Gen Y customers—or Millennials—who comprise the largest group of homebuyers and renters in the United States, are more critical of their homeowners and renters insurance experiences than any other generational group, according to the J.D. Power 2014 U.S. Household Insurance Study released late last week.
The study examines overall customer satisfaction with three distinct personal insurance product lines: homeowners, renters and individual life insurance. Satisfaction in the homeowners and renters insurance segments is measured by examining five factors: interaction; policy offerings; price; billing and payment; and claims.
Gen Y consumers—which the survey reports defines as those born between 1977 and 1994—are the least satisfied among the generational groups with their homeowners insurance experience. Satisfaction with their homeowners insurer among Gen Y customers averages 755 (on a 1,000-point scale), while satisfaction with their renters insurance provider averages 784.
In contrast, satisfaction with homeowners insurance is highest among Pre-Boomers (born before 1946) at 846, and satisfaction with renters insurance is highest among Boomers (born 1946-1964) at 829.
Comparing the two largest generational segments, homeowners satisfaction among Gen Y customers is lower across all five study factors than among Boomers, most notably in interaction (-63 points) and claims (-59).
“Millennials are a critical demographic for insurance companies, given that they are the largest group of homebuyers and renters,” said Valerie Monet, director of the insurance practice at J.D. Power, who also discussed life insurance findings and noted that millennials are the largest group of prospective life customers.
Insurers in all of these product categories need to “adapt their business model to meet the needs of this large segment, which often involves evaluating the usability of their website and finding new ways to communicate with customers, such as through the use of email, apps and online chat.”
She said insurers that are most successful in understanding and meeting the expectations of Gen Y customers have a higher rate of executing on the following service practices than insurers less successful in understanding Gen Y needs:
- Informing customers of other products and services
- Providing access to policy information online
- Ensuring complete understanding of the bill.
- Limiting bill errors
- Resolving issues in one contact
- Limiting customer-reported problems.
“In short, insurers benefit from ensuring that their Gen Y customers are well informed, and that there are no issues or problems in servicing their policy,” said Monet.
The 2014 U.S. Household Insurance Study is based on 22,934 responses from customers who have one or more of the following insurance product lines: homeowners; renters; and individual life insurance. The study was fielded in June and July 2014.
Source: J.D. Power & Associates
For customer rankings of homeowners and renters insurers, see related article, “Homeowners More Satisfied with Insurance in 2014; Amica Reigns.“