What insurance providers should know about millennials
Do insurers know what millennials value? How can they be the most engaging segment for insurers to grow their customer base? What happens when insurers are able to craft the right contextual product, marry it with convenience and a truly friendly digital experience?
A decade ago, the world welcomed a new breed of consumers who changed the landscape of the financial services sector. Millennials, or those born between 1981 and 19961, are digital natives who hold attitudes shaped by the economic downturn2 of 2008 and the boom of technology that defined the turn of the millennium. Seeing the development from the lens of an insurer, it was interesting for me to map out what we should know about them as a persona so often quoted by marketers and product development teams.
It’s not news that traditional insurance companies have struggled in the past when reaching out to millennials because of how different they are from their parents’ generation. According to MasterCard, almost half of millennials globally3 prefer to spend money on experiences like travel and dining instead of material things. Millennials still like to shop, but they’re shunning traditional luxury goods in favour of gadgets like smartphones4 or making a new fashion statement!
They’re also taking longer to enter homeownership. For example in Singapore, where affordable public housing promotes high homeownership, a 2017 survey found that nearly two-thirds of Asia-Pacific (APAC) millennials5 are still living with their parents. Eighteen percent have delayed their plans to move out due to the rising cost of real estate and even public housing.
While millennials operate under different perspectives and circumstances, it doesn’t mean they’re not interested in insurance. A survey by IBM iX6 showed that 20- and 30-somethings would be inclined to buy life insurance if they better understood its offerings and benefits and if the processes were faster and easier. It is down to whether they see the value in buying insurance for the things that matter to them and present them in a simplified and transparent way.
What kind of insurance products do millennials want?
One strategy that has already proven effective is positioning insurance as something that can help them with daily health and wellness. For example, since 2019 Chubb offers a mobile customised total care service for dental appointments with oral health information for the first time in Korea. This holistic solution combines insurance with service and educational content for a society which is highly conscious of their health, including dental health.
In Korea, Chubb also launched a cancer insurance plan emphasising daily walking to stay healthy. Working with a wearable device and software developer who developed the health app, we give a premium discount if the policyholder achieves a certain number of steps within a specified period.
Customer experience is the key
In order to win their loyalty, companies must create a superior customer experience for millennials. As insurers, we need to think beyond traditional distribution systems and adopt a “millennial mindset7.” Millennials are empowered by a wealth of information at their fingertips. They trust in their own research to pick and choose insurance products themselves instead of simply approaching an agent or a broker.
When it comes to online experience, insurers need to bear in mind that they are not competing with another insurer when it comes to their experience standards. The benchmarks are mostly outside of insurance industry such as travel and e-commerce platforms. Therefore, insurers need to offer similar or superior experience to this broader digital experience standard set by them.
What’s more, millennials are open to purchasing insurance from new entrants, including companies such as e-commerce providers, tech firms and other digital platforms. The key to unlocking their wallets is reaching out to them in platforms, applications, transactions where they are already interacting.
In Singapore, ride-sharing turned super-app platform, Grab, introduced a microinsurance product called Ride Cover8 at the start of 2020. For just S$0.30 per trip, commuters can opt into a program that provides personal accident insurance during the trip underwritten by Chubb and a S$5.00 voucher by Grab for late pickups. By making it convenient to opt-in, relevant and contextual, the product resonated with the millennials and they have appreciated the value in this product. Ride Cover has been subsequently offered to passengers in other Southeast Asian markets.
A similar trend is observed in Korea where the leading mobile payment platform, TOSS, collaborated with Chubb to provide its consumers with a series of insurance products ranging from a one-day personal car accident insurance9, to dental insurance to an in-app mobile phone insurance.
Watch this space!
Sources:
1 Defining generations: Where Millennials end and Generation Z begins, 17 January 2019, https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/
2 Millennials at Work by PwC, https://www.pwc.com/gx/en/financial-services/publications/assets/pwc-millenials-at-work.pdf
3 Winning over the Millennials by Mastercard, 30 April, 2019 - https://www.mastercard.com/news/ap/en/blog-posts/en/2019/april/winning-over-the-millennials
4 The Millennial Influence by ipsos - https://www.ipsos.com/sites/default/files/2017-05/vocalink-the-millennial-influence-asia_0.pdf
5 Straits Times, 14 May 2017 - https://www.straitstimes.com/business/can-singapore-millennials-afford-to-buy-a-home
6 Why aren’t millennials buying life insurance? By IBM, 2 March, 2020 - https://www.straitstimes.com/business/can-singapore-millennials-afford-to-buy-a-home
7 Insurance customers edging away from brokers? 15 May, 2020 - https://www.insurancebusinessmag.com/asia/news/technology/insurance-customers-edging-away-from-brokers-222530.aspx
8 https://www.grab.com/sg/insurance/ride-cover/
9 https://www.koreatechtoday.com/toss-launches-mini-insurance-offerings-that-assure-risks-in-daily-life
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If you are keen to learn how Chubb can collaborate with you, get in touch with:
Jerry Ng
Division Head of Consumer and Bancassurance
Chubb Singapore
jerry.ng@chubb.com