Millennials' View on Insurance and Finance

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Millennials and Insurance Trends

Increase in auto insurance shopping index, target marketing for millennials in the renters insurance space, regrets by millennials related to hidden costs/homeowners insurance, and millennials using independent agents to buy insurance are some of the trends surrounding millennials and insurance.

Trend #1: Increase in Auto Insurance Shopping Index

  • According to TransUnion’s Auto Insurance Shopping Index, 21.7% of consumers were shopping for personal auto insurance in 2018, up from 20% in 2017. Auto insurance shopping saw an increase among all generations in the last year.
  • A recent study by Reviews.com also found that millennials pay more for auto insurance than drivers of any other generation. “Lower credit scores than older generations cost millennial drivers more; on average, millennial drivers with a “fair” credit score will pay 25.6% more than millennial drivers with an “excellent” credit score.”
  • The rise in consumers shopping for auto insurance is as a result of insurance carriers increasing their advertising spend.

How it Applies to Millennials

  • “Millennial and Gen Z consumers are shopping 44% more than consumers of other ages.”
  • Millennials reported an increase from 4.6% in 2017 to 4.9% in 2018 in auto insurance shopping.
  • According to TransUnion’s research, “this is a continuation of trends observed in 2018 when subprime consumers were 68% more likely than prime consumers to shop for personal auto insurance.”
  • The study by Reviews.com analyzed 55 million sample rates spread across 34,000 ZIP codes in all 50 states and found that on average, millennials pay $1,753 annually compared to the $1,395 paid annually by drivers of older generations.

Share of Millennials The Trend is Applicable to

  • Millennials and Gen Z consumers comprise 39% of the consumers shopping for auto insurance in 2018, up from 35% in 2017.
  • According to Agent for the Future report, 52% of millennials purchased auto insurance through an exclusive or independent agent, and 36% millennials reported buying auto insurance online.

Trend #2: Target Marketing for Millennials in the Renters Insurance Space

  • There was an increase in renters in the U.S. between 2009 and 2017. The population of American households that paid rent went up by 15% to 43 million.
  • Millennials are less likely to have homeowners/renters insurance compared to auto insurance. Even though millennials are renting longer and not due to lack of interest or inability to afford a house.
  • Millennials are also less likely to use a local agent; and prefer going online to acquire a new policy, review statements, make billing inquiries, and file a claim with carries having a strong online presence.
  • Millennials purchasing homes is affecting the rental market, which is creating a shift in focus by the property managers and landlords on Gen Z.

How it Applies to Millennials

  • “Millennials are twice as likely compared to other generations to purchase and interact with insurance companies solely online.”
  • Companies like Rhino help get rid of security deposits, with a $5/month insurance plan that allows renters to save money and protects landlords as well.

Share of Millennials The Trend is Applicable to

Trend #3: Millennials More Likely to Buy Flood Insurance

  • A recent survey by the National Association of Insurance Commissioners (NAIC) found that millennials are more likely than their baby boomer and Generation X counterparts to obtain flood insurance.
  • The association survey also reveals that across all demographic groups, 41% of respondents agree or strongly agree that flood insurance is a “good idea.” but only 17% of those responding have purchased flood insurance.

How it Applies to Millennials

Share of Millennials The Trend is Applicable to

  • Millennials are three times more likely to have bought flood insurance than their baby boomers.

Trend #4: Regrets by Millennials Related to Hidden Costs/Homeowners Insurance

  • “Millennials are increasingly making decisions that, due in part to the size of their age group, will likely have lasting effects on property/casualty insurance.” This will, in turn, have a significant impact on homeowners insurance.

How it Applies to Millennials

  • Millennials do not want to deal with hidden homeownership costs.
  • This is mainly due to the hidden fees, including insurance, property taxes and closing costs accounting for 2% to 5% of the home price.

Share of Millennials The Trend is Applicable to

  • According to a new poll of about 1,500 homeowners from Bankrate, 63% of millennials have regrets about purchasing their current home.
  • According to Agent for the Future report, 58% of millennials purchased home insurance through an exclusive or independent agent, and 30% bought homeowners insurance online.

Trend #5: Millennials Use Independent Agents to buy Insurance

  • “Millennials want their agent to be a seasoned insurance professional who can help them understand insurance and become informed consumers.”
  • Millennials are also more likely to research and connect with agents through digital channels but are known to value the input of an expert advisor.

How it Applies to Millennials

  • 81% of millennials plan to use their current agent again to buy auto or home insurance.
  • 50% of millennials want to work with a seasoned insurance professional, while 9% want to work with someone close to their age.
  • 50% of millennials also want someone who inspires trust whereas 29% want someone that makes a point to get to know them.
  • 52% of millennials purchased auto insurance, and 58% bought home insurance, through an exclusive or independent agent.

Share of Millennials The Trend is Applicable to

  • Approximately 67% of millennials say they are satisfied with their agent, and 83% say they trust their agent.
  • 80% of millennials want their insurance agent to help them understand their insurance.

Research Strategy

To provide 5-7 trends surrounding millennials and insurance regarding auto, home, and renters insurance, we scoured through the industry reports and publications from sources like Business Insider, Global News wire, Forbes, Value Penguin, CNBC, among others. We then used the insights related to trends and how millennials are impacting the market segment from sources within the last 12 months. The trends highlighted in our research were mentioned as trends in two or more industry reports, articles, blogs by industry experts, and publications.

Sources
Sources

Quotes
  • "The number of consumers shopping for personal auto insurance is on the rise, driven largely by the youngest generations. The newly released Auto Insurance Shopping Index from TransUnion (NYSE: TRU) revealed that 21.7% of consumers were shopping for personal auto insurance in 2018, up from 20% the previous year."
Quotes
  • "The study analyzed 55 million sample rates spread across 34,000 ZIP codes in all 50 states and found that, on average, millennials pay $1,753 annually compared to the $1,395 paid annually by drivers of older generations."
Quotes
  • "Millennial and Gen Z consumers played a large role in auto insurance shopping increases, as they made up 39% of the consumers shopping for auto insurance in 2018, up from 35% in 2017. (Photo: Rawpixel.com/Shutterstock)Millennial and Gen Z consumers played a large role in auto insurance shopping increases, as they made up 39% of the consumers shopping for auto insurance in 2018, up from 35% in 2017. "
Quotes
  • "But one question that hasn’t been explored in the face of this trend is how millennials “growing up” and purchasing homes will affect the rental market. It makes sense that property managers and landlords will start to shift their focus to the next up-and-comers: Gen Z."
Quotes
  • "The two largest generations today are the millennials (86 million) and baby boomers (77 million). Americans aged 50 and over will represent approximately half of the U.S. population and control 70 percent of the nation’s disposable income by 2017. "
  • "And by 2025, millennials will account for 75% of the global market. These are two generations that represent huge opportunities for insurance companies. By understanding their distinctive traits and implementing these insights into the sales cycle, prime prospects can be turned into profitable customers."
Quotes
  • "Single-family rental homes are a hot commodity - and millennials and baby boomers alike are snapping them up, reported Diana Olick for CNBC."
Quotes
  • "Many millennials don't yet have the capacity to put away meaningful savings. More than half of millennials don't have a retirement account, and more than half also have less than $5,000 in their savings account."
Quotes
  • "Renters rising: Between 2009 and 2017, the population of American households that pay rent has gone up by 15% to almost 43 million. In the same period, the number of homeowners increased by just 0.7% to 75.8 million."
Quotes
  • "Millennials are not only nearly three times more likely to have purchased flood insurance than their Baby Boomers but they are also more likely than Gen Xers born between 1965 and 1980 to purchase flood insurance (25% vs. 16%)."
Quotes
  • " The Federal Emergency Management Agency (FEMA) estimates that only about 3% of homeowners have flood insurance."
Quotes
  • "Some of the difference between the 17 percent saying they had flood insurance and the 3 percent of the population that actually does may be attributable to a common misunderstanding. “This disparity perhaps reflects the common, though incorrect, assumption that homeowners’ insurance covers flooding,” commented NAIC president and Maine Bureau of Insurance superintendent Eric Cioppa."
Quotes
  • "Nearly two-thirds, or 63 percent, of millennials (ages 23 to 38) say they have regrets about purchasing their current home, according to a new poll of about 1,500 homeowners from Bankrate."
Quotes
  • "Millennials are increasingly making decisions that, due in part to the size of their age group, will likely have lasting effects on property/casualty insurance."
Quotes
  • "The majority of millennials are open to working with an IA, and those who do report high levels of satisfaction. Independent agents can offer millennials the ease, choice and advice they need to make wise insurance decisions, but IAs may need to adopt new tactics to reach younger consumers and demonstrate the unique value of independent agents."
Quotes
  • "Only 31% of millennials want the lowest-priced coverage, compared to 29% of Gen-X and 18% of baby boomers, according to Liberty Mutual and Safeco’s Understanding Millennial Insurance Consumers study."