Representing one of the largest living generations, millennials – those born 1980-1996 – are projected to surpass Baby Boomers in total population by 2019 according to Pew Research Center. While, Gen Z – those born 1997-present – are expected to make up 33% of the global population by 2020 and outnumber millennials according to Superior Access. Both of these generations are the workers and consumers of tomorrow with purchasing power estimated to be in the trillions of dollars annually.
Given the size and economic capital these two generations possess, combined with the fact that eight in 10 have insurance, it’s critical for insurance providers to adapt their business strategies to attract and retain millennials and Gen Z as customers.
Buying Behaviors and Preferences of Younger Adults
To better understand what millennials and Generation Z are looking for in terms of insurance service providers, Applied Systems partnered with ORC International, a leading business intelligence research firm, to conduct a survey of their insurance habits and preferences.
Here are a few key findings:
- Auto insurance is the most common insurance held
Across all countries – United States, Canada, United Kingdom and Ireland – the majority of millennials and Gen Z (8 in 10) have some form of insurance. Auto insurance is most commonly held, and younger adults in the U.S. are the most likely to have it.
- Word-of-mouth referrals are the biggest influence
Word-of-mouth referrals influence millennials and Gen Z the most when they are shopping for insurance. However, online searches are growing in popularity and should be considered in communication strategies given consumers’ shift to mobile first.
- In-person interaction is the most common insurance purchasing channel
While in-person interaction continues to be the most common method of acquiring insurance, particularly for younger adults in Canada, digital channels are growing more popular especially among those in the UK and Ireland.
- Direct call with an agent is the preferred method of communication
For auto and homeowners insurance, the preferred and most frequently used communication channel by millennials and Gen Z is a direct call to an agent. For renters, an in-person interaction is preferred but a direct call to an agent is used more often.
- 24/7 customer service is the most important insurance feature
Overall, both 24/7 customer service and mobile app access are perceived to be highly important in selecting a provider. However around-the-clock customer service is perceived to be more important, especially by younger adults in the United States.