The Millennial Gap: Are Insurance Companies Too Old for this Generation?
According to the Insurance Information Institute, only 41% of renters have insurance, compared to a whopping 95% of homeowners. Why is there such a massive gap? Why have insurance companies had such success attracting homeowners, but failed so miserably at luring renters?
While there are several contributing factors that may help explain the discrepancy, the most significant reason is clear: insurance companies are simply not connecting with millennials. As the millennial generation inches its way into the housing market, insurance companies continue to neglect the ways millennials absorb marketable information.
Since the conversion rate for renters insurance policies is so low, insurance companies are understandably hesitant to invest resources into policies with low-profit premiums. While millennials seem so disinterested in renters insurance, the prospect of refocusing marketing resources appears to pose high risk with little reward.
As we can see from market statistics, a large portion of the renters market remains untapped, and there are several actions companies can take to unleash its potential.
How has the insurance industry changed?
While selling insurance was once a matter of sitting down at a potential client’s living room table and discussing the policy’s specifics over a cup of coffee, millennials handle their business in brand new ways. The question is, how can insurance companies attract millennials? How can the industry show millennials that renters insurance is a beneficial expense?
Why are insurance companies neglecting the renters insurance market?
While it might not seem like there is a logical argument for insurance companies to neglect the millennial market, they have their reasons.
Completely redesigning a marketing strategy is an expensive and timely undertaking. Planning a new campaign can take months of work. For companies that feel like the relatively low premiums of renters insurance aren’t worth the risk, a lengthy and money-draining process doesn’t seem like an attractive business decision.
What insurance companies forget to take into consideration is that millennials are slowly transitioning from renters to homeowners. If insurance companies want to be ahead of the curve, the time to realign their focus is now. Insurance companies that decide to remain mired in the past will soon see the future passing them by.
Now, let’s explore the ways insurance companies can attract the attention of millennials.
How can insurance companies attract millennials?
Millennials have always been a hard nut to crack. To them, insurance just seems, well, boring. And to be honest, they’re right.
Many insurance companies have failed to make the necessary adjustments to become attractive to the newest generation of renters, even in the most basic ways – like what language to use. Instead of discussing ‘insurance coverage’ and ‘cost of policy,’ insurance companies are much better off reverting to explaining value to millennials – answering basic questions that most individuals new to renters insurance will ask from ‘how much is my stuff worth’ to ‘what is personal liability’ and ‘how do I make a claim.’
If you wish to communicate with a specific cohort, first and foremost, use a language that they can relate to. On top of that, there are several actions that insurance companies can take to attract millennials.
- Utilize Social Media: Almost 90% of millennials are currently active on social media. If an insurance company is not using social media as a means of reaching out to active renters, then it is doing itself a disservice. Most recently, millennials are flocking to image-based social media services, such as Instagram, Snapchat and Pinterest. Every single major social media network has marketing options which allow companies to reach out to targeted demographics. Social media should be a priority for any company trying to reach out to the younger generations.
- Video Content: The internet has made us all less patient, millennials more than others. As a result, our brains are hard-wired to be attracted to certain types of content. Video content is a great way for insurance companies to attract millennial customers. Our modern eyes are drawn to the immediacy of the movement and color of video. Video services, such as YouTube and Periscope, allow companies to personally reach out to their customers.
- Stay relevant: Millennial culture moves at the speed of light. Odds are, if you’ve already came across a specific internet meme, it’s probably well on its way to its expiration date. Millennials tend to lean towards businesses they feel understand them. Some of the most impactful companies on social media are the ones that keep up with popular trends.
- Focus on the benefits: Alluded to above, a major factor contributing to the poor sales of renters insurance is a lack of knowledge. If insurance companies could find a simple, easy way to communicate the benefits of renters insurance to millennials, they would be much more apt to consider a policy. Educating millennials about the many benefits of renters insurance is probably the most effective marketing opportunity.
If insurance companies utilize all of the amazing new internet marketing tools at their disposal, there is no reason why attracting millennials should be considered an impossibility. Once the industry figures out how to tap the potential of the millennial market, the profits will start flooding in.
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