Meeting The Insurance Needs Of Millennials
Insurers may not be able to predict the exact technological changes that will power insurance ten years from now. But they certainly need a digital strategy that allows them to respond rapidly
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Digital change is sweeping across every industry. Consumers are demanding a rethink and in particular the 18-35 age group - the Millennials - are looking to have a completely different relationship with the companies that provide them with services.
The research into this age group shows they have very different attitudes to insurance and other financial products, but many of the differences go deeper than just consumer attitudes: they are indeed living very different lives in relation to debt, car ownership and home ownership, digital devices and how they discover products. A Deloitte survey showed that Indian Millennials have very different attitudes to career and job satisfaction, preferring a more flexible, informal, open workplace with free-flowing communications and the opportunity to move around frequently.
As such, this age group shines a light on what the insurance of the future might look like, with so many young consumers viewing technology as a direct enabler for them when it comes to their relationship with insurers. Fully automated (touchless) insurance claims, proactively predicting a consumer's insurance needs in advance, and risk alerts through smart home technology could all be a realistic possibility in the next few years.
Given that India will become the world's youngest country by 2021, with 64% of its population in the working age group of 20-35, according to the 2016-17 Economic Survey, insurers are going to have to sharpen their strategies to stay relevant.
Some research from the UK for Capgemini and Pegasystems showed that price is the most important factor for selecting insurance amongst Millennial Internet users, with 79% saying cost is the biggest factor, followed by reputation (46%), ease of purchase (40%), availability of real people to talk to at an insurer (25%) and brand (21%). Almost half the young people surveyed believe that by 2025, their passports will contain detailed digital information that records not only the countries they travel to, but also specific places within these countries.
All of this means that this group - the wealthy middle-aged consumers of tomorrow - has a very different approach to brand loyalty, to how our data is built into services, and to life itself.
A recent Marketforce webinar chaired by Lindley Gooden of Greenscreen, and featuring presentations from Direct Line Group, RSA, Guidewire and digital insurer 1919 Insurance, discussed how insurers can respond to these changing consumer behaviours.
Traditionally, in any large composite insurance organisation, it's the senior (male) management making the decisions on insurance services, rather than a Millennial or someone who has a clear understanding of new entrants to the insurance world and new consumer types. This is challenging for many insurance companies. It is further complicated by the rise in a society of bundled technology services and new ways of living with Uber, Airbnb, with elements of micro-insurance and usage-based insurance changing daily life.
Young consumers demand speed and a fantastic customer experience. They want to sign in automatically and pre-populate their insurance application from an external data source.
There is an expectation of super-fast response times (minutes rather than days) which is being fed by people's experiences on social media. The era of a 24-hour response cycle coming from the insurance call centre is becoming a thing of the past.
So is the change happening in the insurance industry in the way it needs to be?
In terms of innovation, in insurance recently we hear talk about insurance 'anti-bodies' or those individuals in the life-blood of the organisation who are determined to surround and kill-off any foreign body (any new process) which threatens the status quo. But insurers around the world are getting better at identifying these cultural blockages to innovation.
Innovation sometimes has to work its way through layers in the IT processes of the insurance organisation.
So insurers may not be able to predict the exact technological changes that will power insurance ten years from now. But they certainly need a digital strategy that allows them to respond rapidly.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.