Life insurance innovation driven by Millennials
When it comes to innovation, developing products that attract the millennial generation seems to be within the top priority of several carriers as the millennial generation gains more buying power. The two largest generations today are the millennial (86 million) and baby boomers (77 million). Today, they control some $200 billion in annual American spending power and by 2025, millennial will account for 75% of the global market. Ad Age says that they will spend $10 trillion throughout their lifetimes. Driven by their communally large wallet, their expectations will define how our world works, including what insurance looks like in the future
According to the Nielsen research, Millennial are the least likely of each generation to use a local agent, preferring to go online to acquire a new policy, review statements, make billing inquiries, and file a claim. This disengagement with their carriers causes major challenges for insurance companies. When we consider that the number one cause of death between the ages of 1-44 is accident/injury, the need for a typical insurance blood profile for this generation comes into question. The risk profile and risk assessment for these millennial will need to be completely redesigned. According to the Gallup’s panel web study, “Insurance Companies Have a Big Problem With Millennial,” about 69% percent of millennial are either actively disengaged or indifferent with their insurance carriers. “Highly-prized” millennial seek convenience, agility and personalization from service providers, which goes some way to explaining why insurtechs are such a hit with the group, according to a new World Insurance Report from CapGemini and Efma.
Here are few insurtechs that have adopted millenial way of doing business:
- Haven Life offers a unique value proposition for term life insurance buyers: Its application and approval process is completely online and takes about 25 minutes, with coverage of up to $1 million starting right away for some customers. The company offers its term life nationwide to people up to age 65. (With many other insurers, you have to speak to an agent, complete a paper application, and often wait weeks for a decision.)
- Ladder offers great online term life insurance coverage with competitive rates, particularly if you want a policy with a face value over $1 million. You can apply for Ladder's life insurance coverage online and manage all aspects of your policy through its web portal. Though some applicants will need to take a medical exam before receiving an approval decision, many will receive a decision immediately, reducing the typical application time by several weeks. Ladder is also particularly convenient, as the company allows you to increase or decrease your policy size instantly online, as opposed to having to cancel and reapply for a new policy.
- Force diagnostics is advertising a Health Index Exam that can test for blood glucose, cholesterol values, and the presence of nicotine and HIV and transmit this data to insurers all in one sitting with the client. This effectively eliminates the need to send specimens to labs around the city plus saves time and money.
Millennial really are different. They don’t buy their father’s insurance and they don’t shop for it the way their parents do. Traditional insurance products just don’t match millennial lifestyles. And, almost no millennial wants to chat about his personal insurance needs with some guy who could be his father (or grandfather). Instead, millennial prefer the convenience and relative anonymity of shopping online for products that match their way of life. The insurance customer has changed. If you’re not already invested in building relationships with millennial, maybe it’s time to ask yourself, why not?