The first half of 2020 has seen an increased desire for financial stability from the public, with the coronavirus pandemic underlining the precarious nature of health and employment on a global scale. For insurers, this means a potential widening of the market, but only if they can tailor their product to meet the needs of the modern consumer.
Millennials – usually defined as people born between 1981 and 1996 – now make up around a third of the global workforce, and it is to this demographic that the insurance industry is now turning its attention. So what do millennials want? In many ways, the answer is simple: low prices and convenience. US studies show that the modern worker spends more hours a day working or commuting than ever before, while a study by Cake and Arrow reported 58% of millennials were struggling to pay bills or just break even.
With time and money in short supply, millennials are loath to waste either. The digital revolution has facilitated seeking out low rates and fuss-free transactions, and they expect to complete the majority of their business with a company via a company’s website or app. Thus, to remain relevant to a millennial customer base, insurers must optimise their online content.
For most companies, the website has become the main point of contact with its customers, and as such, it should be easy to find. This means SEO optimisation to direct customers to your site. Studies show that the majority of searches for insurance emphasise low price, so words like ‘savings’ and ‘deals’ are key, while promising speed and convenience with phrases like ‘hassle-free’ and ‘on demand’ are also useful.
The site itself should be attractive, simply laid-out, and easy to navigate, with important information clearly signposted. Customers should be able to manage their account online with the assurance that their data is secure. Millennials also expect to be able to access their accounts on the go, so a mobile app is a must. This should maintain as many of the website features as possible, but with streamlined, intuitive navigation.
But Cake and Arrow offer a word of caution against relying solely on the ‘quick and cheap’ model of selling insurance, which the authors argue has led to the erosion of brand loyalty. Customers have few qualms about switching companies for a better deal if everyone is offering the same product. Another study by Bain and Company suggests that while price remains important to millennials, it is not their sole consideration, with 80% of respondents stating that they would switch to a company that offered a better value product.
So how can insurers offer millennials more value for their money? Many companies already offer extras and rewards, while others have attempted to appeal to the millennial’s love of convenience by allowing people to customise policies according to their individual insurance needs, or branching out to offer additional, related products. Here again, a good website and app are crucial, enabling customers to manage everything in one place.
Cake and Arrow have even suggested a way of creating online ‘users’ as well as customers. Their research suggests that millennials feel divorced from traditional communities and react positively to anything that fosters a sense of belonging, or of shared benefit. Many also found insurance uninspiring as it was something to be paid for but rarely used. With this in mind, the authors trialled a product that emphasised the communal nature of insurance, where people paid into a communal ‘pot’ with others from similar backgrounds, and were able to see how the money had been used to help others in the group.
One thing is certain if insurers want to corner the millennial market, digital presence is the key. As ever, price, convenience and functionality remain the foundations of any millennial-friendly product, but to stand out from the crowd, the modern insurer can use the internet to offer added value as well as a good deal.