THE TOP 5 ANTICIPATED INSURANCE BUYS FOR YOUNG SHOPPERS

Survey shows what a new generation thinks about risk and insurance

Overall, 51% of respondents stated that the

most important feature when purchasing an

insurance policy was the cost. A meager eight

percent said that convenience of purchase was important.

By Michael Wayne

If you are an agent who focuses on service, forging relationships with clients, and providing an easy digital method of purchasing insurance, you may want to pay attention and possibly rethink your approach to sales. Managing Director of Greenwald Research Eric Sondergeld recently released a study titled, “Perceptions of Younger Generations on Risk and Insurance,” and the results are a bit eye-opening in some aspects.

For clarification, Sondergeld’s conclusions were derived from a survey that he administered to 1,000 people who ranged in age from 21 to 42—Gen Zers and millennials. What likely won’t shock you is that, of those surveyed, less than half (41%) said insurance plays a large role in their lives or is important or necessary to have.

Only nine percent reported that insurance was financially necessary or helpful, while eight percent reported that insurance doesn’t play a role for them or that they do not have insurance of any type. Only three percent reported that insurance helps provide the medical support or services they needed.

Overall, 51% of respondents stated that the most important feature when purchasing an insurance policy was the cost. A meager eight percent said that convenience of purchase was important.

Regarding that last point, while it is unsurprising that younger generations prefer making purchases online, only about half of the survey respondents gave preference to buying insurance online. Coming in second in buying method was face-to-face, with telephone purchases third. In what may seem to some to be a twist, the youngest members of those surveyed, aged 21 to 23, were more likely than the rest of the group to buy their insurance in person.

According to Sondergeld’s study, younger buyers are invested in conducting personal research for determining how to purchase insurance. Some 26% stated they would conduct general online research, 18% would seek out information on insurance company websites, 17% would speak to or meet with an insurance agent or financial advisor, and another 17% would consult with friends or family about purchases.

Here are the top five anticipated insurance purchases that these young buyers are expecting to make over the next 12 months.

• 29%—Automobile Insurance
• 28%—Health Insurance
• 27%—Dental Insurance
• 23%—Life Insurance
• 18%—Home Insurance

Understand, I am not providing a full, deep-dive into the study here, and there are certainly more aspects that were taken into account. This included demographics other than age and gender, a risk self-assessment, and household income.

Just from this cursory glance, however, some of the data is a bit disheartening as it paints a sad and pessimistic portrait of the general outlook coming from these generations. For instance, according to the survey, 23% of respondents thought that they would die at some point during the next 10 years. I’m not sure that I recall another point in time when life insurance ranked higher than home insurance, renters insurance (12%), accident insurance (11%), or critical illness insurance (7%).

To be fair, 1,000 people is not a huge percentage of the makeup of millennials and Gen Z. As of July 2019, those two groups, combined with younger generations in America, totaled around 166 million. In case you’re wondering, the Gen Zers have been joined by Generation Alpha, which has its delineation marker at 2012, and will continue through 2025 at least. Presently, there are about 48 million of them.

Although it may upset some life and health agents, Sondergeld’s survey results provide us all with a teachable moment for younger insurance buyers and educate them regarding what coverage they actually need in the immediacy. Frankly, this illiteracy regarding insurance, particularly when it comes to personal lines, is not new and not limited to millennials and Gen Zers.

Overwhelmingly, if something around our home breaks, we are most likely going to call a qualified professional to come out and diagnose and fix it. They are the experts and see these issues repeatedly. It’s exactly the same for those of us in the industry.

We live the ins and outs of coverage daily. Insureds, if they are not properly educated, are going off of bad information more times than not that leads to a simple flowchart decision outcome—price is the only thing that matters. If you have a plumbing issue and your bathroom is flooded, I hope you aren’t basing your decision on how to get things fixed solely on price.

Take the time to educate your insureds about the “whys” of their coverage, what the market is doing, and how they can impact their cost. That includes direct contact with clients and getting their children involved before they are old enough to purchase insurance on their own. Talk to parents and their children about how life-changing events impact insurance—college, moving out, getting a car, starting a business, etc.

Show the younger generations that you actually care about them understanding the world, and it will make a difference.

The author

Michael Wayne is a freelance insurance writer.