Is Your Auto Insurance Marketing Millennial-Friendly? Here’s what You Need to Know
As more millennials enter the work force, they are purchasing more vehicles and will need auto insurance. By 2020, Millennials will comprise more than one of three adult Americans and it is estimated that by 2025, they will make up as much as 75% of the workforce.
While a certain percentage of millennials are part of the increasing number of Americans using public transit or biking for their commutes, 82% of American workers between the ages of 16 and 24 still drive to their job (Brookings Institution analysis). For insurance agencies, attracting millennials drivers requires a strategy that speaks to their needs, their channel preferences, and their lifestyle.
Common Misperceptions Millennials Have About Auto Insurance
Understanding the insurance industry, what policies cover, the amount of insurance needed, and other factors doesn’t come naturally for many consumers, millennials included. Addressing these knowledge gaps is important for agents when developing a strategy to which millennials can relate.
According to an article by CoverHound, some of the most common misperceptions millennials have about auto insurance include:
- Believing that they are covered for any circumstance.
Many mistakenly believe that full coverage also includes emergency roadside assistance, uninsured motorist, or other out of pocket damages.
- Rental car coverage is always included for accidents.
Many auto insurance policyholders automatically assume that their policy includes rental car reimbursement in the event of an accident or tow, which of course isn’t always the case.
- The color of a car can drive up rates.
Red sports cars will likely drive up rates because of the type of vehicle, but millennials may assume that the red flashy color is just as important in determining rate as the make, model, year, and engine size.
- Their current agent or insurance company is already getting them the best rate possible.
As we know, this is not the case – this may be the best rate that that particular company offers, but millennials need to be informed on the importance of comparison shopping and that your policy may just offer the nest coverage at the best price.
Be a Trusted Advisor but Also Focus on Digital Channels
According to a survey by Applied Systems, “Millennial consumers are attracted to insurance companies that provide the client-centric experience they have become accustomed to with other industries and businesses. However, millennials still highly value an in-person or over-the-phone experience with an agent.”
This is an important balance to strike, especially as millennials seek to better understand what they are purchasing and what their policy is covering. They value the human connection and will gravitate towards those insurance companies who take the extra time to inform and engage with this younger generation.
While most millennials prefer to interact with their insurance agent by telephone, they have a strong preference for digital and mobile channels to conduct research. On-demand, digital service is very important and many would switch insurance providers for access to better online service.
A J.D. Power 2015 U.S. Auto Insurance Study found that 25% of millennials would rather talk to someone in person or over the phone to discuss price changes, and 23% prefer in-person or phone interactions over the website channel when they have questions about their policy coverage. However, don’t underestimate the importance of the online experience – digital is extremely important for a variety of engagements, such as self-service options including one-time payments or ID card downloads.
Key Drivers of Millennial Online Customer Engagement
While purchasing directly from an agent is the key trend today, with 74% originally purchasing from an agent vs. 14% online, millennials are also more than twice as likely as all other generations to purchase online. While it is not mainstream today, this can transform the way insurance companies interact with customers in the future. Improving customer interactions online should be a strong focus for those insurance companies who want to boost engagement with this younger generation.
Gallup conducted a study identifying the key online drivers that help insurance agents improve customer engagement among millennials. According to the study, the top drivers include:
- 52% – Ease of payment features
- 50% – Keeping account and personal information secure
- 44% – Ease of managing account
- 43% – Ease of making changes to coverage
- 42% – Aase of access to information about policies
- 40% – Offering online services
- 35% – Finding answers to insurance questions
- 34% – Ease of navigating the website
While millennials are the largest generation in the U.S., many are just entering adulthood and the full force of their impact is yet to be felt in the marketplace. But auto insurers can get a start now by addressing this generation’s unique needs to ensure they can attract the millennial drivers already in the market, and have strategies in place to attract millennials yet to enter.
For more tips and best practices on how to acquire new customers with data-driven marketing and targeted segmenting by demographic and life changes, download our Insurance Marketing Strategy Guide.