WIXLIB

agent for the future UNDERSTANDINGMILLENNIAL INSURANCECONSUMERSaftf1

This year, millennials overtookbaby boomers as the largestgeneration of adults in the U.S.According to Pew Research Center, as of 2019,there are roughly 73 million millennials in the U.S.This means that as the populations of oldergenerations decline, millennials (born between1981 and 1997) will make up the largest section ofconsumers for the next few decades.Every company that wants to survive must learnhow to attract millennial customers. Independentinsurance agencies are no exception.Liberty Mutual and Safeco recently surveyed morethan 2,800 insurance consumers, including 1,600millennials. This report provides our first look atnew Liberty Mutual and Safeco research intomillennial insurance consumers.As older millennials head into their peak earningyears, they are starting families, purchasing homesand making more complex buying decisions.Our research found that 80 percent own a car,45 percent own a house and 78 percent plan tobuy a house in the next nine years.aftf2

73 millionmillennials in the U.S. in 201945 %of millennials own a houseWhile many people in insurance assume thatyounger buyers always shop online and onlycare about price, our research shows otherwise.Contrary to some predictions, the rise of thedigital-savvy millennial consumer does not spelldoom for independent agents (IAs); rather,it presents a huge opportunity. Our researchfound that millennials want help understandinginsurance, and most of them are open to workingwith an independent agent.However, competition for millennial consumersis fierce, with insurtech startups and direct-toconsumer carriers focusing much of their marketingefforts toward younger consumers.To compete and thrive in the future, independentinsurance agencies need to attract millennialconsumers by demonstrating the unique value ofIAs. This starts with understanding how youngerconsumers view insurance and how they makepurchasing decisions.80 %of millennials own a caraftf3

OURRESEARCHaftf4

As more millennials enter the insurancemarket, independent agencies must learnhow to reach younger consumers and meettheir service needs.We at Liberty Mutual and Safeco’s Agent for theFuture program want to help IAs adapt to meetthe needs of millennial customers. This report is thefirst of a three-part series that aims to shed light onhow millennials view insurance and what they arelooking for in an agent.In this and future reports, as well as in expertinsights and case studies on AgentForTheFuture.com,we’ll share strategies and practical advice for howIAs can attract more millennial customers.Our research team surveyed roughly 1,600millennials, 600 Gen-Xers and 600 babyboomers. Survey questions covered topics such as:How consumers view insurance and agentsThe key factors considered when buying insuranceThe ideal characteristics consumers look for inan agentWhy consumers do or do not work with an IAThis report provides our first look at new LibertyMutual and Safeco research into millennialinsurance consumers.aftf5

KEYFINDINGSaftf6

1Millennials are more likely than oldergenerations to buy insurance online,but half of millennials bought insurancethrough an exclusive or independent agent.2Millennials are not more price-focusedthan Gen-Xers and baby boomers. Theyhave similar priorities when purchasinginsurance, such as looking for the mostcomprehensive coverage.3Millennials want their agent to be aseasoned insurance professional whocan help them understand insurance andbecome informed consumers.4Millennials are more likely to researchand connect with agents through digitalchannels such as online reviews and socialmedia, but they still value the input of anexpert advisor.aftf7

Unsurprisingly, millennials are more likely than older generations to buy insurance online. However, fewermillennials are making online insurance purchases than many might expect. 36 percent of millennials reportedbuying auto insurance online, and 30 percent bought homeowners insurance online. Meanwhile, 52 percentof millennials purchased auto insurance, and 58 percent bought home insurance, through an exclusive orindependent agent.The outlook is good for the future of theindependent agent channel.The majority of millennials are open to working with an IA, and those who do report high levels of satisfaction.Independent agents can offer millennials the ease, choice and advice they need to make wise insurancedecisions, but IAs may need to adopt new tactics to reach younger consumers and demonstrate the uniquevalue of independent agents.Insurance channel purchaseINDEPENDENT AGENTEXCLUSIVE AGENTONLINEHome & 30%25%17%19%11%MILLENNIALSGEN XBABY BOOMERSMILLENNIALSGEN XBABY BOOMERSaftf8

In their own wordsIn Liberty Mutual focus groups, millennials whoworked with IAs cited expert advice and plancomparisons as some of the reasons they choseto purchase through an IA.“The person is informedon different plans andprobably has moreknowledge than I canfind online, making myexperience a lot easier.”Price isn’t the primary selling pointIt’s a common belief in the insurance world thatsince millennials have fewer assets and less wealththan older generations, they look for the cheapestinsurance and buy online through large, direct-toconsumer carriers.But our research shows that millennials are notmore price-sensitive than older generations. Whileall generations listed price as one of the key factors“They are not biasedtoward a particularcompany, so they cantruly find the best optionby comparing differentcompanies based on morethan just price.”when purchasing insurance, millennials gave itslightly less weight than Gen-Xers and boomers.Millennials’ views of insurance line up with oldergenerations in many ways, and they have similarpriorities when purchasing insurance. More than halfof millennials care most about gettingcomprehensive coverage for good price. Only 31percent want the lowest price even if it means abasic policy (compared to 29 percent of Gen-X and18 percent of baby boomers).aftf9

Purchasing factors52 %50 %49 %40 %36 %31 %the most comprehensivecoverage for a good pricereputation for good serviceeasy purchase processunderstanding my coverageprice comparisons fromcompeting insurance companieslowest price, even if it meansa basic policyAnd while millennials do want easy access and time savings when purchasing insurance, they place just asmuch value as older customers on expert advice and a recommendation from someone they trust. In fact,millennials were twice as likely as boomers to say they don’t mind if others make a decision for them if thatperson seems better informed.This means IAs shouldn’t assume that younger customers simply want the lowest price. Though millennialcustomers may not yet have as many assets as older clients, they have different needs and concerns aboutcoverage. Our survey found that millennials are more worried about future risks than boomers, with 38percent saying they constantly worry about what-if scenarios (versus 12 percent of boomers).To attract and keep younger consumers, IAs can listen to their concerns and walk them through policy options,helping ease the stressful “what-ifs” of potential disasters. Agents can share stories of how insurance coveragehas saved their other clients from losses, as a way of demonstrating their expertise and selling their value.aftf10

A desire to be informed consumersNaturally, millennials have not had as much experience with insurance as older generations and thereforehave less knowledge of insurance. This is compounded by the fact that millennials tend to get married andbuy homes later in life than previous generations. While 52 percent of baby boomers describe themselvesas insurance-savvy, only 34 percent of millennials see themselves as insurance-savvy. Our survey found thatmillennials want to be well-informed consumers and recognize that they have a lot to learn.Some insurance professionals assume thatmillennials don’t pay much attention to policydetails. But in our survey, more than half ofmillennial respondents said they need to know allthe details about their policy. And, of those whoworked with agents, 80 percent said they wanttheir agent to help them understand insurance– talking them through their coverage, whatto expect if they have a claim and the uniquefeatures of their policy.80 %of millennials surveyed want an agentto help them understand insurance.What millennials want to know about insurance58%50%40%33%The coverage andhow it worksWhat to expect if Ihave a claimUnique features ofmy policyManaging my policyonline31%29%Additional products/ Safety and loss preventionservices relevant to metips and tricksThis shows that millennials want to dig in and make good decisions. They desire the expert advice that IAs canoffer. If IAs can demonstrate their knowledge and explain insurance terminology and policy details, they willbe in a better position to attract millennial clients.Taking time now to talk younger clients through their first policies will show them they can trust you for advicewhen they start buying homes and making more complex purchasing decisions in the future.aftf11

Digitally engaged, but still valuehuman touchUnsurprisingly, millennials are almost three timesas likely as baby boomers to describe themselves astech-savvy, and they are twice as likely as boomersto buy insurance online.social media (compared with 18 percent of GenXers and 12 percent of boomers). And whilebaby boomers choose an agent based mostly onthe agent’s location and which companies theyrepresent, millennials put more stock in onlinereviews, social media engagement, the agent’swebsite and online chat capabilities.However, our research found that online channelsare simply a route to connect with a humaninsurance agent. When it comes to learning aboutand choosing an agent, millennials ask family andfriends for recommendations, but are also farmore likely than previous generations to turn tothe internet. More than 27 percent of millennialssaid they learned about an agent through digitalengagement such as online search, reviews andaftf12

Choosing one agent over anotherMILLENNIALSGEN XBABY BOOMERS43%35%Positive online reviews25%41%Represent a well-known company44%59%34%Convenient location47%50%28%Social media engagement10%3%24%Modern website17%11%19%Availability of online chat12%5%15%Nice-looking storefront7%3%These numbers highlight a need for IAs to engage in a number of different digital channels to attract millennialbuyers. Millennials still want the personalized expertise that an IA can offer, but may need to be engagedthrough digital means.Millennials also reported wanting easy access and time savings, and while they want engagement and adviceduring the insurance buying process, they are less concerned about service after they buy. This points to aneed to offer streamlined digital service and use carriers who can deliver online account management forroutine tasks.aftf13

The outlook forindependent agentsMillennials’ desire to be educated consumers comes through in what they want from their agents, thoughtheir opinions are not as strong as those of previous generations. Millennials are looking for someone olderand wiser who can guide them through insurance decisions. 49 percent say they want to work with aseasoned insurance professional, while just 9 percent want to work with someone close to their age. Theyalso want someone who inspires trust (50 percent) and makes it a point to get to know them (29 percent).Ideal agent characteristicsMILLENNIALSGEN XBABY BOOMERS50%47%Inspire trust62%49%Be a seasoned insuranceprofessional55%73%29%33%Make it a point to get to know me40%21%Be a go-getter19%10%19%18%Be tech-savvy10%15%Be involved in local community11%9%9%Be close to my age4%1%aftf14