November 22, 2018 by Jason Contant
Thinking of abandoning your brick-and-mortar stores to appeal to the tech-savvy younger generations who love to buy everything online?
Don’t just yet, suggests new research from broker management system provider Applied Systems and business intelligence research firm ORC International. Instead, try moving towards a hybrid approach, combining physical businesses with an omnichannel approach, using integrated digital technology that provides communication touchpoints across all channels.
“Millenials and Gen Z want fast, connected experiences, said the report, The Next Generations and Insurance: Understanding Buying Behaviors and Preferences of Younger Adults, released last week. “They make no distinctions between online and offline worlds, moving seamlessly between both. Thus, it’s extremely important for insurance providers to have an omnichannel approach to reach and engage these younger generations.”
Millenial and Gen Z customers are defined as those between the ages of 18 and 38. It is only through an omnichannel approach that insurers can effectively appeal to these “always-on” consumers who want to interact in real time via multiple channels.
“Millenial and Gen Z consumers are ready to do business 24/7 and insurance providers must be too,” said the report, which used a sample of just over 1,000 consumers in Canada (about 30% of those polled), the United States (50%) and the United Kingdom and Ireland (10% each). “These always-on consumers expect omnichannel service in real time via whatever channel they choose, be it person, phone, web or mobile app. To win and retain Millenials and Gen Z consumers, insurance providers must offer these generations the freedom to interact with their businesses anytime, anywhere, with access to insurance information, documents, online bill pay and messages at their convenience.”
The report studied the purchasing behaviours of these consumers for personal insurance (auto, home and tenants), preferred communication channels when interacting with insurance providers and selection criteria when choosing a provider.
Overall, the majority of Canadian Millenials and Gen Z (about eight in 10) had some form of insurance, with auto being the most commonly held (64%), followed by homeowners (35%) and tenants (22%).
Younger Canadians actually prefer interacting in-person when buying insurance and want to speak directly with a broker for auto and homeowners’ insurance. For auto, about half (52%) preferred in person interaction for auto and homeowners (51%) and tenants (47%) insurance. Online came in only at 19% for auto, 18% for homeowners and 23% for tenants.
“While using technology and staying connected and informed in as many ways as possible is inherent to these younger generations’ nature, they are still social beings who seek trusted advice face-to-face,” the report said. “The key is to enhance long-established human relationship building with the convenience and instant service technology provides.”
Family and/or friend referrals also play largely into these consumers’ purchasing behaviours for auto insurance, especially for younger adults in Canada and the U.S.
And once Millenials and Gen Z consumers have insurance, they prefer to communicate about their insurance with an actual person, whether by phone or in person. “While they love the texting, instant messaging and social networking that technology affords, these younger adults still value traditional communication methods.”