Millennials: Not a Lost Generation for Insurance and Retirement Companies
It is interesting that Millennials, like the Baby Boomers and Gen-Xers before them, are having their day in the sun as the most desirable demographic. With their sheer numbers (currently at 72.1 million)i and buying power (an estimated spending of $1.4 trillion over 2020)ii Millennials can make – or break – products and even entire industries. Millennials have been blamed for the demise of everything from razors to insurance and retirement companies and their products. Razors because as a result of the casual office, and now the virtual office due to the pandemic, men can retain their five o’clock shadow, or even a full beard, indefinitely.
But insurance and retirement companies?
Yes, for more than a few reasons. In terms of insurance, Millennials have frequently admitted that they do not understand how it works, much less the need for it. And when it comes to building retirement savings, Millennials are falling behind. Many entered the workforce during the Great Recession and faced a shortage of career-track positions with good compensation. Millennials also carry more student debt than previous generations (a median of $23,000)iii which makes retirement saving much less of a priority.
But it does not have to be endgame for insurance and retirement companies, ironically due to other characteristics that define Millennials. Companies can reach these digital natives by developing online purchasing options that provide an effortless and intuitive customer experience, a real draw for these digitally discerning users. They can also build a distinctive online presence, as well as personalized sales strategies, to appeal to a generation disengaged from mass advertising and requires a more tailored and convincing value proposition. To address their more urgent health and financial needs due to the pandemic, companies can offer Millennials health and financial wellness programming that suits their stage of life, such as mental health benefits, student-loan repayment assistance, and flexible leave.
So, Millennials do not have to be a “lost” generation for insurance and retirement companies. Companies can win Millennials over with targeted strategies and consequently widen their customer bases overall. And once people return to their offices after the demise of COVID, razors may very well make a comeback, too.
To read more on the topic of Millennials and insurance and retirement companies, see Vitech’s recent insight paper: Getting a (Financial) Life: Attracting Millennials to Insurance and Retirement Products.
[i] Richard Fry, ‘Millennials overtake Baby Boomers as America’s largest generation’, Pew Research Center, 2020, https://www.pewresearch.org/fact-tank/2020/04/28/millennials-overtake-baby-boomers-as-americas-largest-generation/ (accessed March 2021).
[ii] Jaime Netzer, ‘The top millennial buying habits and insights for 2021’, Khoros, 2020, https://khoros.com/blog/millennial-buying-habits (accessed March 2021).