Traditional carriers have a big problem on their hands in terms of keeping millennial customers from switching to upstart rivals.
A large majority of millennials are open to switching to upstarts such as InsurTech startups, retailers and automakers, according to a new Bain & Company survey of 174,000 P/C and life insurance customers.
“Consumers, especially digitally active millennials, are very open to switching to another provider, including one from outside the industry,” the survey notes. “The question is: Are incumbent insurers ready for a new kind of competition?”
The survey found that 80 percent of U.S. millennials said they’d be willing to switch to these “insurgent” providers. That number surpasses 90 percent in China, the U.K. and Canada. What’s more, millennials are already savvy and ready about using tech to reach these equally tech-adept upstarts. About 50 percent of U.S. millennials are already using mobile devices for insurance research and interacting with their insurer, and the number surpasses 60 percent in China and the U.K., according to the survey.
As other studies have shown, Bain points out that traditional carriers often aren’t universally giving millennials what they want, contributing to millennials’ wavering loyalty. The study found that millennials value things like “affiliation and belonging” and “motivation,” and argues that traditional carriers fall short. There are exceptions such as USAA, which the Bain study asserts “excels at fostering a sense of affiliation and belonging” among its customers (U.S. military and their families).
The move to digital is reaching beyond millennials as well. According to Bain, most insurance customers in most markets use digital options for at least some of their daily transactions and quest for information. Along those lines, the proportion of customers who actively use digital has jumped more than 60 percent in the last four years, and mobile adaptation has jumped over 70 percent in just the last two months.
How to Keep Millennials From Jumping Ship
Bain said that insurers who reach millennials do so with digital “ecosystems” that help promote those feelings of “affiliation and belonging” among their customers.
Bain said that insurers can still keep younger customers from switching to the digitally progressive upstarts. The key: Active insurer engagement with their audience. Insurers who succeed in this area prioritize innovation and push to adapt quickly to today’s client needs, Bain said, because they understand “the urgency of the challenge.”
Bain’s full study is titled” Customers Know What They Want. Are Insurers Listening?”
Source: Bain & Company