The age-transcending millennial mindset is transforming the insurance industry
Blog: Capgemini CTO Blog
The fast-growing millennial population, roughly 72 million in the United States – about 25% of the overall population, is a hot topic in boardrooms and executive discussions. Why? Because the popular assumption is that “millennials” as a demographic segment have a huge liking for digital channels, which invokes a unique set of needs and preferences, and businesses have to engage with them differently than they do with Gen-X or boomers.
However, the findings of the World Insurance Report 2020 suggest that the digital divide between the age groups is shrinking (Figure 1). Today, customers across the age group spend a lot of time on their mobile devices and take a new approach to understanding and accessing products and services. This phenomenon is breaking traditional acquisition and retention patterns in several industries.
Figure 1: Customers frequently doing transactions online or via mobile app (%), 2018-2020
Today, the word “millennial” represents more than a shift in demographics. It also signifies the mindset of consumers who are setting new norms for making pre-purchase decisions about value.
The millennial-mindset consumer is forcing insurance executives to re-examine business models and rethink the way they interact and serve policyholders. During our research and direct conversations with customers, we noticed common themes around elements such as lifestyle, make it easy, make it quick, and earn my trust!
The question then becomes, how do insurers manage this evolving customer demand, and what should they focus on?
Only genuinely focused offerings will capture the new consumer’s attention
What is interesting in our research, is that although the new normal is “digital first,” today’s consumers also rely on analog resources (friends, conversations with producers, peer recommendations) for information before making decisions. They are not tied to digital channels as tightly as many think; they value all insight regardless of their source, and they are not shy about boundaries. (Figure 2).
Figure 2: Customers’ preferred mode for insurance research (%), 2020
Strategic insurers offer seamless omnichannel access and meet the changing expectations of today’s customers by simplifying existing products and processes to create relatable offerings available via a streamlined purchasing process.
Consumers with a millennial mindset tend to view relationships holistically. They look at their entire insurance experience – exchanges with their broker/agent, call center, claims manager, and adjuster – to continuously assess their relationship with the firm. The key for insurers is to tie everything together in a truly seamless, easy-to-consume experience, so the policyholder isn’t forced to wait or guess. Maintaining trust and the firm’s integrity is critical.
Offer empathy and transparency
Aside from anticipating a seamless, omnichannel experience, another definitive characteristic of the new consumer is the expectation of empathy and transparency throughout their engagement with the industry. This requirement applies to sales as well as service and claims processes.
Insurers should not see clients as individual policies scattered across multiple systems. Today’s need is a holistic approach while handling customer interactions. Customer service representatives and agents must access multiple systems to retrieve all relevant information to deliver an informed opinion regarding the client’s situation.
As insurers speak to customers, one thing that is loud and clear, they do not want any unpleasant surprises if they ever have the unfortunate moment where they have to “understand and/or use” their insurance, generally in the form of a claim. This is the moment of truth when a customer truly determines whether they have selected the right insurer.
Overall, customers with a millennial mindset seek two things:
- A holistic omnichannel experience while interacting with insurance firms
- When they are in a vulnerable moment where they need the insurer’s help, they look for seamless, transparent, and easy-to-consume, timely and personalized information.
As the industry is accelerating its efforts on initiatives such as “modernizing our core” or “digitalization,” understanding what todays customers expect is the key to building the right infrastructure for providing an experience-led engagement to the customers. Are you ready?
For more information about millennial-mindset consumers and the rapidly changing insurance landscape, we encourage you to take advantage of Capgemini’s World Insurance World Report 2020, available for complementary download here. Or reach out to us individually: Milind Shah, Insurance Leader – Capgemini Financial Services, and Tom King, Director – Insurance, Salesforce.