Technology is posing a risk to insurance, and it’s not just from cyberthreats. When any new generation comes into prominence, it can bring along drastic, sweeping change that affects nearly all aspects of society. Generation Y, known as the millennials, is on the verge of making its mark, and insurance providers must be ready.
Meet the millennials
Millennials interact with insurance providers 2.5 time more than other generational customers.
The rise of the millennials comes at the same time as rapid technological growth. Consequently, this generation is far more comfortable with the latest tech. While things like social media seem like a novelty to older consumers, they are an important utility for millennials. According to research from Goldman Sachs, 34 per cent of millennials have a more favourable view of a brand that maintains a social media presence.
This comfort with connectedness is something insurers must be ready to accommodate if they wish to keep millennials satisfied.
As a generation used to accessibility, millennials demand more from companies when it comes to customer service. According to the World Insurance Report 2016, millennials interact with insurance providers 2.5 time more than other generational customers. They also expect more from their providers when it comes to social media; 32 per cent use social media at least once a month for insurance needs.
Risk and opportunity
Insurers who don’t meet customer needs stand the chance of losing them, and the risk of this appears to be higher with millennials. Based on data from the World Insurance Report, Australian insurers are not satisfying these customers, whether through traditional or digital means. Only 36 per cent of millennials, compared to 52 per cent of others, reported a positive experience with their insurer through a traditional channel in 2015.
In an indication of the lack of readiness to handle new technological customer service points, insurers did even worse when handling customer service through a digital path; 29 per cent of millennials had a positive insurer interaction this way in the same period.
With a digitally focused climate, this is dangerous for insurers. Non-traditional insurance providers could pose a threat to more established firms, especially those that have an effective online presence.
In developed Asia-Pacific nations, 20 per cent of millennials in the World Insurance Report said they would consider purchasing insurance from technology companies. Though a small percentage, this is causing worry among insurers, 41 per cent of whom see Google as a future business threat.
Technology changes quickly. and providers from business insurance to landlord coverage must change with it as millennials form more of their customer base.