We've counted 10 million customers the insurance industry missed

By Jay Grayson and Kate Terry, co-founders, Surround Insurance

What if we told you there’s a 5-10 million person market for insurance missing from the industry data? And that they want to buy insurance, but our industry has failed to craft to products they need? Sounds unbelievable, right?

At Surround, we’ve found them, we’re building for them, and we’re taking insurance into the future.

Young professionals don’t have digital experiences – they live digital lives.

You’ve likely read articles out there talking up digital experiences for Millennials and Gen Zers. Your agency probably has a social media presence. Maybe you run some ads on Facebook, or you’ve documented your latest charity campaign on Instagram. And your staff is primed to respond however the customer wants – phone, email, text.

But what products do you sell to younger consumers, as they start their insurance lives?

Auto and renters with-the-hope-of-condo? These products hang out on your shelves, but do they entice younger customers in to talk to you?

No, they don’t.

Well, why not?

American adulthood used to have a trajectory – finish school, buy a car and the insurance to match, get married, buy a house and the insurance to go with it, have a child and buy the life insurance to protect your baby. That was a traditional life.

But life has fundamentally changed for young professionals, or better yet, has been changed by them. Modern young Americans increasingly live an asset-lite lifestyle focused on experiences, and everyone’s hustling to make a living.

We estimate that there are 5-10 million Americans who fit perfectly into this emerging lifestyle: they drive but don’t own a car, rent an apartment, and have a side hustle in addition to their full-time jobs. This hidden segment is underserved by the insurance industry because it isn’t defined by a product category. Let’s look at two different ways to count this market, bottom up, and top down.

Bottom up market sizing = 5-10 million people

Let’s start by taking a look at America’s cities. 25 American cities have populations of 200,000 or more renters under 35, according to the Census Bureau’s American Community Survey. That’s more than 5 million renters in just these largest cities. From the same source, 8 million households nationwide rent and have no vehicle available. And according to Upwork, one of largest freelancing platforms out there, 57% of the youngest workers freelance.

These are consumers who are living, moving, and working in new ways, and nobody is truly seeing them. While these numbers don’t line up perfectly, a market size of 5-10M of these customers seems reasonable when you include more than just the top 25 cities. We’ve also estimated this market by doing a top down analysis as well…

Top down market sizing = 5-10 million people

Let’s start at the top instead. The Census Bureau counts 80 million American Millennials, born between 1981 and 1996. Of these:

• 25%, or 20 million, have a drivers license but don’t own a car
• 75% or 60 million, rent their homes
• And 50%, or 40 million, freelance

And all of these numbers skew towards the cities, where car and home ownership are less common than in less dense areas. By our rough estimate, at least 5-10 million urban dwellers are living the renting, sharing, freelancing lifestyle - they drive rented or borrowed cars AND rent an apartment AND freelance.

Who insures this market?

So, the 5-10 million asset-lite professionals aren’t neatly counted in any of our industry’s newsletters and reports, but they’ve reshaped our urban economies, and they’re still waiting for our industry to reshape insurance to match them.

Digital marketing and distribution don’t fix this problem; this kind of digitalization is still dependent on traditional products. Rather, insurance products themselves need to be rebuilt. We need to dust off and enhance old products, add coverage that matches new exposures, and fit policies together as seamlessly as homeowners, auto, and umbrella serve a more traditional consumer.

This isn’t the work of Silicon Valley tech experts.

It’s our work. It’s a labor of love and a vision realized by those coming from within our industry and using the tools of modern technology and design to protect our customers.

It’s time to build.

And that’s why at Surround we’re creating a new generation of products for the generation that’s redefining modern life.

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.