Empowered by the internet and technology, Millennials are on a constant look out for that which is more convenient.
From on-demand taxi services to on-demand food delivery and on-demand entertainment, Millennials enjoy and are used to new levels of convenience, unlike any other generation before them. This trend has caught on with for insurance companies big and small, old and new, to embark on a journey towards convenience with terms like “digital transformation”, “personalizing”, and “on-demand” in a bid to stay relevant. Unfortunately, due to the nature of the insurance industry, this may be more challenging than it seems. In a digital world ruled by platforms with multiple offerings, does it mean insurance companies are left to choose to be the platform or hope to get on one?
The digital revolution has had significant impact on how businesses operate, customer expectations and on how goods and services are bought and sold.
While digital transformation continues to be the focus for insurance companies, the insurance industry can no longer assume that a digital experience is a differentiated experience. The reason for this is because the line between digital and non-digital is blurring for Millennials and future generations, making it difficult to differentiate a digital experience from any other kind of experience.
Here we have listed 3 must-haves to succeed with Millennials:
Seamless and digital. The choice to be able to do everything in an app or in the web browser or even pick up the phone whenever I want.
Convenient. I can inquire, purchase, cancel and make a claim all within my finger tips.
Affordable. I don’t pay more than necessary for the coverage that I need.
With power shifting from companies to consumers where consumers have an endless number of choices that are digital, convenient, and affordable, how do insurance companies stand out?
1. Differentiating Through Value
According to a recent Bain & Company Research, 80 percent of Millennials said that they would move their insurance business to new entrants that are capable of creating and delivering more value than incumbent insurers. As it stands, the bulk of the insurance industry is not meeting Millennial expectations.
But what is value? According to Bain’s framework, when consumers are evaluating products or services, they are going to look at the price and perceived value. What does it cost and what do I get for my money? The problem lies as companies tend to only focus on price as this is something they can easily understand and control. The question of what consumers actually value, and how much value do they attribute is more difficult to quantify.
2. Helping Millennials Think About Insurance in a New Way
Hard-selling, mis-selling, and claim rejections have resulted in a negative perspective of the insurance industry in Southeast Asia. The good news is today Millennials have easy access to the internet and are gathering most of their knowledge online. Insurance companies are able to craft creative content and leverage the latest trends to change the way Millennials think about insurance.
The Biggest Takeaway for Insurance Companies
As insurance companies continue working towards greater convenience and competitive pricing enabled by digital technology, they will be compelled to find new ways of differentiating themselves, particularly with Millennials and future generations. While technology will continue to be an essential tool for doing so, it is just one of the necessary keys. This is because technological changes are getting harder to impress Millennials as they have seen the world completely transformed by technology. With so many companies, apps, and devices competing for their attention, Millennials start to suffer from burnout and digital fatigue. Insurance companies instead must look to better understand the cultural, social, and economic context and create experiences for Millennials that deliver value where it matters - emotional, social, personal, and interpersonal. Meeting these basic expectations is the foundation of modern insurance, and a critical step for any insurance company that seeks to truly differentiate themselves.