Insurers and Millennials: Defining the Consumer Relationship

The proliferation of digital distribution channels has caused a widespread reevaluation of business processes across many industries. Evidently, the insurance sector is no exception. The use of digital technologies throughout insuring processes has become exponentially more prevalent – a movement known as “Insurtech.” At the core of these technological advances is the shifting of target markets towards social media savvy Generation Y which, for marketers, represents a goldmine for insight-driven business intelligence.

Within the scope of this digital transformation, insight-driven marketing is essential for effectively responding to the demands of millennials. A major basis for any successful marketing campaign is developing an understanding of target consumers, and in order to understand them, an agency must first listen to them. With insight-driven marketing strategies, insurers can collect qualified information on the needs, experiences, and preferences of consumers.

To gain a more fundamental understanding of Generation Y’s perceptions of the insurance industry, the Digimind Blog took a look into OpinionWay’s 2017 study entitled “Reinventing Customer Experience in Banking and Insurance: Listening to Generation Y.” The quantitative study isolated a sample of roughly one thousand French millennials between the ages of  20-35 and interviewed them about their experiences within the worlds of banking and insurance.

Generation Y and the Insurance Industry

While 54% of the surveyed sample reported having a positive perception of the insurance industry, a significant portion of the sample reported negative views of the sector. 40% of the sample reported that they felt that insurance companies lack transparency in communicating their service offerings to customers, while 44% stated they believe that insurers fail to put the interests of clients before their own. The overall rating of client experience of insured individuals within this sample was not unpromising – the average rating of insurance providers was reported at 7.1/10.

Despite generally favorable ratings, customer loyalty rates are less than stellar. Generation Y has proven to be a relatively volatile demographic in terms of customer loyalty, with as many as 22% of the sample reporting to have insurance plans with multiple insurers at the same time. Similarly, the study states that 55% of the sample reported that they would be willing to change insurance providers.

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Optimizing Generation Y’s Customer Experience

The three key strategies extrapolated from OpinionWay’s study are as follows: simplify, empower, and personalize.

1) Simplify the customer experience.

According to the study, 59% of the sample agreed that they prefer simple insurance procedures and insurers they feel do not waste their time. However, 41% of the sample reported feeling that their providers have not optimally simplified their insurance procedures.

2) Empower the customer with the choice of digital or traditional brand communications.

Generation Y is very technologically competent, and they prefer to have autonomy in their digital brand interactions. 77% of the sample stressed that it is important that they be able to carry out complex processes themselves online or via an app. In an age where millennials have the internet at their fingertips via smartphone, it shouldn’t come as a surprise that the immediate availability of insurance providers is strongly preferred. 78% of the sample stated that the most important trait in a provider is the ability to provide customer service 24/7.

While digital communications are important, the study found that traditional, personalized contact is also highly valued among millennials. 44% stated they would like to be able to interact with an insurance adviser on social media, 70% wanted the ability to speak with an adviser on the phone, and 67% highlighted the importance of meeting with an agency adviser at least once. The results are evident: both digital and non-digital communications are very important for millennials. Websites, apps, social media, telephone, and face-to-face are all necessary points of contact.

Statistically regarding customer experience, 60% agreed that both digital and traditional interaction are important, 82% agreed that they would not feel comfortable without personal interaction with insurance agents, and 75% feel that the relationship with insurance providers should be entirely digital. The lack of a unanimous result demonstrates the need for insurers to provide all forms of communication.

3) Personalize customer experience through social listening.

55% of the sample felt that insurance providers are listening to their customers’ needs, and 53% believe that insurance providers have a good understanding of their generation’s expectations. These are by no means bad results, however this data demonstrates that a large minority of millennials expect insurance companies to implement better customer listening services. Digital technology offers a promising solution to this issue, as 75% reported that they felt that the implementation of digital communication technologies would allow insurance providers to successfully anticipate the needs of millennials and provide personalized service.

Personalized services call for providers to have access to some level of personal information about their customers, and fortunately the sharing of personal data is generally accepted among millennials so long as it leads to the benefit of personalized service. Generation Y is more likely relative to Generation X to share personal information with their insurance provider: 69% reported that they would be willing to give personal information to their provider in order to receive more highly personalized services.

In regards to personalized services, 64% of the sample reported a desire to be kept informed of any changes in their plan according to their personal situation. In the same vein, 52% of the sample demonstrated interest in obtaining service offerings based on unrelated purchases: for example, receiving benefits on repatriation insurance if they purchase an airline ticket abroad.

Where should insurers find inspiration?

The study’s surveyors asked the sample which companies insurers should take inspiration from. The overwhelming response was to aspire to be similar to “game changing companies;” companies that have become leaders in their sectors. The following three companies were most commonly mentioned:

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The brands most commonly mentioned by the sample: Amazon, Apple, and Free Mobile.

Generation Y is incredibly present on social media and has become accustomed to expressing themselves online. 49% of the sample reported having posted online about a product or service to share their experience with other consumers. Additionally, 49% report having previously recommended or discouraged the use of a brand to other consumers online. Finally, 45% reported that they have interacted directly with a brand via social media. Altogether, 65% of the sample reported that they’ve done one or more of these three before. These results confirm that insurers have a lot to gain from strengthening their presence on social networks.

According to a Digimind study on the social media marketing strategies of insurance providers, Facebook is the most effective social media platform for insurance providers. Digimind’s study found that over 90% of the total social media followers for French insurance providers were on Facebook – at the top of the rankings: 99% for Aviva, 98% for BNP Paribas, and 96% for Euro-Assurances. YouTube was also found to be an essential channel for social media interaction: concentrating between 96% and 99% of social media interactions for top insurers Matmut, Crédit Mutuel, Axa, and SG. For example, a YouTube advertisement for Matmut’s home insurance has over 909,000 views!

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Use social media monitoring to unlock your customer's opinion with this free template.

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