The impact of technology on the insurance industry has been profound. As we move increasingly to an online infrastructure for sales and customer support, it is perhaps easy to assume consumers only want to be online and you can ditch the physical office you have downtown. Well, not quite according to a new study from broker management system provider Applied Systems.
Along with business research company ORC International, Applied Systems says brokers need to adopt a hybrid presence. Maintain a physical business but wholly embrace digitization throughout the organization. Such an omnichannel approach is likely to best appeal to younger generations of insurance customers.
“Millennials and Gen Z want fast, connected experiences,” said the report, The Next Generations and Insurance: Understanding Buying Behaviors and Preferences of Younger Adults. “They make no distinctions between online and offline worlds, moving seamlessly between both. Thus, it’s extremely important for insurance providers to have an omnichannel approach to reach and engage these younger generations.”
Younger generations of insurance buyers are classed as Millennial and Gen Z with ages between 18 and 38. This demographic is playing an increasingly important role in insurance evolution, not least in the move towards digital services. While connection online and through other technology channels is paramount, a physical presence can ensure customers have access whenever they need it.
“Millennial and Gen Z consumers are ready to do business 24/7 and insurance providers must be too,” said the report. Applied Systems and ORC International sampled over 1,000 consumers in Canada (about 30% of those polled), the United States (50%) and the United Kingdom and Ireland (10% each).
“These always-on consumers expect omnichannel service in real time via whatever channel they choose, be it person, phone, web or mobile app. To win and retain Millennials and Gen Z consumers, insurance providers must offer these generations the freedom to interact with their businesses anytime, anywhere, with access to insurance information, documents, online bill pay and messages at their convenience.”
In Canada, the majority of customers aged between 18 and 38 (around 80 percent) own at least one insurance product. Auto insurance is the most common (64 percent), followed by homeowners (35%), and tenants (22%).
Millennials and Gen Z consumers are at the forefront of evolving technology, but the study shows they also prefer to buy insurance person-to-person. Direct contact with a broker is something auto insurance customers (52 percent) and home insurance customers (51% prefer), while 47 percent of tenants prefer the personal touch.
Interestingly, the numbers who prefer online purchases are low, with 19 percent for auto, 18 percent for homeowners, and 23% for tenants. It seems while young customers are happy to use online resources for customer support and finding the best deal, they prefer to buy in a physical location.
“While using technology and staying connected and informed in as many ways as possible is inherent to these younger generations’ nature, they are still social beings who seek trusted advice face-to-face,” the report said. “The key is to enhance long-established human relationship building with the convenience and instant service technology provides.”