THE CHANGING TIDE

Influx of younger consumers buying high-end homes creates wave of opportunity for agents

By Daniel Halsey

There is an emerging demographic of high-net-worth individuals—young adults. Millennials, ages 25 to 40 years old, are the most educated generation in history, have higher earnings than other generations, and are set to inherit more than any prior generation, according to a May 2020 report by the Brookings Institute. With built-up savings and a post-pandemic zest for making the most out of life, younger Americans are aggressively pursuing $1 million-plus homes, looking for more land, a place to call home, and even vacation homes closer to their primary residences.

As they buy their first homes, these individuals acknowledge they could use help when it comes to purchasing homeowners insurance protection. The Hanover recently conducted a survey with OnePoll that found that 61% of Millennials agree it would be helpful to have an experienced agent review their personal insurance to make sure they have the right coverages in place.

Unfortunately, the survey also found that they are less likely to have established trusting relationships with an independent agent. This is a large demographic that has been underserved and under-protected. With high asset levels, this group needs consultation with agents the most. These findings point to a growing opportunity for agents to connect with this demographic and help these new homeowners protect their investments, while growing their own businesses.

With the increasing need for personalized insurance offerings, particularly for higher-end homes, here are some ways independent agents can protect higher-value homes and autos for younger generations by attracting and retaining this demographic as customers:

• Boomer referrals. Existing Baby Boomer clients can be great referrals of their children or even younger colleagues. This demographic has typically been highly satisfied and serviced by independent agents for decades and can pass on wisdom of asset protection to the next generation. Consider targeting this audience with educational information for them to share with friends and family on the benefits of working with an independent agent.
• Industry partnerships. Investment planners typically have life-long partnerships with their clients and can be a strong referral source for independent agents looking to secure high-net-worth clients. Consider reaching out to these financial advisors to build relationships and explain the benefits they can share with clients about the proper protection needed for high-value homes. Realtors and mortgage brokers are another strong referral source as they are often the first industry professionals to be alerted to a potential home purchase.
• Innovative services. Younger generations expect convenience in all aspects of life and are looking for service providers that offer a seamless experience. These consumers expect digital tools with virtual claims adjusting and appraisals for quick service. Independent agents should work with carriers that offer mobile apps for policy management, extended customer service hours, the ability to research online, and provide personalized communications for an exceptional customer experience. Independent agents that can rely on enhanced carrier and technical services will experience more success with this digitally service-focused generation.
• Experienced counsel. Consumers purchasing high-value homes in the $.750,000 to $3 million range need a unique suite of coverage, but they don’t want to overpay. This demographic has lots of expenses and is often financially savvy, so independent agents that can discuss the unique needs of this demographic will build trusting, long-lasting relations that lead to business growth. Remind customers about flexible and broad coverage not just for the place they live, but for everything they care about inside it.

For agents looking to win the next generation of financially sound customers, it’s more important than ever to align with carriers who understand this market and can offer coverage and services this clientele needs. Their needs are vast, with The Hanover’s recent OnePoll survey finding that Millennials need to protect boats (16%), collectibles (29%), and their identity (53%). Look for carriers that rise to the higher level of service expectations and will partner with independent agents to solve the more complex insurance needs of high-net-worth individuals. As these younger generations enter one of the more expensive times of their lives with new higher-value homes, expanding families, and even paying off student loans, agents should offer a full risk assessment.

With the trend of younger Americans purchasing expensive homes set to continue, there is an untapped opportunity for independent agents to capture this demographic and offer coverage for their home, auto, and valuables. Now is the time to target younger customers as they are making big purchases and create valuable long-term customers.

The author

Daniel Halsey is president of personal lines at The Hanover.