Insurance Literacy: How to Reach Millennials

Share on facebook
Share on google
Share on twitter
Share on linkedin

One of the most dominating topics across the financial services industry over the last several years has been around how to best market to and acquire millennials as customers[1].

Much of this discussion comes from a banking and finance perspective; how to offer millennials loans, how to get them to invest, how to sell them mortgages or wealth management services. When it comes to insurance, life insurers may not think that millennials spend much time thinking about their product. While this may be true, the reason is not due to a lack of interest in life insurance products, but simply a lack of awareness and understanding.

A whopping 92% of millennials report that they do not have life insurance coverage simply due to a shortage of financial education on the topic, the Huffington Post reported in December[2]. Thanks to digital technology and the convenience with which firms can deliver educational content to customers, this problem can be easily solved. It starts with recommending relevant products and services based on your customer’s life milestones or important events, such as graduating college, booking a trip abroad, or starting a new family – if a customer just had their first child, it might be time to start thinking about life insurance.

According to research from Cookhouse Lab, millennials are typically not reaching the key life events that would trigger the purchase of traditional life insurance products until they are 30 years old[3]. Accordingly, it is important to act as a trusted financial partner before that time so that when they do reach the age where life insurance becomes a priority, your firm is top of mind. In the aforementioned study, the insurance companies that participated focused their efforts on developing an “engagement framework,” which included a series of initiatives that could enable insurers to build a relationship with millennials during key life events by meeting their immediate needs, including financial planning assistance. The goal of this is to ensure when they do reach 30 – or any age where life insurance becomes a priority in an individual’s life – they have gained a sense of trust and brand awareness, increasing their propensity to purchase life insurance from you.

Millennials want to be contacted digitally and, as such, insurance companies need to change up well-worn communication routines and prioritize ease-of-use when it comes to signing up for life insurance. Companies need to modernize their outreach – send interactive digital materials and ensure that signups have a paperless option[4]. Furthermore, surveys on millennials often find that this generation values experiences over material goods. For example, millennials may prioritize spending money on traveling or living in a vibrant city rather than a down payment for a house. Knowing this, insurers need to focus their messaging on how their products can impact quality of life and help them achieve their goals.

Manulife’s Vitality program is a prime example of how an insurer has fostered long-term relationships with its customers by bringing immediate value to their daily lives. The insurance company leveraged wearable technology to incentivize customers into healthy behaviors, which could potentially lead to discounts on life insurance premiums and loyalty perks through merchant-funded offers. This kind of “gamification” can be highly effective. For example, encouraging them to walk 10,000 steps per day increases engagement, shows calculated value, and positions your brand as a trusted advisor in both customers’ financial and physical well-being.

Another way to educate and build trust can be through giving customers relevant information in real-time on health and medical insurance coverage when they visit a service provider. Many customers may not be aware of everything their insurance covers. If they are in a chiropractor’s office, you could send them a message stating that 100% of the cost of visits to specialists are covered, as well as an add-on 50% off coupon to the massage therapy office around the corner, and ending with instructions on how best to make a digital claim.

In wealth management, robo-advisors – digital platforms that provide automated, algorithm-driven financial planning services with minimal human supervision – are on the rise. This technology is beginning to impact the insurance industry as well. Lemonade is a great example – a bot signs users up and by answering a series of questions on their smartphones, the app collects enough information to create a personalized insurance policy for each customer. It’s what millenials are used to – think Ebay, Amazon and the basic ability to access the information they need online. Insurance companies need to evolve and offer baseline educational life insurance information through the digital and automated channels that millennials are used to.

The problem for many insurers is that to create the digital channels that deliver contextualized, interactive experiences means engaging in a costly overhaul of legacy systems and bringing together siloed data sources. Many leading insurance companies are turning to technology partners, rather than building systems in-house, in order to leverage and unify client data through APIs – meaning not having to initiate costly and lengthy IT projects. By transforming disparate data into actionable business intelligence and offering insight and information in an organic and non-intrusive manner, your millennial customers will already be primed to learn more about and purchase life insurance products from you when the time is right.

Sources:

  1. https://www.skyword.com/contentstandard/marketing/marketing-financial-services-millennials-revealed-winning-formula-digital-audiences/
  2. https://www.huffingtonpost.com/entry/5-life-insurance-trends-to-look-out-for-in-2018_us_5a3bd141e4b0df0de8b062ff
  3. http://www.cookhouselab.com/news/millennials-not-interested-life-insurance-project-update
  4. https://www.thinkadvisor.com/2017/02/03/secrets-to-selling-life-insurance-to-millennials/?page=2&slreturn=20180214131835

Enjoy What You're Reading?

Fill out the form below to sign up for our newsletter, where you can stay up to date on all of our resources that will help you contextualize your customer experiences. 

Related Articles

Optimizing The Cardholder Lifecycle - Part 4: Retention

Optimizing The Cardholder Lifecycle Part 4: Retention

Acquiring a new customer is up to 25 times as expensive as retaining an existing one, according to Harvard Business Review. That makes the fourth and final phase of the cardholder lifecycle, retention, extremely important to banks. By reinforcing card value proposition and proactively addressing potential causes of churn, banks can reduce their costs while also building loyalty.

Read More »

Making Payments The Hero Of Digital Transformation In Banking

Every day, more and more credit and debit card transactions take place without a customer ever touching their card. From Venmo to Apple Pay, bigtech and fintech players are launching services that erode banks’ interface with customers, making it harder than ever for financial institutions to build and maintain brand loyalty.

Read More »
Optimizing the cardholder lifecycle Part 3: Usage

Optimizing The Cardholder Lifecycle Part 3: Usage

Usage is generally the stage of the cardholder lifecycle where the bank recoups acquisition costs and generates the most revenue. When a customer is fully onboarded and credit card usage is happening on a regular basis, banks enjoy steady revenue, especially if the customer has set profitable primary-card habits as discussed in my last post on activation and early month on book (EMOB).

Read More »