Insurance Agents for Millennials and Gen Z

The first substantial decision we made when we started Surround was to be all-in committed to the independent agency channel.

The venture capitalists at the big funds said InsurTechs should go direct. Even some entrepreneurial friends said the same thing.

But they don’t know insurance. We do. And they haven’t talked to customers. We have.

Take a look at younger consumers. They don’t own a lot of assets, but they are exposed to (and worry about!) risk as they carshare, rent apartments, and freelance on the side. And buying insurance isn’t easy for them, in part because existing products don’t fit their lifestyles well.

What happens when you interview hundreds of them? And also their parents, and a whole lot of independent agents, too?

Younger consumers actively manage risk

Despite popular belief, younger consumers manage risk in sophisticated ways. We spoke with more than one young adult who introduced complicated logistics into their lives to avoid driving a borrowed or rented car. And others who bought term life insurance because they were concerned that their parents would get stuck with their massive co-signed student loans if something happened to them.

The insurance products these customers need aren’t readily available. Older products, like nonowned auto, need to be dusted off, and newer products, like scooter coverage, need to be built and battle tested. The independent agency channel is exactly the right place for this innovation.

Despite all the advice we got from venture capitalists and others who are absolutely convinced that everything needs to be direct to consumer, not one of these younger consumers said, “I want to buy insurance directly from a carrier.” Actually, most of them don’t even distinguish between direct sellers and independent agents.

Yes, they want a digital experience…at least to start. But they also want someone who is trustworthy and friendly, and who can help them find the right insurance product for them in landscape that is even more confusing for them than it is for customers with a more traditional lifestyle than those young people often lead.

Ease, trust, knowledge. Hmmm.

Sophisticated local agents appeal to younger consumers precisely because of the pairing of the human and the digital. What may not be totally obvious, though, is that agents also have advantages relative to digital-only direct writers.

Independent agencies have unique advantages in dealing with younger customers

From our research with younger consumers, and assuming you have a decent digital presence, here are three distinct advantages you can market to as an independent agency:

• You’re a local business – A 2019 survey by Vistaprint showed millennials spend twice as much at local businesses as Boomers, and almost half are willing to spend more in order to shop at a local business compared to only 27% of consumers who are 55+. Obviously, the pandemic has changed foot traffic, but the essence of “buy local” has never been about real estate per se. Instead, it’s about a sense of fairness, in supporting the little guy in a world many younger people perceive as tilted towards big corporate interests. It’s also about community building and supporting neighborhood businesses. So many agencies focus on donations and volunteering within their communities for all kinds of good causes. And that message is attractive to younger consumers – they shop with local businesses to do good and expect those same businesses to turn around and contribute to the community too.
  
• You connect the online and offline world – A recent Accenture survey of 1700 millennial shoppers showed that 68% are looking for shopping experiences that blend the offline and online world. The word Accenture uses for these experiences is “seamless.” And that matches what we learned in our own research.

You bet younger consumers are using the internet and social media to research insurance, and they may do a few quotes on carrier sites, or your site. The customer experience that wins them over, though, is a real person who has the information they shared in hand and can personalize the experience to them and their needs. Think, qualified local insurance agent, not generic scripted call-center-in-another-state-experience.

• You serve the whole customer – Does it strike you as strange that the trade press regularly publishes articles about how an InsurTech, or even a well-established carrier, has added second or third line of business to their quoting platform? Would it surprise you that I’ve sat in meetings at more than one carrier where we couldn’t even figure out if a customer had personal lines and commercial policies with us?

This compartmentalization and overspecialization have left the industry inflexible and largely unable to innovate at speed. People’s lives don’t match the silos specialization has reinforced.

Agencies, once they reach some scale, have never had this problem. Mixing and matching carriers and lines of business to create just the right package for who the customer is and how they live their life is what you do. And even if you don’t have the right products on your shelves quite yet, that’s why you’re far better positioned to sell products that match consumer lifestyles than ever before.

Let’s take an example: 36% of workers in the US freelance, according to an Upwork study. Many of them work at home. They may not own a car, choosing to bike and car share, particularly if they’re in an urban area. What’s the right bundle of coverages for this market? Some light commercial, a nonowned auto, a renters or condo or homeowners with a work at home endorsement? Which direct carrier can sell that package easily? Pretty much none of them.

A decent digital presence is table stakes in insurance now. Luckily, this isn’t twenty years ago, when building a digital connection with consumers was expensive and required vast scale to be cost effective, so economics dictated a distribution choice between direct and digital or agency and a relationship. Now a digital presence is possible for every agency, and many have sophisticated online presences. And that means this is a golden era – where the blending of human strengths and technological strengths have tipped the advantage to the independent agent.

Insurance is a fundamentally human endeavor – people helping people. And digital is the domain of all of us now. So, yes, we’ve built an amazing digital experience here at Surround, but what we’re proudest of is that when our customer reaches out, it’s an independent agent who is there to help.

Republished from Agency Nation: https://www.agencynation.com/independent-agents-the-right-choice-for-millennials-and-gen-zers/