The world is changing at a rapid rate. And along with it, changing perceptions to life insurance. According to a recent Gallup poll, millennials (defined as individuals born between 1981 and 1996, currently aged 24 – 39 years old) are the least engaged when it comes to insurance, compared with preceding generations. This is reflected in the alarming insurance gap in this market segment of around 60%1.
According to Gallup, this has serious long-term implications for the insurance industry if ignored because millennials will grow to outnumber any other market segment in the years to come, as they age. Rather than being disregarded, we need to investigate what drives this lack of engagement and seek ways to overcome these barriers. And this starts with understanding who this individual is and what makes them tick.
Millennials are getting married, having children and buying homes later than previous generations.
They’re individualistic, self-reliant, well-educated and tech savvy. They want autonomy, flexibility and financial freedom. This mindset is moulding a new employment landscape, which has only been accelerated by technological advancements, an emerging gig economy, and COVID-19.
We cannot continue to market like we did yesterday. We need to remain relevant if this industry is to survive. The status quo will no longer cut it.
So how do we do this?
Life insurance needs to keep up with generational shifts in thinking and not hold on to the way of doing things in the past. When it comes to risk insurance specifically, that starts with looking to protect your clients’ income before proposing a lump sum life benefit that this client base sees no need for. The COVID-19 pandemic has demonstrated to many South Africans just how financially catastrophic a break in income can be and highlights the importance of making sure your client’s income is protected, as more and more people don’t have sick leave benefits or other formal group benefits to fall back on. This actually opens up opportunities to fill any gaps in a client’s policies, if we adapt to the needs of this modern customer.
Having a better understanding of these markets and being able to provide tailored solutions to meet their particular needs will go a long way in reaping success. By innovating in areas which address this generation’s unique needs, we can ensure the relevance and sustainability of our sector. This has been a real focus area for us at FMI, by enhancing our cover to provide income protection for more diverse occupations such as freelancers, independent contractors and individuals with multiple sources of income.
1According to a recent ASISA Gap Study, the 20 – 35 year-old market is dangerously underinsured, at around 60%.
Pew Research Centre
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