Highlights
- As technologies evolve, so do the preferences of millennials, making them agents of change for many businesses, including insurance.
- To keep up, insurance carriers have designed simple and easy-to-use channels, leveraging digital, to retain and acquire millennial customers.
- Rich and engaging content with minimal touchpoints, such as that found in gamification, will help insurers win over this cohort.
In this article
Introduction
More than half of America’s population are millennials or younger.
This cohort has surpassed baby boomers as the nation’s largest living young adult generation. Evidently, this population segment is a critical target market for many consumer businesses, and insurance is no different.
Insurance carriers analyzing this population and their behaviors have discovered that millennials have a high propensity to switch their insurance providers. They must strategize millennials’ interaction models to address both retention and acquisition requirements. In doing so, insurance carriers must understand that this enigmatic and influential generation looks for various digital channels for purchases, policy services, or claims management. Simple and easy-to-use mobile applications or responsive web portals are most desired. Non-availability or inadequacy of such resources, primarily in the case of new business or policy services, prompt millennials to change their insurance carriers.
Insurance for millennials
Whenever millennials come across complex transactions along their insurance journey, they draw on their instinct to research and enquire in a do-it-yourself (DIY) mode to complete the transaction.
Given their tendency to multitask, millennials look for tech-guided solutions to help them navigate through a simplified process. They prefer interactions that are quick but without personal interventions unless the transaction gets complex. The only way to retain their attention is through rich and engaging content with minimal touchpoints. This is where insurance carriers will have to look at not just their technology but also their processes and redefine the overall customer experience with stimulating visuals powered by technology.
Insurers need to holistically redesign interactions around compelling processes in a simplified manner. For example, video messaging has become a game changer and has recently gained traction thanks to text format being redesigned as illustrations. Another example is automation of form filling and population of claims data to eliminate manual paper filing. Password-less authentication can go a long way in improving user experience for consumers with several sets of identities.
Simplified user experience expectations extend to other complex online transactions, such as fund switch, rebalance, and claim submission with relevant forms. To enable this, insurance carriers are re-engineering their business processes and their customer relationship strategies to align with the needs of millennials For example, many self-service portals are intuitively designed for customers and advisors for transactions that hitherto had manual interventions.
Adapting digital channels to millennials
Insurance carriers are adopting and integrating digital interaction channels specifically designed for millennials with their business models.
However, there is a tremendous transformation in the way products and services are packaged and delivered. Insurance carriers must constantly adapt to these transformations to survive and thrive:
Direct-to-consumer (DTC) channels
The drastic change in customer behavior, including increased online purchases prompted by COVID-19, is likely to continue in the post-pandemic world. With the growth of online channels, insurers are focusing on user experience and the overall customer journey with respect to new business models. To meet the evolving expectations of millennials, many insurance companies are adopting recommendation engines with intuitive interactions powered by artificial intelligence (AI) leading to an immersive experience.
DIY channels
Self-service portals in insurance are given high priority now, where customers are offered product evaluations and customizations, and they can make their desired selection from the product mix. Customizations are based on a high degree of personalization such as in the case of wearables which are helping underwriters assess individual risks with granular differentiation. These capabilities aid customers to make comparative analyses and informed decisions before they make an actual purchase or call the financial advisor.
Gamification
Despite increased focus on understanding customer behavior through AI and machine learning (ML), insurance companies continue to struggle in influencing these behaviors. Here, gamification can accelerate that understanding. However, to generate accurate insights, behavioral data needs to have broader coverage. Further, AI models need to be explainable to reduce and correct biases in historical data. Enabled with contextualized games and powered by design thinking, gamified interfaces enrich the digital experience for customers. Gamified experiences can be customized to fit the context of various insurance business lines. For example, a virtual game created in the metaverse can depict a journey full of goals and life events. A millennial user can learn to grow his or her retirement savings by playing a game of reaching goals.
Winning the customer of the future
Millennials’ preferences and expectations regarding customer experience keep changing as technologies evolve.
In that, they act as agents of change. Insurance organizations must not just consider their current digital needs and desires, but their evolving socioeconomic status as well. The ability of insurers to watch out for the evolving expectations of millennials and reach out digitally with intuitive tools of engagement marks the road to success amid competition.
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