We haven't even built the products for this 10 million person insurance market

By Jay Grayson and Kate Terry

We’ve talked to hundreds of Millennial and Gen Z professionals. They have reshaped broad swaths of the modern economy, from transportation (rideshare, bike share) to media (TikTok) to consumer preferences (ethical, eco-conscious brands). This 5-10 million member strong cohort is a creative, passionate, open-minded bunch, but they have real worries.

• Burdening their parents with their student loans.
• Supporting themselves if something goes wrong at their job.
• Paying their bills and getting back on their feet after an accident.

And 2020 has only made their lives more perilous. More of them than ever are working from home – their home environment and belongings matter. They are also doing more digital freelancing, as a supplement to their full time job, or as a hedge if they lose that job.

People in their 20s and 30s actively manage their risk. Really.

We’ve heard it repeated time and again by insurance industry “insiders” that people in their 20s and 30s are not concerned about risk, but is that true? Based on our interviews, we say no.

In fact, they actively manage their risk.

When we talk about personal insurance, as an industry we have generally focused on insurance to transfer risk of a fire, accident, or flood from our customer to the insurers we work with. But what tools have we given to young professionals who have big dreams that don’t include the ownership of stuff?

If you drive rented, borrowed, or shared cars, have we educated you about non-owned auto insurance? And have we made it easy to buy?

If you generate $15K a year doing freelance design, do we have crucial but lightweight commercial coverages available to you? Is completing the paperwork still a job unto itself?

And the idea that someone else is filling the need is also farcical. We’ve read through countless terms and conditions on the platforms that have replaced assets for this group – car share, bike share, and home share. The vast majority exclude any coverage for the user’s liability at all, and those that do provide shamefully little coverage.

So let’s not criticize this cohort for not buying insurance when we have not bothered to reformulate in a way they can easily buy it from us. Consider, instead, how actively they avoid or mitigate risk – and what it says about the unmet insurance needs for Millennial and Gen Z consumers.

Here are some common risk avoidance behaviors from our interviews:

• Choosing a longer bike route to avoid busy streets and parked cars
• Waiting for a friend with a car to make a run to a big box store and joining them to avoid driving
• Not commuting by bike even though they’d like to
• Paying a fee for a credit card because they believe the insurance that’s included will cover a rental car

Heck, we even talked to some interviewees who buy term life insurance because they’re afraid of sticking their parents with their co-signed student loans if something happens to them.

This is not a generation unaware of risk; this is a generation that has few tools to manage risk.

Insurance built on assets doesn’t work for people who don’t own assets

Insurance is the tool that every recent prior generation used to protect themselves. What’s stopping us from helping Millennial and Gen Z consumers buy insurance?

Change. Just change. We need to change our products.

Our lens is wrong.

The Property and Casualty insurance industry was built on durable assets…but these consumers don’t buy assets, and they still face risk.

They can piece together a handful of existing products that fit a traditional lifestyle… but the mix doesn’t address modern lifestyles.

And where the industry has innovated, we’ve offered narrow products aimed at a sliver of the risk this group faces.

A Facebook ad and a pretty website match consumer shopping preferences, but they don’t enhance what our industry sells to meet real consumer needs. And digital-only experiences don’t support that other pesky consumer need to reach out to an expert for counsel during big decisions.

What this market really needs is products designed for them, based on the way they are actually living, delivered through a beautiful digital experience and supported by knowledgeable counselors who are ready to provide support when it’s needed.

That’s what we’re building at Surround.

Surround Insurance gives independent agents the digital tools and innovative new products they need to stay competitive in a changing world. We’re an MGA building insurance starter packs that fill the insurance gap for consumers between college graduation and a major asset purchase like a car or home.