Millennials, an article in Time magazine says, are "selfish and entitled," while Forbes refers to them as "the best generation of workers," but in P&C insurance they're beginning to be called the future of the industry.
Insurers are currently grappling with an aging workforce and looking to increase their market share.
In both of these endeavors, millennials have been identified as a key demographic for attracting new customers and employees. However, engaging and retaining these workers presents a unique set of challenges. By implementing new technology, streamlining processes and employing strategies designed to appeal to millennials, companies can successfully overcome the generation gap.
Shrinking workforces and growing markets
The insurance industry as a whole may soon enter an age-induced crunch. According to the Bureau of Labor Statistics, 25 percent of insurance employees are over the age of 55. As these workers begin retiring, companies must find workers to replace them. Unfortunately this will prove challenging for many insurers, as a 2015 report found that only four percent of millennials were interested in the insurance field.
Even when insurers manage to hire these employees, they don't stay for too long. The results of a LinkedIn survey noted that these young professionals tend to change jobs four times within their first decade of entering the workforce.
While these statistics may have insurers cursing millennials under their breath, any youth-induced rage should be tempered by one fact: This generation presents a huge business opportunity for insurers.
Aside from overtaking the baby boomers for the title of America's largest living generation, they're also the most underinsured generation. That means P&C insurance companies who ignore the needs of millennial customers will be passing on increased revenue, market share and customers. Now for the bad news — millennials engage with their insurers the least compared to any other generation, making them less likely to bundle insurance policies and more likely to change from one insurer to another.
This picture of millennials as job-hoppers with no desire to buy or work in insurance may seem to spell doom and gloom for the industry. However, this is not the case. It just means that insurers must do what they've always done — change, adapt and evolve with the times.
Millennials spend an average of three hours a day on their smart phones. (Photo: Shutterstock)
A new approach
The strategies for meeting millennial needs as employees and customers are remarkably similar. By implementing technologies that eliminate the redundant tasks associated with insurance purchases or employment, redesigning consumer and employee processes so goals get accomplished faster and creatively addressing other needs, insurers can capture the notoriously fickle loyalty of millennials.
Winning over the smartphone generation
An enduring characterization of millennials is that they're constantly on their phones, losing themselves in a sea of selfies, emojis and Twitter notifications. There's some truth to this, as research shows that this age group spends an average of three hours per day on their mobile devices.
One essential fact often gets overlooked by this stereotype — smartphones are very useful. During those three hours of screen time, millennials can digitally run their errands by buying products on Amazon, email their boss, have their bank transfer funds from a checking account into savings, or yes, even get an insurance quote.
After spending almost 15 percent of their day in an online world dominated by easy-to-use apps, this generation of employees and customers will bring a set of expectations with them to insurers. Most of all, millennials want to be empowered by technology.
For insurers, the millennial affinity for technology is a double-edged sword when it comes to employees. These younger workers will be more adept at using newer cloud-based systems that allow customer service representatives (CSRs) to manage claims or resolve issues end-to-end. However, this also means they have little patience for clunky, outdated systems.
All generations can appreciate a seamless experience
The same is true for insurance customers. Technology enables millennials to stay informed about nearly every aspect of their lives, and they have the same expectation for their insurance. This need could be met by implementing systems that send out automated messages with new information on their policies or claims.
Upgrading a legacy system to one that features these capabilities is often a time- and cost-intensive process. However, the results from investing in IT upgrades can pay dividends through efficiency improvements and customer satisfaction. When a person calls the insurance carrier after a car wreck, the CSR pulls up the customer's data and then arranges a tow, a rental car, and a repair date, answering all of the claimant's needs in one call. The customer then receives automated messages with updates on the status of the vehicle while it's being repaired. Both the employee and the customer have a seamless experience, something people from any generation can appreciate.
Technology is changing customers' and worker's expectations — they expect information immediately. (Photo: Shutterstock)
Do more, faster
Another side effect of technology is that millennials are used to immediate gratification. They want the ability to solve problems instantly. While this tendency has resulted in a reputation where young people don't seem to value patience, insurers looking to process claims faster can actually use this trait to their benefit.
Today's customers expect responses to their questions, concerns and requests within a 20-minute window. Aside from technological interventions that speed up workflows overall, companies must consider the mediums they use for communicating with their customers. One method growing in importance is social media, which offers an instant, engaging, two-way street for insurers and customers.
From a millennial customer-centric angle, a positive experience to interacting with their insurer serves as an organic way of boosting their exposure with prospective insurance buyers. Millennials trust user-generated reviews and content more than any other demographic. If they see one of their peers believes in their insurance company enough to leave a review, they'll be more likely to seek out that company when looking for a new policy.
As for employees, millennials are actively seeking employment where they can use Twitter, Facebook and other platforms as part of their jobs. A report found that younger millennials were more likely to want to be social media leaders in the future. Offering positions that include a degree of social media interaction can make a job more attractive for this generation.
Building a working relationship
Much has been said about millennials requiring that their jobs provide them with a sense of purpose. Supposedly, if they don't feel like they're making the world a better place at work, younger professionals will switch jobs. However, this isn't necessarily the case. Millennials, Gen Xers and baby boomers are two times more likely to switch jobs to work in a better paying, more innovative environment.
The answer isn't offering more perks at work, although that doesn't mean pool tables, on-site yoga classes and a cafeteria providing gourmet fare won't make millennial employees happy. They just shouldn't be offered in place of what employees really want out of a job: A variety of career opportunities, good benefits, competitive salaries and leadership opportunities. Build a solid foundation off of these elements, and then start worrying about whether to install a juice bar in the break room.
There's no one-size-fits-all solution for engaging millennial employees and customers. Some will be lazy, entitled and endlessly scroll through Instagram when they should be working. Others will be the hardest working people at the company, bringing innovative ideas and boundless energy.
Implementing new digital interventions, streamlining processes and designing new ways of engaging employees will produce results with demographics far beyond millennials. All insurance customers and employees can benefit from being empowered, whether that's providing the ability for straight-through claim processing or adding a new vehicle to an existing insurance plan almost instantly using an app.
By using these strategies, P&C insurers can build loyalty, increase efficiency and decrease costs — valuable accomplishments regardless of what age employees or customers might be.
Kristen Hein is a vice president with New York City-based EXL, a provider of decision analytics, operations management, outsourcing, business transformation and IT services. Contact her at lookdeeper@exlservice.com.
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