Today, I read a thought-provoking article from PC360:
“10 Trends Impacting the Insurance Industry“
Among other issues, I was particularly struck by this statement:
“A study by Novarica identified millennials as researching items before purchasing them, frequently buying online, and preferring digital channels due to their speed, flexibility and ease of use.”
That doesn’t mean that the insurance buying decision must move to “digital channels due to their speed, flexibility and ease of use.” What it means is that, as an industry, we must explain to millennials why the insurance buying decision CANNOT be reduced to an Amazon-like “1-Click” purchase. They are entering into a complex, legal contract where most of their assets and a big chunk of their potential earnings over the next couple of decades is at risk. They’re NOT buying crew socks or hand lotion or downloading an MP3.
My son is a millennial. He gets it. I took the time to explain to him what financially catastrophic risks he is exposed to and why buying the right insurance product for him from a knowledgeable agent and a reliable insurer is critical. One illustration involved a medical analogy…if he thinks he has been exposed to something that could be a serious health issue, does he want a doctor who is quick or thorough? As a result, he has a very good, comprehensive condo policy, a good auto policy that provides more in the way of coverages than exclusions, and an umbrella policy…and he understands why the premium he pays is a good investment.
Don’t give in to the hype and hyperbole or the incessant price-focused advertising. Educate consumers at every opportunity. It’s a big part of being an insurance professional, it’s what distinguishes you from the order takers, and it’s key to your survival and prosperity. MORE IMPORTANT, it’s the key to your customers’ financial survival and prosperity.
The single most important trend impacting the insurance industry is the continuing perpetuation of the myth that insurance is a commodity that can be sold like generic consumer goods.
Photo by Capture Queen ™
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The single most important trend impacting the insurance industry is the coming apocalypse in the auto amrket as car ownership, artificial intelligent robots and self driving cars replace the traditional car ownership and usage. the pimple and blackhead on thsi coming event are the seven year car loans as they begin not to be paid and losses begin to happen even on those that do that leave the insured impoverished. Very few millennials can stroke a check for $1,000. Under a seven year car loan they may be on the hook for ten to fifteen times that amount come claim time.
I may be an exception among my millenial peers, but I agree with you. And I put the blame on this digitally-enabled erosion of trust squarely on the shoulders of insurance execs. I just came back from a conference where VPs and directors talked many times about how much they’d like to have more positive interactions with their customers. But why would customers want to interact with insurers when they’ve been trained to think insurance is a commodity? Do you want to talk to your electrical company? To your mobile service provider? I feel educated about insurance but took me an enormous amount of independent effort to understand what value means for an insurance product. I literally had to get my insurance license to finally understand how rates are set, what riders are and what risks are commonly exempt. With barriers like that, it’s no wonder than people are turning to apps that make the process feel less daunting.
Ana, I don’t think you’re an exception relative to any millennial that “gets it.” If you truly understand the insurance industry and what our primary mission is – to assist people in minimizing the risk of serious or catastrophic financial loss – and you understand that the foundation of this is the insurance contract, a complex legal document, then you KNOW insurance is not a commodity. Every insurance professional should tell this story to consumers whenever possible. If we make them understand that an exposure analysis is nearly as important as a medical exam, then they’ll stop responding to all of the silly, frivolous insurance advertisements that permeate the media.