For decades, the insurance industry has focused on selling traditional insurance products through agency channels using outdated and monolithic systems and processes. Today’s millennial generation is rejecting the industry’s traditional way of selling insurance and is forcing insurers to shift their approach. Millennials want to select and buy insurance the way they purchase other products and services. Insurers need to redesign their offerings and business model to support this shift. Insurers are using new insurance technologies to give millennials what they want. At the forefront is the move to cloud-based insurance microservices platforms which can support the myriad ways that millennials want to select and buy insurance. Millennials are forcing industries to rethink how they operate. While many industries have shifted their business models to attract a new audience, insurers have been slow to adapt. A Gallup poll1 states that millennials are more than twice as likely to buy online than through an agent. It’s not enough to have a mobile-friendly application based on a legacy system — millennials want their entire insurance experience serviced quickly, digitally, and conveniently.
Insurance’s Millennial Challenge
"millennials want their entire insurance experience serviced quickly, digitally, and conveniently."
Insurtechs are well aware of this trend. They are focusing on delivering digital and social technologies, provided through self-service platforms and mobile applications custom-built for millennial engagement.
Insurance policy administration systemshave dramatically evolved in recent years to incorporate more dynamic and flexible solutions. Modern technologies have revolutionized the user experience, as well as provided reduced efforts to onboard and maintain new and innovative insurance product offerings in carrier platforms. These improvements have changed the way insurance is bought and sold - especially to millennials.
Attracting Millennials with Choice and Value
Two of the biggest challenges facing insurers struggling to earn millennials’ business are that this customer segment does do not want to buy from a limited option set or buy without fully understanding the value of what is being offered. Millennials generally believe that insurance is not worth the cost. The reason is partially the perennial predilection of young people in every generation to be both unwilling and incapable of connecting risk and consequence. But there are interesting new factors that the millennial generation is bringing to the table.
Perhaps counterintuitively, millennials are much more responsible with their money than baby boomers and Gen X and Gen Yers. They are saving earlier, saving a larger percentage of their income, and investing in more conservative vehicles than prior generations.
However, when broken down per day, the cost of insurance is much lower than millennials realize and actually does provide real tangible value. Insurers should emphasize the low cost and show the value of modern insurance products and new models of servicing them.
The psychology of choice.
Insurers are beginning to understand the psychology of choice and the role it plays in the millennial purchasing process. Insurers are moving toward a microservices architecture for the process of purchasing and servicing insurance products, which enables custom-built applications that fit millennials' needs.
Microservices allow for unlimited creativity with user interface (UI) and the delivery of insurance products on any device. Ease of use and digital appeal will improve adoption rates for new, customized insurance products. Improved adoption is critical as millennials make up the largest percentage of the workforce and have been deterred to purchase insurance due to its complexity and lack of technical accessibility. A simplified, easy-to-use mobile insurance platform could be the solution that engages the newest group of adults.
Improving Speed with Microservices
Microservices improve the speed-to-market for customizable insurance products. When built on a microservices architecture rather than a monolithic platform, insurers can launch new products to meet millennial needs in half the time.
Millennials also get the instant gratification and convenience they seek with applications that are built leaner and faster. Products built with microservices can:
- Produce instant quotes,
- Enable insurance payments, and
- Track claims in real-time.
Millennials have unlimited access to these applications on their smartphones and tablets, simplifying the insurance purchase process and providing the value that millennials crave.
Attract Millennials with Solartis Insure Microservices
Customizable self-service and mobile insurance applications are a surefire way to engage millennials and increase adoption among young adults. Solartis Insure can help enterprises develop easy-to-use insurance applications built from microservices that serve the custom needs of millennials.
Sign up for access to our Sandbox to see Solartis Insure and our microservices in action. Meet millennial demands with confidence.
"They are fast, simple, and cost-effective. Their team is an extremely reasonable group of people who care, really care, about your success. Every launch has some bumps - they worked above and beyond to make sure those bumps didn't disrupt our launch or our ability to write new business. Without Solartis, I wouldn't be projecting a 30% increase in topline growth."
said Cameron Linder, CEO, Western Bowling Proprietors Insurance (WBPI), Rednil Insurance Brokers, Inc.
Sources:
1. https://news.gallup.com/businessjournal/181829/insurance-companies-big-problem-millennials.aspx
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