According to the latest report from research and consulting firm GlobalData, millennials have different priorities and lifestyles compared to previous generations, which means their insurance needs do not fit the standard packaged products currently on the market.
The report states that, according to the Office for National Statistics, there are 14.7 million people aged 18 to 34 in the UK, which amounts to 28.6 per cent of the adult population.
“These individuals have different insurance needs and preferences compared to the mass market. Ownership of insurable assets among millennials is low due to the economic landscape they have grown up in, making it hard to save,” commented Danielle Cripps, financial analyst at GlobalData. “They are interested in car sharing and telematics-based policies to save cash, and prioritise holidays and short-term experiences as opposed to longer-term goals. In other words, they are not traditional customers – meaning that in some product lines standard insurance packages do not fit their requirements.”
Cripps also said when it comes to car insurance, for example, younger drivers are higher risk and consequently pay higher premiums and that telematics use among under-25s is also very high, which is characteristic of car insurance for millennials and is seen as non-standard cover. When it comes to home insurance, according to Cripps, millennials are more likely to rent than own their home, meaning they only require contents insurance or cover for their gadgets rather than a combined or buildings policy. She also commented that millennials taking a gap year or those at university may need longer-term travel insurance and a greater need to cover gadgets and hazardous activities compared to mass market consumers.
According to GlobalData, the ways in which younger customers access and engage with their policies should be tailored. “At the very least, providers targeting this generation should ensure policies are available to purchase through online channels. Providers should take advantage of millennials’ high ownership of smartphone devices, which are taken wherever they go,” it advised providers.
“A superior digital offering will stand insurers in good stead, but any product or service that targets millennials needs to acknowledge the unique circumstances of these consumers to truly succeed,” concluded Cripps.