New research has found that nearly a third of millennials — those born between 1982and 2000 — qualify as urban professionals earning inexcess of $75,000 per year, according to Nielsen. That represents approximately 24 million U.S.consumers — a massive number by any stretch, and one thatcontinues to grow rapidly.

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The good news for auto insurance carriers offering usage-based insurance (UBI) is that thisparticular group of consumers has proven to be vastly moreaccepting of the telematics technology that makes UBI possible. Infact, a recent study by Nielsen points out that upscale millennialsare 79 percent more likely than the average consumer to use telematics programs.

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So how do you as an insurer engage this rapidly growingdemographic to increase participation in your UBI program? Here area few ideas.

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Related: Insurance customers: We'll give up our data forpersonalized service

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Driver with his UBI tracker

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Millennials want to do business with companies thatunderstand their preferences. (Photo:Shutterstock) 

1.  Make it a personalexperience

Millennials are drawn to products and services that are highlypersonalized, and are becoming increasingly more sophisticated whenit comes to doing business with companies that understand their preferences. To engage thisgroup, your safe driving rewards and value-added services shouldappeal to their wildly varying tastes and needs

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By understanding various sub-segments of this group, you canbegin to customize the UBI experience for dozens or even hundredsof sub groups. A 19-year-old college student in a small town inOhio may have significantly different needs and expectations than a24-year-old urban professional.

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To execute on this level of personalization easily andeffectively, you'll need access to rewards providers that canseamlessly integrate with your program, allowing you to configureand manage your safe driving rewards and incentives across multiplesub-segments in numerous locations. An open telematics platformthat is fully integrated with rewards providers and allows you tocustomize and configure programs via a non-technical, user-friendlyweb-based interface can put your UBI program ahead of themarket.

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passenger hanging outside of the car

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Millennials want to pay for insurance according to theirrisk profile. (Photo: Shutterstock) 

2. Appeal to their senses

Millennials are adept when it comes to socio-economic issues.Let's not forget, these consumers were significantly impacted bythe Great Recession. This group also views themselves as smartconsumers, feeling empowered by information. So when it comes toinsurance, they've likely done their homework, and will want toknow that the price they're paying is relative to their riskprofile.

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Related: Designing a UBI program for the 'average Joe'— andanyone else

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When you also consider that the average upscale millennial liveswithin a 10-mile radius of a major city, it's safe to bet they'vequestioned the need for even owning a car. Anyone who has everlived in or near a major city has pondered this question: If I'mcommuting to work on foot or via mass transit every day, and onlyusing my car on the weekends, should I pay the same for insuranceas those who drive a lot more miles?

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Integrating a "pay per mile" option into your UBI program couldaddress these concerns, enabling you to attract this covetedaudience segment. As we've seen recently with several insurersoffering this as an alternative product, "pay as you drive"insurance is growing exponentially and will only continue to doso.

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Remember, you're playing a long-term strategic game here; onethat benefits those willing to be boldly different when it comes totaking market share. Don't be afraid to meet your prospects wherethey are, and get them passionate about a more custom policy. 

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man holding money in his hands

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Millennial drivers may be more inclined to participate in aUBI program with the right incentives. (Photo:iStock) 

3.  Offer incentivesfor referrals and encourage your customers to become "ambassadors"for UBI

If we've learned anything from the high-flying success of socialmedia, it's that customer referrals are the lifeblood of successfor many companies, and the viral network effect can, and does,contribute to the growth and positive perception of products andservices deemed to be "share-worthy."

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Related: Telematics in insurance: beyondpricing

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Millennials make up the vast majority of social network users, and they are willing toshare their knowledge and experience with their networks. Up untilrecently, talking about insurance was at the bottom of that list,if on the list at all. UBI is changing that.

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To get in on this dynamic, consider creating a program thatincentivizes referrals, offering impactful rewards. You alreadyknow how much it costs for you to acquire a new customer, and inall likelihood, most insurers are willing to pay a lot more for onewho is statistically likely to have a much higher retention rate.Don't be afraid to get aggressive here and offer somethingmeaningful.

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Ultimately, as you think through your UBI strategy, you'll needto consider all of the audiences for your programs and thetechnology that will be scalable enough to support near- andlong-term initiatives.

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These ideas can help companies engage with a segment that isopen to what telematics may offer, but delivering on consumer expectations for thisgroup or others will be largely reliant upon an insurer's abilityto employ a flexible, configurable approach.

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Deke Phillips is principal consultant – telematicsfor CCC Information Services Inc., responsible for helpingauto insurance companies develop and deploy telematics and usagebased insurance programs, including the integration of telematicsdata into underwriting and claim workflows. Prior to joining CCC,he served as director, insurance data solutions for LexisNexis, andhas over 15 years of P&C insurance industry experience, servingin previous roles including AVP Underwriting with Chubb Insurance,vice president Global Risk Management with Marsh & McLennan,and director with AmTrust Insurance. He can be reached at[email protected].

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