millennials in 2015: insur ance deep dive - nielsen€¦ · 12.0% source: nielsen pop-facts 2015. c...

M i l l e n n i a l s i n 2015:i n s u r a n c e D e e p D i v e

2 Millennials in 2015: insurance Deep Dive2

Millennials in 2015: insurance Deep Dive Diversity, self-expression and optimism define the Millennial generation.

As a group, this young generation is more racially and ethnically

diverse than any before it. Millennials are fueling an urban revolution

looking for the vibrant, creative energy cities have to offer with a mix

of housing, shopping, and offices right outside their doorstep. They

value self-expression and artistic pursuits. Millennials place a premium

on authenticity–from the products they buy to their interactions with

brands.

As the youngest group of adult consumers, Millennials are also the

most underinsured generation. In large part, this is because many have

delayed many major life milestones such as purchasing a car and a

home, or starting a family, when compared to past generations. These

delays have kept Millennials from focusing on their insurance needs.

This generation’s attitude toward vehicle ownership and access-driven

transportation (with the rise of Uber and Lyft) is also different from

previous generations’, affecting Millennials’ insurance needs. Yet, not all

Millennials act and feel the same when it comes to insurance. Upscale

Millennials, who are the most established and have accumulated the

most assets, represent greater opportunity within the insurance realm

than the other sub-groups.

3Copyright © 2015 The Nielsen Company 3

Millennial: Striving, OptiMiStic & authenticToday, there are more Millennials (those born between 1977 and 1995) than Baby Boomers. They are 77 million strong and make up 24% of the U.S. population. Just two years ago, Millennials and Boomers were on equal footing, each representing 24%.

U.S. Generation DiStribUtion

27%

24%16%

23%

10%

GEN Z GEN XMILLENNIALS BOOMERS SILENT

nielSen Generation DefinitionS:• GREATEST/SILENT GENERATION (pRE-1945) AGE 70+• BABy BOOMERS (1946-1964) AGE 51-69• GENERATION X (1965-1976) AGE 39-50• MILLENNIALS (1977-1995) AGE 21-38• GENERATION Z (1995-pRESENT) UNdER AGE 21

Source: Nielsen Pop-Facts 2015

4 Millennials in 2015: insurance Deep Dive

Millennials have been hard hit by the recent turbulence in the economy,

but their high education levels and optimism foreshadow their future

success. According to the Q2 2015 Nielsen Consumer Confidence

Index, roughly 70% of Millennials believe their personal finances will be

either good or excellent in the next year, yet 55% still feel like the U.S.

is in an economic recession. While economic struggles are a reality for

many Millennials, there is a subset that’s thriving. Upscale Millennials

represent roughly 27% of this generation, earning more than $75,000

per year, 15% of which earn more than $100,000. Appealing to the

distinct wants and needs of upscale Millennials is vital in capturing this

lucrative segment.

Upscale Millennials are more established than their generation

overall. These consumers are more likely to be married, well-educated

homeowners. Life for the Millennial generation as a whole; however,

tends to be in flux, as 29% say they plan to look for a new job and 18%

plan to move in the next year.

MillennialS by incOMe tOtal u.S. by incOMe

27.8%15.4%

26.6%18.7%

11.4%

UNdER $25,000 $25,000-$50,000 $50,000-$75,000

$75,000-$100,000 $100,000+

23.5%22.8%

23.9%17.8%

12.0%

Source: Nielsen Pop-Facts 2015

5Copyright © 2015 The Nielsen Company

MillennialS by the nuMberS

TOTAL MILLENNIALS: UpScALE MILLENNIALS (HH INcOME $75k+):

Median Household Income $48,797 $109,818

Presence of Kids 57% with kids 57% with Kids

Race/Ethnicity74% Caucasian, 21% Hispanic, 14%

African-American, 4% Asian-American78% Caucasian, 15% Hispanic, 9% African-American,

6% Asian-American

Homeownership 47% Homeowners 68% Homeowners

Home Type57% Single-Family Home, 23%

Apartment, 9% Townhome, 3% Condo72% Single-Family Home, 12% Apartment,

8% Townhome, 4% Condo

Education30% College Graduates,

11% Post-Grad Work51% College Graduates, 21% Post-Grad work

Source: Nielsen Scarborough 2015


Millennial inSurance needS: incOMe MatterSThe rise of the sharing economy has shifted many consumers’ attitudes from ownership to access, especially among Millennials. Given the economic stress many Millennials have faced, many of these young consumers have been reluctant to make big-ticket purchases like homes, cars and luxury goods. Sharing economy services like Uber, ZipCar and Airbnb provide access without the burdens of ownership. Only 15% of Millennials indicate that purchasing a car is extremely important, while roughly 40% indicate that purchasing a home is extremely important.

Millennial hierarchy Of needS: autO

Millennial hierarchy Of needS: hOMeS

30%15%

25%5%

25%

I dO NOT INTENd TO pURcHASE A cAR IN NEAR fUTURE

IMpORTANT, BUT NOT A BIG pRIORITy

I dO NOT fEEL STRONGLy ABOUT IT

I MIGHT pURcHASE ONE If I REALLy NEEd IT, BUT INdIffERENT OTHERwISE

EXTREMELy IMpORTANT

15%

40%

30%

8%7%

Source: Goldman Sachs Global Investment Research 2015


Millennials are less likely to have insurance for their belongings than older generations, particularly when it comes to homeowners/renters insurance and life insurance. This is not the case, however, for upscale Millennials, who tend to be more established and have more assets to protect than their generation as a whole. In fact, upscale Millennials have higher ownership rates of auto insurance and homeowners/renters insurance than older generations and have similar ownership rates of life insurance. This group of young, upscale consumer represents a pocket of opportunity for insurance carriers that are only just beginning to build their asset portfolios.

Source: Nielsen Scarborough 2015

inSUrance ownerShip by Generation

81% 81% 80%

49%

81%

48%

88%82% 83%

78%

50%

73%

48%

63%

33%

GEN ZMILLENNIALS UpScALEMILLENNIALS

BOOMERS SILENT

AUTO INSURANcE LIfE INSURANcEHOMEOwNERS/RENTERS INSURANcE


ShOpping and Switching behaviOrSLoyalty to insurance carriers is often based on family legacy. According to Nielsen Insurance Track, Millennials are likely to pick the same insurance carrier their parents or other family members use. However, Millennials are price conscious and like to shop around when it comes to insurance rates. Roughly 67% have shopped around for insurance from another company in the past three years, compared with 55% of the general population.

Upscale Millennials are even more likely to shop around, as approximately 72% of them have shopped for insurance from another carrier in the past three years. While these upscale consumers are likely to shop around for a better price, similar to their generation as whole, they’re not looking at cost. Rather, they’re also likely to consider another insurance carrier because their existing carrier raised prices or because they want to combine insurance policies with the same company.

But despite watching their wallets and staying on the lookout for cost savings, Millennials do not want to sacrifice quality. In fact, more than half (54%) say they’re willing to pay more for better insurance coverage. Upscale Millennials are even more likely than Millennials as a whole to value quality coverage, with 61% indicating they would pay more for better coverage.

When Millennials have insurance, they tend to use it. Millennials are more likely to have insurance claims than older generations. Roughly 34% of Millennials have had at least one claim in the past three years, compared with 27% of the general population. Upscale Millennials are even more likely to have filed a claim, with 42% indicating they have filed a claim in the past three years.


MillennialS and channel engageMentDespite growing buzz about technology taking over the insurance industry, consumers aren’t ready to give up person-to-person interactions. Consumers prefer direct connection to a person for certain actions, but prefer to use of technology for other actions. For example, no matter their age, consumers are most likely to use a local agent when starting a new insurance policy or filing a claim. However, when reviewing statements or inquiring about billing, consumers are less likely to need person-to-person interaction.

Like most insurance buyers, Millennials do rely on local agents. Yet, as the generation that grew up with computers and mobile phones, they are more likely than older generations to turn to technology when interacting with their insurance carrier. Millennials use their mobile devices to interact with their insurance carrier more than older generations, despite the fact that adoption rates are still low compared to other channels. Approximately 92% of Millennials have a smartphone, compared with 76% of Baby Boomers.

Upscale Millennials are even more likely than their generation overall to use technology when interacting with their insurance carrier.

Upscale Millennials are also more comfortable using their mobile devices to interact with their insurance carriers, compared with Millennials as a whole. Roughly 13% of upscale Millennials have filed a claim using their insurance carrier’s mobile app, and roughly 11% have reviewed their statements via mobile.

98% Of UpScALE

MILLENNIALS REvIEw THEIR STATEMENTS

ONLINE

73% Of UpScALE

MILLENNIALS MAkE BILLING

INqUIRIES ONLINE


channel USeD to acQUire new policy

channel USeD to reView StateMentS

channel USeD for billinG QUeStionS

channel USeD for filinG a claiM

41%

22%

25%

32%

21%

19%

33%

30%

35%

52%

37%

30%

3%

7%

5%

7%

44%

24%

29%

35%

20%

17%

32%

31%

34%

54%

36%

28%

2%

4%

3%

5%

53%

32%

39%

45%

22%

17%

36%

35%

24%

50%

24%

19%

1%

1%

1%

1%

60%

43%

43%

51%

24%

20%

37%

37%

16%

37%

16%

12%

0%

0%

0%

0%

LOcAL AGENT

LOcAL AGENT

LOcAL AGENT

LOcAL AGENT

pHONE

pHONE

pHONE

pHONE

ONLINE

ONLINE

ONLINE

ONLINE

MOBILE AppS

MOBILE AppS

MOBILE AppS

MOBILE AppS

GEN XMILLENNIALS BOOMERS SILENT

Source: Nielsen Insurance Track 2015


Source: Nielsen Insurance Track 2015 (Index where 100=average U.S. consumer)

MillennialS lead the way with teleMaticSMillennials represent the earliest adopters of vehicle telematics—technology that tracks driving behavior. When offered by their insurance carrier, Millennials are 44% more likely than the average consumer to use a device from their insurance company that tracks driving behavior in exchange for discounts. Upscale Millennials are 79% more likely than the average consumer to use these programs.

In 2015, 32% of respondents were offered a usage-based insurance policy compared to only 23% in 2013. There has also been an increase in participation, up 7 percentage points from 2013.

propenSity to USe teleMaticS

awareneSS & aDoption of teleMaticS

GEN XMILLENNIALS

INd

EX

190

140

90

40

UpScALEMILLENNIALS

BOOMERS SILENT

144179

125

7651

dOeS yOur priMary inSurance pOlicy Offer yOu a diScOunt fOr inStallinga device that MOnitOrS yOur driving behaviOrS?

OffEREd, pARTIcIpATE

OffEREd, dON’T pARTIcIpATE AT THIS TIME

OffEREd, wOULd NEvER pARTIcIpATE

NOT OffEREd

dON’T kNOw/pREfER NOT TO SAy

13%8%2%

37%

40%

20%

10%2%

27%

41%2013 2015


what dOeS iS it all Mean?Millennials have reached critical mass and are too large to ignore.

Because many Millennials have yet to reach certain life milestones

such as car ownership and home ownership, they haven’t had the same

type of insurance needs as older generations. Focusing on these key

elements will help providers capture Millennials within the insurance

landscape:

• Focus on Upscale Millennials: Upscale Millennials represent a key area of opportunity for insurance carriers. These consumers are more likely to be established and settled than their generation altogether. Their early lifestage indicates they’re only at the beginning of building their portfolios. Upscale Millennials are more likely to own big-ticket items and are more likely to be engaged with insurance carriers. Focusing on upscale Millennials will deepen engagement and build loyalty with this lucrative segment.

• Tap into Technology: Millennials are rooted in their use of technology. They lead the way with use of telematics as well as mobile and online interaction with their insurance carriers. Enhanced use of technology will increase engagement among Millennials as long as personal connections remain. This is particularly true of upscale Millennials, who are even more tech-savvy than their generation as a whole.

• Be Authentic and Make it Personal: Millennials are cautiously optimistic and value authenticity in their interaction with brands. Developing an open, transparent relationship with Millennials will build trust and engagement. Millennials are also breaking with the tradition life course that older generations followed. They appreciate the opportunity to customize their insurance policies to meet their specific, individual needs.


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millennials in 2015: insur ance deep dive - nielsen€¦ · 12.0% source: nielsen pop-facts 2015. c...

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