Millennials have differing needs and preferences when it comes to insurance compared to mass market consumers. This needs to be kept in mind when developing products and services. Ownership of insurable assets among millennials is low due to the economic landscape they have grown up in making it hard to save. They are more likely to rent than own a home, are interested in car sharing, and they prioritize holidays and short-term experiences as opposed to longer-term goals. These factors mean that in some product lines standard insurance packages do not fit their needs. Millennials are also digital natives who prefer to access goods and services online and will favor technologically innovative insurance policies.
Millennials are less interested in driving compared to previous generations due to the associated costs of insurance, buying a car, and learning to drive. However, over 75% still have cover. Young drivers are higher risk and pay more for insurance compared to older drivers. Telematics policies dominate the under-25s market due to this to help them save money. Policies designed for car sharing and usage-based cover will appeal to millennials to better fit their lifestyles and help them save money.
Home ownership among millennials is lower than in previous generations. They are settling down later and the majority are privately renting as opposed to owning their own home due to financial constraints. Some millennials have been unable to move out from home at all. Millennials therefore have a greater need for contents insurance or simply gadget cover rather than combined or buildings policies.
Millennials are traveling abroad more often. Saving money to go on holiday is prioritized above saving for a deposit for a house or a retirement pot. Compared to older generations millennials have a greater desire to explore new cultures and take part in adventurous new activities while away. Longer-term travel insurance is an area relevant for millennials who are still at university or who are taking a gap year. Millennials also own lots of gadgets they will want to take away with them to document their trip on social media. Policies that offer longer-term travel cover for adventurous holidays and gadgets will thus be attractive.
Millennials are buying pets to bridge the gap before having children. Around half of millennials with pets have them insured. Pets are part of the family and millennials see their animals as an extension of themselves. At present there is no customization of pet insurance products. Policies are standard and designed for the pet as opposed to their owner. Policies that humanize pets and allow owners to interact through apps will be attractive to millennials. Pet insurance providers should look to make use of pets being a hot topic on social media to engage millennials, and look at services and products being developed for pets such as wearable fitness trackers.
The report “Targeting Millennials with Insurance” explores consumers who have not yet entered the mass market and identifies how millennials’ needs and preferences differ to the mass market and where the opportunities lie in targeting them. Moreover, this report helps to understand the differing values, behaviors, and insurance needs of customers aged 18-34 compared to the mass market, Improve customer engagement by recognizing what is most important to millennial customers and how insurers can adapt their products and services to meet their needs and this report identifies the leading providers by product within the millennial market and what they offer.
Companies mentioned in this report: Admiral, Aviva, AXA, Hastings Direct, Churchill, Tesco Bank, Barclays, AA, Direct Line, Metromile, Cuvva, Allianz, Belong Safe, Back Me Up, Insure A Thing, Trov, Alpha, The Post Office, Thomas Cook, Nationwide, O2, Petplan, Animal Friends, Asda, Pets At Home, Argos, Kennel Club, Healthy Pets, FitBark, PitPat, Bought by Many.
- There are 14.7 million millennials in the UK, which amounts to 28.6% of the adult population.
- Millennials are most engaged with car and travel insurance. This is because they are more likely to learn to drive and go on holiday before moving out from home. 75.3% and 61.6% of millennials have car and travel insurance respectively.
- Contents insurance is the most popular home insurance policy type among millennials. This is due to the fact that the majority of millennials live in privately rented accommodation.
Reasons to buy
- Size the opportunity that exists in the millennial segment.
- Understand the differing values, behaviors, and insurance needs of customers aged 18-34 compared to the mass market.
- Improve customer engagement by recognizing what is most important to millennial customers and how insurers can adapt their products and services to meet their needs.
- Discover the leading providers by product within the millennial market and what they offer.