“Hi @VelocityInsurance. I’ve had it with @TheBestInsuranceCompany. I want to buy a comprehensive insurance package for my car from you. DM me for details.”
This tweet is not atypical of what you’re likely to find on your Twitter timeline on any given day. It is an illustration of how today’s generation of customers use all sorts of platforms, including Twitter, Facebook and LinkedIn to switch service providers as and when it suits them. If they’re not happy, they simply move on. And moving on really needn’t be an arduous process either. It’s a far cry from the days of doing your due diligence by calling your broker to discuss the pros and cons of taking your hard-earned money elsewhere.
A ‘new’ type of consumer has started making their mark on the global insurance industry, according to the 2016 World Insurance Report. This report is based on the short-term insurance industry’s largest Voice of the Customer Survey – more than 15 500 respondents in 30 countries (including South Africa) – to present a comprehensive picture of the motivations, habits, preferences and behaviours of a critical customer segment – Generation Y, also known as the Millennial generation.
Millennials can typically be described as the generation born in the 1980s and 1990s who are familiar with digital technology. This generation of people constitutes the current and immediate future potential buyers of insurance and they have started making their mark on the global insurance industry, threatening to disrupt the way insurers interact with customers and destabilizing traditional engines of profitability.
A key finding from the study was that, while global customer experience of insurance has improved, Millennials proved harder to please. This generation of people also preferred to interact with their insurer nearly twice as much as the generation before them (who were likely to have used a broker for most interactions) pointing to another interesting phenomenon: if customers have more channels to talk to insurers on, they may be using it to highlight difficulties, bad experiences or complaints more than anything else. This assertion is supported by a 2015 survey conducted by the UK-based Institute of Customer Service which showed that customers are using social media to complain about companies eight times more than in 2014.
A further illustration of how Millennials prefer to interact in their world is the connectedness of everything – signalled by the rise of smart ecosystems (your home appliances are all connected), wearables (smart watches) and driverless cars – also known as the Internet of Things (IoT).
The findings in the World Insurance Report assert that insurers and customers display differences in how quickly they expect connected technologies to be adopted. For example, the study found that customers anticipate that they will adopt driverless cars in greater numbers than insurers expect, which is hardly a surprise if the adoption of uber as a mode of transport over the past five years is anything to go by. Of course, driverless cars pose a variation of different risks and considerations for insurers and governments respectively and the debate has only just begun.
So how can today’s insurers respond to the Millennial generation? Firstly, take the time to really understand what they want – they are talking to you all the time. And if they’re not talking to your business, you may want to consider finding ways to talk to them first.
From the rise of technology stems a myriad of opportunities for insurance firms: Customers’ lives are becoming more mobile and therefore traditional ownership patterns are changing. The liability aspect of insurance will certainly change with the introduction of driverless cars, and so too, the way insurance products are underwritten.
Recognise that most interactions with your client (or potential client), including the underwriting process and buying of the product, will have to be tailored to individual circumstances and preferences.
On-demand insurance business Trov did just that in May this year.
Click here for more information on how to market your business to Millennials and Generation X.
Click here to download the World Insurance Report
Florence de Vries is a communications manager in the short-term insurance industry.