Editor's note: Alex Tsetsenekos is vice president and general manager of home insurance with LexisNexis.
Whether you call them Millennials, Gen Y, or the echo-boomer generation, young buyers 18 to 34 years old constitute 27% of the U.S. population, with $1.3 trillion in annual spending. The 80 million strong market segment is the single largest demographic in the U.S. today, according toDeloitte's 2010 report "Generation Y and the Insurance Industry."
And Millennials will be the next wave of homeowners, the study predicts. Although only 35% were homeowners in 2010, that number is projected to increase to 67% by 2015. As the housing market continues to recover, Millennials will step into a homeownership role, increasing the volume of personal lines insurance opportunities for agents and brokers.
Yet like every generation, Millennials bring a distinct set of challenges. They have fervently embraced the digital era, constructing a life and relationships through social media, mobile technology and the Internet. Driven by technology, they greatly value convenience, expecting instant information and shortened wait times. This means the insurance industry must provide a faster and more streamlined insurance quote.
In the world of homeowners insurance, the current average wait time for a quote is at least 30 minutes. In the adjacent market of auto insurance, prospective customers can receive quotes within a 7- to 15-minute window. Agents and brokers, aware of the opportunities that will be lost due to delayed quotes and cumbersome administrative overheads, will tailor their systems to provide a more user-friendly and responsive interaction. Leveraging mobile technologies that will transform the experience of both consumers and producers will prove to be a distinctive competitive advantage.
Homeowners' insurance is complex in terms of quoting, underwriting and pricing. Carriers need accurate information to build a complete risk profile on both the consumer and the structure.
What can an agent do? The first step is to develop an Internet presence and deploy self-service web applications that generate an automated quote with minimal information supplied by the consumer.
Another key component is to arm themselves with data and analytics. A data prefill solution, for instance, can meet those needs by assembling information available from external sources and significantly improving the time to develop a quote. Drawing on a sophisticated database that analyzes factors such as property characteristics, roof age, building permits, policy data and household composition insurance companies, with confirmation from the consumer working with agents or brokers can get a head start on evaluating the consumer's profile faster and more accurately.
What's the benefit? Agents can enjoy a closer relationship with the customer and assume the lasting role of trusted advisor, especially when fostered over digital channels. The prefill solution permits agents and brokers to focus on the needs of the customer by minimizing the amount of information requested on an insurance application.
What does this mean for you and your customer?
- Ease of doing business with your agency. Insurance products and services that request a substantial amount of detailed consumer information up front have an antiquated view of improving the ease of doing business for both consumers and producers. Limiting the amount of information the consumer is expected to recall or register, can help you better quote and match the consumer with the right insurance carrier faster. Specifically for this demographic, pair them with an insurer that uses the latest technology that accelerate the policy application process, thereby valuing their time.
- Improve the customer/agent/broker experience. Provide the consumer with a web-based application, agnostic of device that can be quickly accessed on the internet, and affords an intuitive user interface. Expand the capabilities by offering a self-serve model that would empower the consumer to manage and monitor their accounts on-line, including but not limited to invoices, payments, claims, questions/concerns and important push notifications. What's more, your attention to what is required of them demonstrates that you truly are a trusted advisor.
- Leverage the mobile platform. More than 700 million smartphones shipped worldwide in 2012. Over 133 million people in the U.S. owned a smartphone as of first-quarter 2013. Tablets hit 10% penetration of the market in less than three years, faster than any technology ever. The personal computer market is steadily dwindling and giving way to smartphones and tablets. Implementing, supporting and enhancing mobile technology will be an indispensable tool catering to the new demographic, and also improving the efficiency of the producer workforce today and into the future.
The number of Millennial homeowners is growing and with it, the volume of quotes demanded. With the great expectations of this generation comes great opportunity for the agent and broker. By applying seamless data to lift the burden from the customer, the agent can improve the overall experience and build a stronger relationship with the customer.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.