Are you meeting the insurance needs of millennials?
Millennials, that generation of people born between 1981 and 1996, are on the cusp of overtaking Baby Boomers as the nation’s largest living adult generation. The oldest millennials are turning 37 this year. They’re well into adulthood.
But that doesn’t mean they’re turning into their parents.
If you want to succeed with this generation of insurance buyers, you’re going to have to change the way you do business.
Marketing to Millennials
Gone are the days of traditional advertising for your insurance business. Social media, constant connection, instant entertainment, and mobile devices are the innovations that millennials grew up with and trust.
When the iPhone debuted in 2007, the youngest millennials were only 11 years old.
Millennials are used to getting information instantly - with the swipe of a finger to a smartphone.
They’re using this information to make smart buying decisions.
Approximately ½ of millennials (47%) spend one to three hours researching finance options before making a big purchase, and as many as 23% of millennials said they spend seven or more hours conducting research before they buy.
“Millennials, on the whole, are not impulse shoppers,” says Mike Rittler, Head of Product Management and Merchant Relations at TD Bank.
“They like to research, they like to feel confident that the retailer and brand align to their values, and they want to make sure they’re getting the best price for an item, so they leverage a lot of channels in order to find this information.”
So how do you reach this generation of research-driven individuals? Online, of course.
At the bare minimum, you’re marketing strategy must include:
Rethink Your Message
This new generation requires a new marketing message.
Millennials are getting married later in life. They’re redefining ideas of family and relationships. They’re not buying into the notion that they need to get married and have 2.5 kids and own a home by the time they’re 30. Millennials are embracing diversity in families and 6 out of 10 are deliberately bringing up their children differently than they were raised. If your marketing message - and images - are skewed towards the “nuclear family” ideals embraced by the Boomer generation, you could be missing the mark with millennials.
Selling to Millennials
Millennials are often considered the most uninsured generation. Instead of being daunted by that, let it inspire you - there’s a lot of opportunities to meet the insurance needs of millennials.
Millennials need homeowners insurance. By 2020, millennials will account for ⅔ of first-time homebuyers. A 2018 Home Buyer and Seller Generational Trends study from the National Association of Realtors noted that millennials held the highest share of home buying activity out of all other generations for 5 consecutive years.
Not every millennial can afford to buy a home in every market. In some regions, increasing home prices and lack of affordable inventory is making it hard for first-time buyers to enter the market.
But that doesn’t mean this generation isn’t investing in “stuff.”
Millennials are spending more than their parents are right now. 81% of millennials said they made a single purchase of $500 or more in the past year, compared to only 61% of baby boomers.
Show millennials how they can protect their stuff with renters insurance and you can begin to form a relationship that will grow over time.
Millennials are also buying cars that need auto insurance.
You may have heard that millennials are “killing the auto industry” - but that couldn’t be further from the truth. The image of a millennial riding an electric scooter to her tech job in a big city is nice, but not everyone lives in a place where alternative or public forms of transportation are effective and convenient.
Everyone else still needs a car.
Consumers ages 21 through 34 are taking out new auto loans at a 21% higher rate than Gen X borrowers did when they were that age, according to a Transunion study.
Some millennials are buying cars to take part in the new gig economy, trying to make extra money as Lyft or Uber drivers. Ridesharing companies typically require their drivers to use a relatively new vehicle, so millennials are investing in new cars and hoping it pays off.
This entrepreneurial spirit doesn’t stop with ridesharing.
Half of millennials plan on starting a business in the next 3 years. Nearly a quarter of millennials own or have owned a small business. That’s a lot of need for commercial lines such as general liability, workers’ comp, and commercial property coverage.
Millennials are pursuing wellness; they’re eating more healthily, smoking less, and exercising more than previous generations. They use digital apps and devices to help them achieve their wellness goals.
Despite their attitudes towards health and wellness, the younger generation tends to be the most uninsured.
A White House economic advisors report stated that 20.9% of all young adults were without health insurance in 2014, the lowest rate since 1997. Though uninsured rates for millenials are improving, they are less likely to be covered than Americans of other ages – 16% of 18 to 34-year-olds were uninsured in 2015, compared to 11% of 35 to 64-year-olds, according to the U.S. Census Bureau.
- 12% of millennial women report that healthcare is one of their top concerns.
- By 2020, millennials are expected to allocate 15% of their spending to health goods and medical services.
Millennials who view themselves as health conscious may not feel the need to invest in health insurance and life insurance. Help them bridge the gap by putting a new spin on these two product categories. Show them insurance is an investment in their wellness. (Bonus points if you can figure out how to make that Instagrammable.)
Don’t Call Them Millennials
One final note when marketing to millennials - don’t call them that.
According to the Pew Research Center, most millennials resist the millennial label. ⅓ of older millennials consider themselves Gen Xers. Even among younger millennials, fewer than half consider themselves as part of this generation. The millennial generation eschews labels - even for themselves.
Marketing to millennials takes more than just slapping some images of hipster-looking young people on your website. It takes a careful understanding of their buying behaviors and attitudes. Capturing the business of this younger generation is well worth your time and effort, because the insurance needs of millennials are only going to grow as they do.