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Millennials Take a Different Road to Auto Insurance

APRIL 2019 Millennial Marketing Insight from HypeLife Brands: "Millennials Take a Different Road to Auto Insurance"



We did a little research on the views that Millennials — people born between 1980 and 1997 — share about auto insurance. Not surprisingly, wildly different conditions influenced their opinions compared to those that influenced previous generations.

Here's a look at what we found:
 

Millennials think insurance should be fast.

We have Geico to thank for that perception. The insurance giant spends over $1 billion on advertising every year. Millennials (and the general population) are bombarded with TV commercials, social media promotions & ads, sports marketing, digital marketing, and planes towing banners that proclaim, “15 minutes could save you 15% or more on your car insurance.”

And the reality is yes, it could, but it doesn't always save you 15% or more, as insurance is a heavily-regulated industry with complex, multi-faceted pricing structures that the average consumer doesn't understand or even know exist.

Regardless of the amount of savings one may or may not actually find with such promises (and advertising spin), Millennials have little patience with insurance administration overall.

What they really want is the information they’re seeking, quickly - and by “quickly,” they mean NOW (just as they can order a medium pair of yellow socks with a watermelon print and have it delivered it to their door in a matter of minutes, thanks to Amazon).
 
The Takeaway: Look for ways to speed, simplify, and humanize the insurance-buying process for Millennials.
 

Millennials are less loyal to insurance brands.

Millennials are willing to shop around for their insurance. And if they have auto insurance, they’re less likely to buy homeowners or renters insurance from the same provider.

A recent Gallup poll revealed that barely 31% of Millennial customers were classified as “fully engaged with” (read “committed to”) their primary insurance carrier, versus 34% of both Generation X and Baby Boomers.

When it’s time to renew their insurance, they’ll shop around for the best deal, since there’s little-to-no incentive for them to truly remain loyal to any particular insurance brand. And, stuck in marketing practices from decades past, insurance carriers do very little to inspire any sort of brand loyalty to begin with.

Incumbent insurance shopping platforms like GoodFetch have wisely recognized that insurance has indeed become a commodity for the modern consumer.

Responding to this gap in the marketplace, GoodFetch.com has simplified the process of comparison shopping for accurate insurance rates -- and completing a policy purchase -- down to a matter of minutes (across a vast carrier panel no less...think Trivago, but for auto insurance; one 5-10 minute process, get accurate rates, pick one, check out, boom...done).

Clearly, GoodFetch "gets it" twhen it comes to car insurance for Millennials, and what the modern, digital native consumer really wants.

By addressing this pain point, they've indeed humanized and NOW-ified the historically painful process of comparing rates across multiple insurance carriers' sites (which takes the mere mortal hours to complete).

Further, they've removed the need to complete lengthy form after form, only to have you, the user, get dropped down a rabbit hole of lead aggregation traps, tricks, sales tactics.

(You know, when you've shopped online for car insurance rates before, and it seems as if the whole world knows? That is then followed by an onslaught of phone calls and spam from random insurance agencies starting almost immediately...painful right?)
 
The Takeaway: Thanks to this lack of loyalty, Millennials are willing to try new insurance carriers, offering new opportunities for providers of all sizes. This levels the playing field substantially for insurance carriers both big and small — household brand names no longer hold the trump card.

In fact, Millennials in many cases would rather sign up with a smaller, newer more boutique-style carrier that "gets" them, and caters to their requirement of "Everything, Now."
 

Millennials are less likely to engage in face-to-face interaction with agents.

For older generations, most insurance shopping begins online and concludes with a face-to-face meeting with an agent. But Millennials are much less likely to set an appointment with a local agent. In fact, a recent study by Effective Coverage (performed by ORC International) found that only 34% of Millennials who buy insurance do so from a local agent.
 
And according to a J.D. Power survey, Millennials' preference for digital self-service increased to 27% in 2015, up from 21% in 2011.

Insurance agents (who are, on average, 60 years old) pitch specialized service and personal attention as points of differentiation, though in a heavily regulated industry, Millennials know better.

In the end, Millennials are far more driven by price and ease + speed of purchase (online is their first choice, of course) than personalized service.

The Takeaway: Personalize your online, digital experience with potential new Millennial buyers in mind.

This offers the best of both worlds, giving them the feeling of personal attention while recognizing their overall distaste for making an appointment and sitting in a dusty office waiting to meet with an insurance agent in person.
 

Millennials don’t place much value on insurance.

Millennials know they should have insurance, but spending money on it isn’t always a top priority. In a survey by AXA Strategic Ventures, only 16% of Millennials think insurance is necessary, and only 13% found insurance to be helpful.
 
As a result, according to a study by InsuranceQuotes.com, only 64% of drivers ages 18 to 29 have auto insurance, compared with 84% of older drivers.

The Takeaway: Content marketing and creative thought leadership components in your Content and Social Media Strategy offer an opportunity to educate Millennials about the importance and true value of insurance as a part of their lifestyle.

In other words, SHOW them why it matters, but don't TELL them to buy it.
 

Millennials want to pay for only what they use.

Gen Y is increasingly more interested in usage-based auto insurance (UBI) policies than any other age groups. According to a survey by Towers Watson, 88% of Millennials are interested in UBIs, versus 74% amongst other generations.
 
In fact, 75% of Millennials believe linking insurance rates to driving behavior is more fair than linking costs to factors such as age, gender, occupation, and credit score. Millennial drivers are also willing to pay more for services enabled by UBI technology, including theft tracking, location services in a mobile app ("Dude, Where's My Car?!"), automated emergency calls, and breakdown notification service.

The Takeaway: Offering more flexible ways to purchase insurance gives Millennials a chance to “try out” insurance.
 

Insurance companies lack the trust of Millennials.

Millennials, like much of the general population, are skeptical of insurance companies as a whole. They do, however, trust what their friends say and will look to their networks to help them in decision making.
 
According to an IBM Institute for Business Value survey, 89% of Millennials place more trust in friends’ comments than what a company claims in their marketing and advertising. An overwhelming 93% of Gen Y shoppers read reviews before purchasing anything, and that definitely includes insurance.

The Takeaway: Invite your satisfied customers to leave a review on your website to provide another viewpoint beyond your controlled marketing communications.
 

Meanwhile, they are dissatisfied with the current state of the online experience.

J.D. Power noted that, out of all the ways to interact with an insurance company, Gen Y ranked the website experience lowest, with an average score of 816, compared with 826 for Gen X, 841 for Baby Boomers, and 861 for pre-Baby Boomers. They found it easy to make a payment and gather information about their account, but they also want to solve most of their issues online.

When it comes to discussing price adjustments, only 23% said they prefer in-person meetings or phone conversations, finding them cumbersome and time consuming. At this point, insurance carriers have shown little innovation in regards to mobile apps that can make the online experience more customer friendly, although a few UBI upstarts such as MetroMile are quickly blazing a trail in this area.
 
The Takeaway: Optimizing and rethinking the online user experience will pay off in spades in the years to come, helping insurance carriers move towards increased customer satisfaction and retention (and growth) among Gen Y customers as they age.
 

Upscale Millennials represent a unique opportunity.

Millennials who make more than $75,000 a year are more likely to be married, well-educated, and homeowners. In fact, the 15% of Millennials who make more than $100,000 a year are more likely to have auto insurance than previous generations, and are likely to have life insurance as well. Their willingness to switch to a new provider offers a unique, ripe opportunity for insurance carriers.

The Takeaway: This niche Millennial demographic offers a rich opportunity to broaden insurance offerings well beyond auto coverage.
 
 
To wrap it all up, as Millennials grow older and continue towards higher incomes, they will continue to place a greater value on insurance. Invest the time and energy now to personalize the online experience, build trust, and strengthen your brand's relationship with them to build strong brand advocates for a future of growth.
 

Cheers,

Curt Cuscino
Founder & CEO
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