Millennials Are In Their Prime Spending Years: What Insurers Need To Know

Millennials are now the largest generation in America. While they’ve historically deviated from life milestones and behaviors of previous generations – when (or whether) they get married, buy a home, drive a car – they’re now increasingly reaching these milestones and need insurance.

But traditional insurance industry methods of engaging with potential customers won’t resonate with this generation.

I spoke to Yamini Bhat, co-founder, and CEO of Vymo, a sales engagement platform that drives sales productivity and customer experience for some of the largest insurers in the world.

Gary Drenik: The past two and a half years have been pivotal for Millennials as the generation became the fastest growing segment of not only home and car buyers but also those considering life insurance. How does the Millennial lifestyle play into these trends?

Yamini Bhat: Millennials are vastly different from older generations, both in terms of their life journeys, financial pictures, and digital adoption. Millennials have entered their prime spending years, are having families, and are buying houses. According to the National Association of Realtors, Millennials now make up 43% of home buyers, the largest portion of any generation.

They’re looking for insurance as well. Across auto, health, homeowner’s, and life insurance, Millennials make up the largest portion of those planning to buy or switch insurance in the next six months, according to a recent Prosper Insights & Analytics Survey.

While the growth in Millennial home ownership and insurance consideration stems from lifestyle changes and external events, it’s also fueled by changes in how they can make these milestone purchases.

Consider their user experience with a shopping app. From customized product suggestions to learning from previous purchases to discounts on favorite products, websites and apps use data to deliver value and a better buying experience. Millennials expect the same from an insurer. And in return for such an experience, they are OK sharing data.

It is now up to the insurers to create these user journeys and make the process of purchasing insurance as easy, supportive, educational, and effective as any other digital service Millennials use.

Drenik: Considering these statistics, what can insurers do to best accommodate this generation that is now in its prime spending years?

Bhat: The tedious legacy ways of purchasing insurance are a major roadblock for Millennials accustomed to digital convenience. Millennials are also looking at value for their spend and bespoke solutions that suit their specific needs.

To meet Millennials’ preferences, insurers should:

1. Ditch the standard catalog and customize products to the needs of Millennials
2. Eliminate tedious processes and long wait times by using real-time data to streamline applications and approvals
3. Communicate with Millennial customers the way they like to communicate, whether by phone, text, social media, or other methods. According to a recent Prosper Insights & Analytics Survey, 29% of Millennials said a live customer service rep was “very important” to them, while 45% said the same about an easy-to-use website.
4. Equip salespeople with tools that connect the dots on each customer and provide a complete picture of their situation so the agent can personalize each interaction
5. Construct an ecosystem of services to build loyalty. For customers with an auto insurance policy, offer roadside assistance, devices and apps that monitor and reward safe driving habits, and maintenance notifications and discounts for repairs to increase engagement.

Drenik: How has digital transformation reframed the way consumers think and interact with the insurance industry?

Bhat: Millennials have grown up with technology, coming of age with the convenience of Amazon and the tailored recommendations of Netflix, among many other digital advantages. They expect speed and seamless experiences.

Insurers can play into these preferences by ensuring they offer the same level of digital competence that Millennials expect, including capabilities like:

1. Viewing insurance options online
2. Smart data capture to pre-populate forms
3. Recommendations on insurance products they need
4. Guidance and insight into insurance products and a conversation on what might work best for them in the long term rather than a traditional sales call
5. Omni-channel communication with consistency – whether on a phone call or a Twitter DM, agents should have a comprehensive view of each customer
6. Swift and delightful experiences

Drenik: How can the insurers identify various buying signals / triggers in the Millennial lifestyle across engagement mediums - i.e., website, phone number, an app?

Bhat: Many companies miss the buying signals they’re looking for because they don’t collect the right data, or the data is stuck in silos and offers no insights.

With a complete picture of a customer, you can reach out to them at every life milestone. When a customer gets married, buys a house, has a child, each of those are prompts for relevant products at each stage of their journey. They might buy a life insurance policy when they’re married, buy home insurance ahead of their closing date, add additional life insurance coverage as kids come along.

Every piece of data you collect is a crumb that any intelligent system should be able to identify, pick up a trail, and offer logical next steps to the agent who can sell the customer on the products they need.

Drenik: What about personalization - how can insurance companies leverage tech such as AI, cloud computing and data acquisition, to better personalize a customer experience and furthermore, how important is personalization?

Bhat: Personalization is the future of insurance services. Delivering targeted messaging, offers, and prices to the customer is key to remaining competitive. Technologies such as AI, cloud computing, and data acquisition can help.

Data acquisition is the foundation for personalization. You can’t customize products to each customer’s needs without knowing enough about them, their relationships, what they value, and what they own. Gathering open-source data as well as data from vehicles, smart home devices, fitness trackers, and more, and then merging that with customer profiles uncovers relevance and unlocks value.

Cloud computing ensures data isn’t trapped in any one institution. Too often we see insurers miss opportunities when they have relevant data about their customers but no way to collect or analyze that data.

AI automates the process and makes connections, saving time for agents and delivering greater value to customers by making more relevant recommendations and customizing products to each individual’s life situation.

Drenik: Are Millennials looking to speak to agents when weighing out their insurance options? How can agents transform into advisors, so they are seen as counselors, rather than salespeople?

Bhat: Interestingly, Millennials are not choosing exclusively online insurance buying experiences. They are actively seeking quality interactions with agents to understand various products and what may or may not work for them.

So, while they may research, fill in details, and seek an appointment online, they are finding value through in-person conversations with agents.

To cater to Millennials’ preferences and deliver more value, agents need to transform from salespeople to advisors. Getting there requires a 360-degree approach to the customer, which in turn requires a 360-degree approach to the sales team. Insurers need to empower each salesperson/advisor to achieve superlative customer experience, and it starts with:

• In-depth knowledge of products and the nuances among them
• Real-time access to product information
• Intelligent insights on customer personas to tweak the bouquet of products to best fit each individual’s situation
• Access to best practices and winning behaviors of colleagues that they can emulate to deliver superior customer experiences

Drenik: Many thanks to Yamini at Vymo for her time and insights. As Millennials hit life milestones their generation has previously delayed, insurance companies have a prime opportunity to get in front of them. Those that embrace the right data, cloud, and AI technology will be best positioned to engage with this generation.