Enter the millennial
They are highly educated, far more tech savvy than previous generations, less interested in ownership of cars and homes, and don’t place the same value on material and luxury goods as previous generations did. Furthermore, they expect authenticity, engaging products and visual marketing over text-based advertising.
All this suggests an approaching storm for traditional insurers, and those who are unwilling – or too slow -, to reinvent the insurance wheel, will be left spinning as fast-adopters race into pole position.
Exit brand loyalty
Millennials, and to much the same degree Gen-Z, reject the idea of traditional brand loyalty. Growing up, they witnessed the dot.com bubble burst spectacularly, and then watched in disbelief as one of the worst economic recessions in living memory devastated the well laid plans of their parents and peers. Homes, jobs, savings and pensions disappeared in the blink of an eye, rightfully leaving millennials extremely distrustful of capitalism and deeply wary of long term brand loyalty. In some ways, and at least temporarily, they have been inoculated against the slick marketing and soothsaying of monolithic brands and their over-confident promises. But for all that, millennials, unlike their parents, embrace rather than fear innovation, and this means that, if you covet their loyalty to your brand or fleet of services, you need to be keeping pace with their expectations in terms of marketing and product and service innovation.
“In 2015, millennials became the largest generation in history with over 75 million individuals. This is a vast potential market, representing a demographic group that is in their prime spending years.”– Neilson Marketing Services
Efficiency before everything else
Whereas previous generations accepted that insurance and pensions are complex financial products that require time and effort to set-up and nurture correctly, millennials expect insurance and pension providers to keep up with technological advancements and offer highly efficient services that can be activated, deactivated, amended and augmented via a few simple button presses on their smartphones. And why shouldn’t they? In an age where you can book an uber, or a flight or a holiday in a few simple steps via a smartphone, why shouldn’t insurance services be just as accessible, efficient and agile?
Ecosystems that favour user experience will win out over superior products. More efficient interactions, with flexibility as a cornerstone of product development, will not only make attracting millennials easier, but may even go some way to restoring their loyalty in brands and providers.
The shift in user interaction and expectation for millennials and Gen-Z is far greater than any shift seen in baby boomers or Gen-X, and that is in large part driven by the interconnectedness and advances seen in consumer technology over the last two decades or so. Armed with this knowledge, it stands to reason that the next generation of insurance services must be aligned with the expectations of the millennial and Gen-Z customer.
As such, there is no time to lose. Insurance and pension providers prepared to recognise the requirements of millennials and Gen-Z, should start building the right products and services today.