If you are an insurance company marketing executive wondering about how to tackle the Gen Y (or Millennial) market, trying to crack the code can be exhausting. Brace yourself. There’s something you need to know.
… They are just not that into you.
Sigh… (Junior high feelings come rushing back including anger, sadness and a desire for a new wardrobe or haircut perhaps).
The ironic part is that Millennials are into the things you stand for and the value you provide. And they probably want your product. So what gives?
They don’t have a clue what you are talking about.
How did the communication gap happen?
Let’s think about it. The language of the insurance industry was created in an era when there was deference to large organizations that provided jobs, new products and offered prosperity to a community. Noble offerings indeed. In the 1800s when the insurance industry was an innovation, this was the case. It was about what the company was providing in order to make society better, not about what the individual consumer was asking for. It just so happened that the insight was good because it filled a significant unmet consumer need. Public programs didn’t exist. Organized charity didn’t exist. How else were people to hedge against the perils that faced them outside of “pass the hat”? Early insurance companies had the answers.
The words that were used to describe what the insurance provider was doing for the public were company centric—for example “policy.” What is a policy? It’s the company’s set of structures and rules for how it pays out money. It isn’t a product for the consumer. It’s about what the company will “allow.”
How about “agent”? The word agent means an individual who represents the insurance provider, not someone who represents the customer.
What about “waiver”? Huh? (Only the insurance terminology gurus are getting this right now.) The word waiver means that the insurance provider foregoes their right to something. So if a customer purchases this benefit, the provider will waive their right to collect premiums. Who’s the center of the universe there?
Let’s look at one more. How about “claim”? In the early days of insurance, claims were a formal way of saying you had a right to the proceeds and being given the opportunity to prove it. It reminds me of Dorothy and the Wizard of Oz. She lands in this crazy place, has to walk for miles, meets all kinds of nutty, ridiculous people, risks her life to get the broomstick, and then ASKS the wizard if she is worthy of going home?
That’s probably where the term “gee wiz” comes from…
C’mon, do any of you have kids in their 20s? How would they respond to a structure that was all about the company and not about them? How are other industries morphing and changing to consumer centricity? How is the insurance industry lucky enough to still be surviving on the fumes of “build it and they shall come”?
If you think the boomers are the me generation, the echo boomers (Gen Y) put maxi me in “mini me.”
That’s a contorted way of saying they feel even more entitled to be catered to by the brands they engage with than their boomer parents do.
I’d Like To Teach The (Insurance) World To Sing
A recent study at Maddock Douglas proves that Gen Y issues are pervasive; however, they represent a significant opportunity for companies that are willing to step up and change up the language of the insurance industry.
The study tested some commonly used words and concepts and asked respondents to associate the words and/or define them. While the group as a whole was not really familiar with this terminology, it was worse within Gen Y than with boomers. The results make sense when you think about it. The further a generation gets away from the roots of the business, the less relevant it will seem. Unless, of course, the language and offering keeps up with the times.
Let’s look at a few key examples.
Protection—this is a word used in most insurance marketing materials. And it’s good that half of respondents think about it as security. But why do more people associate it with birth control than insurance? To the right is a chart that shows the number of respondents who associated “protection” with the concepts below:
How about that policy?
While many do associate the word with insurance, you can see a marked difference between how boomers associate it and how their kids do. The graph below shows the breakdown by generation and what they associate the word “policy” with.
What about disability insurance? The word disability is more often associated with handicaps; however, more payouts are made due to people being unable to work and/or injured.
And what about financial services in general? Most insurance companies have entered into the retirement space in one way or another. While it seems reasonable and responsible to help younger people save wisely, how are they feeling about the word “retirement”? As you can see, boomers have a more favorable view of the word, and younger generations associate it more with old age than they do with the freedom that boomers associate it with.
The bottom line is that the positive emotions the industry is trying to create through feelings of satisfaction, confidence and relief are being crowded out by negative ones. Respondents who felt intense emotions reported this order of magnitude.
And they perceive the big picture better than you might think.
When we asked respondents who they thought benefited the most from insurance, the companies came out #1 and consumers #5. That’s not necessarily true when you do the math; however, perception is reality and it is something to contend with. It is a signal that the relevance and value are not being seen as they could be or should be.
So what’s the good news?
If it’s white space and you know it, clap your hands!
When we asked consumers who they thought needed to be responsible for making them understand insurance, they accepted a lot of the responsibility! They want to know about it and probably know it’s important, but it just feels like noise.
What’s that mean for forward-thinking insurance companies? It means “white space.” That is, the opportunity to own something that no competitor does.