The Millennial Opportunity for Insurance Carriers
How Incumbent Insurance Carriers Can Take on the Millennial Market.
As the digitally-savvy Millennial generation dominates the marketplace, accounting for over 75% of the global market by 2025, the longstanding insurance industry is evolving rapidly to serve this generation. Millennials are waiting longer to complete major life events such as getting married and having kids and fewer of them are purchasing traditional life and property & casualty policies, instead looking for shorter-term products that support their lifestyle. Nielsen data shows just 63% of Millennials own renters or homeowners insurance versus 73% of Gen Xers and 78% of Baby Boomers.
Millennials are more than twice as likely as other generations to purchase their policies online.
In addition, when Millennials do engage with insurance carriers, they are more likely to do so online compared to other generations. According to Gallup Business Journal, Millennials are more than twice as likely as all other generations to purchase their policies online rather than through an agent.
New entrants to the industry have been able to attract and engage Millennials with products focused on usage-based and on-demand protection - Trov and Metromile are just two of many examples - and new digital channels that provide simple, guided experiences for everything from quoting and applying to filing claims - Lemonade has paved the way. This “insuretech” market is only growing, with CB Insights reporting over $1 billion invested in insurance start-ups in both 2015 and 2016.
Digital Transformation for Incumbents
Vlocity believes one of the many ways incumbent carriers can compete in the digital era is by creating omnichannel digital experiences that integrate with their back-office processes. Utilizing cloud-based technology and providing a streamlined digital interface for everything from quoting to changing an address to filing claims will help carriers more easily engage with younger consumers, either directly or through digitally enabled producers. Machine learning and IoT will enhance the ability to provide consumers with personalized offers and experiences at just the right time.
One of the many ways incumbent carriers can compete in the digital era is by creating omnichannel digital experiences that integrate with their back-office processes.
Vlocity’s customers are seeing that the speed and simplicity that comes from digitizing their channels is producing measurable business benefits and helping them keep up with the pace of business today. As carriers take a channel by channel approach to digital transformation, they will become more agile and equipped to test and launch innovative new products, business models, and experiences. Combining their strong brands, history, and experience in navigating regulatory hurdles with simplified, omnichannel processes will create a powerful advantage in the Millennial market.