April 17, 2015 by Suzanne Sharma
Changing demographics are making the goal of generating new business for brokers extremely challenging. Targeting tech-savvy Generation Y (born from about 1976-2000) can be difficult for brokers who don’t speak the lingo.
So how can brokers from an older generation attract and retain those under 35 and forge long-lasting business relationships? The secret is in the speed and ease with which you deliver information and provide coverage.
“Baby boomers are looking more for a relationship and loyalty,” says Traci Boland, operations manager at Ontario West Insurance Brokers in London, Ontario. “They probably will stay with you even if the cost is a bit more because they want the personal attention from someone they can trust. However, Gen Y is about technology and simplicity. They want you to get to the point.”
While some may categorize the buying habits of Gen X and Gen Y together, Maurice Poulin, first vice president at the Insurance Brokers Association of British Columbia (IBABC) disagrees. Gen X insurance buyers were usually referred to the broker their baby boomer parent used when they bought their first car, he explains. When it came time to buy a home, the Gen X buyer likely went to the same broker. This group demands prompt and efficient service because they are busy with family and careers, with both parents working.
“Gen Y on the other hand is a different animal,” he says. “While Gen X is tech-savvy, Gen Y is plugged in 24/7. Email is passé, and even texting is giving way to other social media.”
Poulin explains these young adults are less likely than previous generations to have their own vehicles or homes–many of them still live with and are supported by their parents. They are most likely to search the Web for information and pricing, and are less likely to initiate a face-to-face meeting with a broker.
“Our challenge as brokers will be to help them find a way to us to become their trusted source of insurance expertise, and to use technology to maintain communication,” Poulin says.
What Young Clients Want
Canadian Insurance Top Broker hit the streets and asked dozens of youngsters what they look for when purchasing home and auto insurance.
Very few mentioned that support with claims (an area many brokers emphasize as part of their value proposition) was important to them. Many of the surveyors weren’t even aware of the sticky situations that could arise if claims aren’t handled properly.
Instead, almost everyone surveyed voted price above all else, and with the direct writers and banks offering competitive rates, it’s difficult for brokers to keep up.
“We have trouble binding coverage for new drivers,” says Greg Robertson, vice president of R. Robertson Insurance Brokers Ltd. in North York, Ontario. “They will call but we can’t compete with the direct writers’ pricing model.”
Robertson says the insurance carriers that brokers do business with are almost forcing the younger generation to direct writers due to their inability to provide lower prices.
Additionally, Gen Y’s desire for everything to be available at the click of a button is another obstacle for brokers.
Bryan Yetman, president at the Insurance Brokers Association of Ontario (IBAO), says part of the problem is the broker channel doesn’t have the necessary support from their broker management system vendors. In addition, the regulatory environment needs to be changed before brokers are able to make the move from paper to electronic. For example, for most insurance applications that come from a broker in Ontario, pink slips and registered letters need to be completed or delivered in paper format.
“As brokers, we aren’t there yet,” says Yetman. “The directs and the banks are doing better than us by offering this to the younger generation.”
Where brokers have the directs and banks beat is in the relationship and the ability to offer great customer service, according to Yetman.
“The younger generation values the relationship just as baby boomers did, but in a different way,” he says. “They feel that you can have a relationship with someone from behind a computer [via email], and this doesn’t make the relationship any less valuable. We’re able to provide that.”
They feel that you can have a relationship with someone from behind a computer [via email], and this doesn’t make the relationship any less valuable.
Yetman adds, “They [directs and banks] might have us on technology, but we’ve got them on relationships. Strategically, brokers need to catch up on the technology aspect, and then we’ll knock them out of the competition.”
Targeting Gen Y
Attracting and retaining the next generation of clients is challenging, but not impossible. Some brokers are using social media, such as Facebook and Twitter to target Gen Y.
Others, like Boland, are redesigning their websites with the ability to provide online quotes.
“Eventually I want to be able to make it so customers can go onto our website and submit their change requests [for policies] to us online,” she says.
Robertson plans to take it one step further. He is currently in the process of updating the company website to include online quotes and policy change requests. However, he’d also like to offer clients the ability to report a claim online.
“We already have a 24-hour emergency claims telephone line, but I’d like to expand to the 24-hour service model online as well,” he says.
Another idea is to increase the number of young brokers in the office, as Poulin did. Peer relationships tend to encourage a higher retention and return rate, he says. Also, younger staff are familiar with using social media to communicate with each other in and outside of business, and senior brokers can learn from them.
“Use the resources that you have in your office to keep on top of what is available and used by Gen Y. Experiment yourself–host a blog, tweet on insurance,” says Poulin.
Additionally, brokers can approach local businesses and partner with them to obtain referrals.
“Our relationship with local realtors often brings us our first contact with new clients,” says Poulin. “We meet regularly with conveyance lawyers to discuss our mutual clients, and provide seminars for realtors in their own offices to help them prepare new clients for insurance.”
Lastly, brokers can talk to industry peers–find out what is working for others, and determine whether it might be something you can incorporate into your own business.
Word on the Street
Young customers confirm the Web is their initial stop when shopping for insurance
I purchased my home insurance from the Personal Insurance Company after researching online and finding they were the most reasonably priced. Prior to that I was with TD Meloche Monnex but switched after seeing the difference in rates. My buying habits are to research online, then call and speak to someone to get more information on the product. I look at price, what is included in the policy, and how reputable the company is. –Misha Kanji, 28
I buy my insurance policy from a company associated with where I work–you always get a better deal and a group discount. Right now I have auto insurance with TD Meloche Monnex. I always look at rates and what service the company offers. One key thing for me is actually talking to a representative and going through the policy. The terms are important because in many policies there is small print where X situation happens and your policy is void. –Gurjinder Minhas, 30
My auto insurance is through RBC. I look at the coverage–terms and conditions are important to check before you sign any documents. Then I look at price to see what I can afford. –Preet Bains, 29
I’m with Johnson Insurance, who specialize in home and auto insurance for professionals like me. It all boils down to the cheapest rate at the end of the day. I also look at the deductible and liability coverage. I do my research online, get quotes and compare companies. –Nuj Dhir, 27
My car and home insurance are from TD Insurance. I like to get quotes online, and compare the different companies to see which ones are providing special deals on insurance. Price, policy terms and conditions, and special benefits are most important when I decide where to buy. –Guneet Minhas, 24
Checklist to Attract Young Clients
Copyright 2010 Rogers Publishing Ltd. This article first appeared in the October 2010 edition of Canadian Insurance Top Broker magazine.
This story was originally published by Canadian Insurance Top Broker.