find you online—and that means agents will need to consider investing in digital offerings like online reviews, a modern website, chat functions, an engaging social media strategy and, most importantly, ways for consumers to transition online interactions offline.

“We see a significant need for agents to really make sure they’ve got a strong digital footprint to continue to reach millennial consumers for many years,” Asher says.

Will Jones is IA assistant editor.


Tuesday, June 2, 2020
Sales & Marketing