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The Future: Millennials & Insurance

Posted By Administration, Tuesday, March 17, 2015

Weekly Industry News will be focusing on millennials those born between 1980 and 1996 over the next few weeks. This series wont be weekly but we will be featuring information about the next generation and its impact on the insurance industry, on you and your families, on society and on millennials themselves.

Millennials also called Generation Y are now the largest generation in terms of population in the nation and have grown past the boomers. Estimates say there are 80-million of them.

As the nations newest consumer force, they are currently the focus of most marketers. Millennials are huge consumers. Theyre also in the sights of politicians and political campaigners.

And they are the workforce of the future. Most of you if youre an employer by now employ one or more of them. If youre an employee, youre not doubt working along side a millennial.

Applied Systems recently did a study of Gen Y. It concludes millennials whether they are employees, business partners or customers bring a unique set of values and expectations to the table. This is an important factor for insurance to note. To attract and keep millennials as either a customer or an employee, their expectations must be met or they will go elsewhere.

These young people are the first generation to be constantly connected to the world around them. This as you have seen involves mobile devices such as smartphones and tablets. You will rarely see a millennial without one nearby or tightly clutched in their hands like it will leap out if the grip loosens.

They walk streets and hallways with eyes glued to them and this is where the rest of the world must reach them. That world by the way and as well note later is quite limited.

Heres some information you need to know:

  Millennials are always connected.

  They send up to 100 or more texts a day.

  80% visit social media sites daily.

  Over half use mobile devices to do so.

  For 71% of millennials, when a problem or need is encountered, an online search is the solution.

  They are 2.5-times more likely to adopt new technology early in the game than their older counterparts.

 

The Applied Systems study said millennials are not shy about voicing their opinion positive or negative about a product or service. Heres how they communicate to other millennials or to anyone wholl read or listen about their experiences with a product or service:

  44% test message

  16% blog

  38% social media

  38% instant messaging

 

This presents a huge problem for the insurance industry. We are historically more conservative and a generation gap exists. Millennials think differently. They are coming of age at a point in history where there are major shifts happening in technology, in business, cultural norms and social media. The industry is catching up to the idea that it must be more technology savvy and more understanding of the forces that shape millennials to win them over but it is happening more slowly than some would like.

Those in the industry whove figured it out and who are offering multi-channelled communications for millennials are doing better than those that dont.

Heres the good news for the independent insurance agent. Millennials want all the technology bells and whistles offered to them. Quotes on line are important and information online for what theyre buying is important, too. However, they like their parents and grandparents value the one-on-one or over-the-phone communication when it comes time to buy.

They want to trust you and that trust is critical to keeping them as customers. More good news. They are insured.

  91% have some form of property/casualty insurance

  89% have auto insurance

  55% have homeowners

  42% have renters

 

By the way, if you employ a millennial, most want more, not less responsibility and they want it now. But are they ready or educated enough for that responsibility? Probably not according to a shocking but not surprising new study by Princetons Educational Testing Service.

ETS administered a test developed by the Organisation for Economic Co-operation and Development to adults 16 to 65 in 23 countries. The focus, however, is on those born after 1980.

The study looks at the three areas most critical to employers. The first is literacy or the ability to follow written directions. Second is numeracy or the basic ability to understand and crunch numbers and third, problem-solving in a technology rich environment.

Though our millennials are the most educated generation in history, it did an epic fail in literacy, numeracy and problem solving in technology-rich environments (PS-TRE).

Top 5 scores in literacy:

1. Japan

2. Finland

3. Netherlands

4. Australia

5. Sweden

 

The United States is 17th out of the 23 countries in literacy. Only millennials in Spain and Italy had lower scores.

Top 5 scores in numeracy:

1. Japan

2. Finland

3. Flanders (Belgium)

4. Netherlands

5. Sweden

 

The United States is ranked 21st of the 23 countries. In numeracy, U.S. millennials ranked last, along with Italy and Spain.

Top 5 scores in PS-TRE (Problem Solving in a Technology Rich Environment):

1. Japan

2. Finland

3. Australia

4. Sweden

5. Norway

 

The United States placed 18th out of the 20 countries participating in that part of the study. In PS-TRE, U.S. millennials ranked last along with the Slovak Republic, Ireland, and Poland.

This is the most shocking of all of the results. American millennials are considered the most technology savvy people on the planet.

EST researcher Madeline Goodman said millennials not only rank lower in skills than their peers around the world, but they rank lower than all other age groups in the U.S.

We really thought [U.S.] Millennials would do better than the general adult population, either compared to older coworkers in the U.S. or to the same age group in other countries. But they didnt. In fact, their scores were abysmal, she said.

The studys conclusion is even more to the point.

A decade ago, the skill level of American adults was judged mediocre. Now it is below even that. Millennials, who will form the backbone of this nation's future, are not poised to lift us out of this predicament; in fact, the lack of adequate skills in this population has become a challenge for us to confront.

The impact the study notes puts the U.S. economy in dire straights.

The skills of our Millennials our youngest cohort, who will be the workers, the decision-makers, and the parents of the next 40 years will also have cascading effects on every level of society. A very real danger lies in perpetuating a cycle where low skill levels, less income, and less access to quality education will beget a further entrenchment of deep inequality, with some segments of society more at risk than others, it concludes.

Is more higher education the answer? Probably not. Millennials the report notes have been passed through high school and college without acquiring adequate skills. Policy makers and other stakeholders will need to shift the conversation from one of educational attainment to one that acknowledges the growing importance of skills and examines these more critically, the report said.

 

Source links: CBS MoneyWatch, 6ABC.com, Fortune, Applied Systems

Tags:  Insurance Content  Insurance Industry  Insurance News  Millennials: Looking at the Future of Your Busines  The Future: Millennials & Insurance  Weekly Industry News 

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