Millennials are often associated with presumptuous behavioural trends such as being impatient, easily bored and not having a planned life when compared to older generations. These qualities are often considered as obstacles in selling insurance products and services to this category of the population by sector experts.
However, contrary to popular belief, CEOs, managing directors and directors of top life insurance firms in India have said that millennials are not shying away from insurance products. Speaking at the ET Insurance Summit 2019, these top executives said that companies selling insurance need to change their products to suit the millennials’ mindset while being supported by changing the regulatory framework in the sector.
According to a study jointly conducted by Google and Max Life Insurance to enquire about millennial behaviour in the insurance category, over 10 crore searches emerged from India under which “term insurance” dominated about 60% of the searches. It also showed that more than 63% of these searches are coming from mobile phones or smartphones. Another interesting statistic was that there has been a 2.5X increase in the usage of online insurance premium calculators. In fact, the study showed that preferred branch searches were also going up.
Another Google survey on millennials has shown that over 91% of this population category thinks that insurance is an important protection tool. In fact, 41% of SBI’s Yono are millennials. Yono has a customer base of 2 crore.
However, the study also revealed a certain set of challenges including the time spent on these searches conducted via mobile. According to the study, the patience of a typical user wanes off in just three seconds.
This metric might not sound like a huge problem on its own but could be a potential board room discussion when we combine it with the changing demography of India. Nearly 1/3rd of India’s population falls under the millennial category and within the next decade, they will reach the decision-making age.
According to the CEOs who participated in the panel discussion, in order for insurance companies to grow their revenues, it is imperative that they capture mind space of these individuals who despite forming the largest and affluent proportion of the retail landscape, have never put insurance on top of their buying list. The reason why millennials have never put insurance on priority is because of uncertain employment patterns and budget for education, health etc is increasing significantly, experts said.
Working towards solving these challenges, the CEOs said that companies need to work in micro-segments offering better products that suit millennials. This is only possible when the company gathers enough data and runs analytics to offer the right products to the right people. Simply put, the key is to match supply and demand, the panellists said.
Some examples of the same include episodic short-term insurance such as adventure sports vs simple travel; rentals vs owning assets etc.
Another interesting area for companies is to understand a millennial’s emerging buying behaviour. Most people are researching products online and then buying them. Hence, CEOs feel that content should be great along with a great interactive experience via an app or website so that it is easy for millennials to understand what benefits the product offers.
Also, since millennials are buying online, service quality after sale of the policy is also an important metric to consider.