Millennial Spotlight: When Consumers Abandon Insurance

Catherine Smola, President & CEO | Canadian Underwriter insBlogs

Since launching this blog in 2014, I’ve written a great deal about statistics and market research, particularly related to evolving insurance consumers, especially those of the millennial generation (those born between 1977 and 2004) and how our industry can leverage technology to serve them better. Sometimes though, personal anecdotes can make the point more effectively than raw numbers. For instance, at a conference earlier this year, I heard an old story with a new twist:

A young millennial sets out to research and purchase insurance online. She has her budget, knows what she wants, and is ready to buy. To her dismay, one poor digital experience follows another, and frustrated, the millennial takes her business elsewhere.

No, not to a competing broker, or a direct writer– the twist here is that she found an alternative that allowed her to avoid the purchase of insurance altogether, literally taking herself off the market.

This was a key story shared during the Millennial Panel at this summer’s Insurance-Canada Executive Forum, putting a face and a personality to the reams of data, statistics, and market research that we use every day to drive business decisions. Suddenly, the calls to adopt a mobile-optimized website and invest heavily in the user experience gained that much more weight. After all, it’s not every day that the entire insurance industry loses a customer who was ready, willing and able to pay for coverage.

So what exactly happened?

This millennial, tired of taking public transportation to work every day, had decided to purchase a motorcycle to use during the summer months. Some of the many frustrations she encountered while searching for coverage online included:

  • Non-responsive and non-mobile websites that displayed poorly on her smartphone
  • Restrictive hours of business, preventing her from obtaining expert advice late at night
  • Online quoting engines that wasted her time, forcing her to complete the entire questionnaire even though an answer she provided early on meant that she could not ultimately purchase the insurance she required
  • A lack of education or customer service to explain why insurance for a motorcycle, a seasonal vehicle, was available only on an annual basis

In many jurisdictions, electric scooters are legally considered bicycles (and therefore exempt from insurance requirements) if they have bicycle pedals.So, what was this savvy millennial’s solution? She purchased an e-bike (a bicycle with a small electric motor) instead. E-bikes are legally considered bicycles, and are therefore exempt from insurance requirements. An e-bike met all of her transportation needs for a fraction of the cost she had been prepared to spend originally, and she never would have considered buying one if it weren’t for the poor online experience offered by the insurance industry.

Now in most cases, insurance customers simply do not have the same luxury of choice that this millennial did – not everybody can swap one product that requires insurance, especially their vehicle, for one that does not. But stories like this should serve as a wake-up call that we are not just in competition with each other. From our customers’ point of view, we are in competition with the user experience provided by every other industry they have contact with, comparing brokers not just to brokers and direct writers but to Amazon, Uber and their bank as well.

The lesson is clear: customers will gravitate towards the simplest, most straightforward user experience, and brokers have an opportunity to invest in the technology that delivers that experience. Visit CSIO.com for resources on mobile-optimized websites, search engine optimization, and other digital marketing tips that can help your business attract and retain today’s digital customer.