As millennials enter their prime spending years, they’re in a position to heavily influence the economy for decades to come. Many industries will have to reinvent themselves to align with millennial preferences—and as one of the oldest and most lucrative institutions in the U.S., the insurance industry is a prime candidate for that task.
The relationship between millennials and insurance needs repair. Only 4% of Gen Y is interested in an insurance career, according to The Hartford. Simultaneously, insurance technology (InsurTech) has seen a surge of investment in recent years, with global InsurTech investment tripling in 2015.
This combination of factors sets the stage for technological disruption in the insurance industry. Here are three ways your agency can ride the tech wave instead of drowning in it.
Prove your worth. Ever since McKinsey released its infamous report with the “The End of An Era for the Local Insurance Agent” section, the industry has been abuzz about the eventual demise of independent insurance agents.
While it’s true that InsurTech is automating processes from underwriting to sales, this trend does not guarantee the complete displacement of insurance agents. Like all enterprise technologies, InsurTech generates massive amounts of data. The average consumer doesn’t know what all this data means, and although millennials are quick to self-educate, they don’t necessarily want to do extensive insurance research.
This is where an agent can add value to the consumer by serving as a guide in navigating the complex world of insurance. Independent agents are still important when it comes to helping clients weigh insurance options and providing counseling when they need to settle claims, for example.
Technology can amplify this supportive environment by enabling agents to offer additional services to customers. For example, some InsurTech software serves as a cloud-based self-service platform for clients. This is especially important when serving millennials, who have come to expect instant access to information.
Satisfy millennials. InsurTech has the potential to change customer experiences for clients. A Capgemini study found that on average, only 30% of customers had a positive experience when interacting with their insurance companies.
Meanwhile, independent agents remain the most common point of contact consumers have with their insurance, writing nearly 58% of all premiums in the property-casualty market, according to the 2016 Market Share Report from the Big “I.” This makes independent agents highly influential in the outcome of customer experiences with insurance.
Keep in mind that Gen Y is accustomed to being connected and having access to many options. As an independent agent, you already have the benefit of being able to offer policies from different companies. Insurance software can further help diversify your services.
By leveraging technology and the Internet of Things (IoT), insurance agents can offer a variety of forward-thinking policies. Consider auto insurance: Traditional coverage uses past driver history, vehicle type, and the like to calculate pricing. With IoT car services, however, insurance agents can also offer usage-based insurance, which is informed by metrics collected straight from the car via in-auto telematics. This is especially significant for millennial consumers, who typically assign high value to connectivity.
Convenience is something consumers look for, especially millennials. Insurance software can also facilitate the notoriously dreaded claims process by processing claims information quickly and providing claims tracking and reporting services for both clients and agents.
Attract young talent. Of course, one of the most profound ways to reach millennials is to have them on your team. With up to a quarter of U.S. insurance agents expected to retire by 2018, recruitment is crucial to the survival of the insurance industry.
According to a recent report from Vertafore, technology-fueled millennial professionals are finding fulfilling careers in insurance. Citing “the rapid adoption of technology in the industry,” the report found that 86% of respondents indicated that technology in the workplace is increasing and giving them the tools they need to compete. Meanwhile, two-thirds are satisfied with their own company’s use of technology, and 50% regularly use social media to perform business functions like building brand awareness, business development and customer support.
Implementing InsurTech is a sure way to attract millennial workers, who are commonly attracted to careers in technology. By integrating technology into your business, you communicate that you are a modern agency where a millennial worker can offer valuable contributions.
When it’s to choose a career path, millennials value upward mobility, among other opportunities. Because there will be plenty of spaces to fill in the insurance industry in the coming years, your agency should highlight the ample growth and leadership opportunities you have to offer young employees. Millennial employees will better engage with fellow millennial consumers, all of whom will help guide the technological transformation of your agency.
Millennials are the leaders of today and tomorrow. In order to fill the looming perpetuation gap in the insurance industry, agencies need to stay ahead of the curve, leveraging InsurTech and software to attract these young professionals and fuel their business.
Jennifer Gehrt is an author and partner at Communiqué Public Relations.