With so much talk about Millennials, it still surprises me how some insurance companies ignore us as a vital market.
Here are 3 reasons why insurers should start actively targeting Millennials:
1. We are the widest market
Millennials, also known as Generation Y, are people born roughly between 1977 and 1995. While many people still think of us as kids, we are in fact between the age of 20 and 38.
This year, we will become the largest generation alive, both in the USA and globally, surpassing Baby Boomers. In fact, there are approximately 75 million of us in the United States. And this number is growing! “The Millennial population is projected to peak in 2036 at 81.1 million.” While we are no longer accepting new members to the Millennial clan, most new US immigrants are Millennials.
2. We are an undipped market
As adults, most of us are no longer eligible to be under our parents’ insurance. This means we have to go out into the world and purchase our own. However, research has shown that “Millennials are the most underinsured generation alive today.” Targeting Millennials can bring millions of additional dollars to an insurance company, but you have to know how to get us.
We are a very over-protected generation, so it might seem ironic that we do not see the need to be insured. Our problem is that we do not see the benefits of diving into our pockets to pay for insurance. If insurers want to tap into this market, they have to show us the value of being insured, while providing us with good coverage, competitive rates, great customer service and mobile accessibility.
The younger Millennials are in or graduating from college. As we are starting our careers, most of us move out and buy our own car. Consequently, we need renters and car insurance. We are still not making a lot of money and with so many bills to start paying, our priority might not be to pay insurance. Insurers must convince us that the benefits are worth the (low and fair) cost.
Older Millennials are starting families and buying new homes. Many home insurance companies tend to ignore us as potential homeowners as there is a stereotype that we want to rent a cool apartment in the city. This is true for young, single Millennials. However, most of us correlate success with owning a house, but we are just not rushing into settling down and buying our first home. In fact, studies have shown that adults age 22 to 34 want to one day have a place of their own more than older generations did. The difference is that we start our families later than previous generations, and since it is more affordable to buy a house with two incomes, we wait.
Actually, we are very old-school when it comes to raising a family. Like I mentioned, young Millennials want to experience city life, with the goal of moving to the suburbs one day to raise our kids. It is expected that more of us will own homes than our parents. This trend has already started, with half of us already having kids, making us the largest group of homebuyers in the USA already.
3. We have not yet established loyalty to one insurance company
Many insurers underestimate Millennials as they think we won’t make very good customers. Sure, many of us don’t have dependents yet, or have big liabilities. And most of us don’t own as much as Baby Boomers yet and therefore we don’t need as much insurers yet… The key word here being “yet”; as we age, this will all change.
Human are creatures of habit. And while Millennials are highly critical and are more opened to change than our elders, we also tend to stick with something if we like it. Same goes for insurance companies; if we like you, we will keep you. And since we have not yet established a brand loyalty to an insurance company, it is easier for a good insurer to snag us and keep us as a client as our assets grow. We can already see this with older Millennials: Who better to insure your new home than a company who insures most of your other assets?
In all, we might be tricky, and we might be picky, but we are also the up and coming next generation of buyers, and just like our parents, we need insurance.