Recent research from McKinsey shows that as digitisation increases, it’s becoming more and more difficult for almost all industries to gain a consumer’s limited attention.
The most crucial consumer is the one you’ve yet to reach, and there happens to be a whole generation of like-minded ones. We spoke to industry experts about how they are reaching the millennial cohort – people of the ages between 26 and 41 – a group of people who have expendable income and live a significantly digitised life.
Millennials are one of the largest generations in history, and they’re hitting their prime spending years, notes Wimpie van der Merwe, CEO of Global Choices.
Fortunately, there are plenty of insights from online interactions to work with. Social media has dramatically improved the quality of information about this cohort. And in some ways, the data generated from this has turned users into a giant focus group. This, combined with more fine-tuned assessments and investigations, reveals a lot about the group of people in question. Here’s what South Africa’s top insurance minds have learned about millennials.
They underestimate life insurance
“There is a notion among young adults that life insurance is unnecessary in your twenties, owing to a perceived lack of risk to which this population segment is exposed and an underestimation of the long-term impact of suffering a life-changing event,” points out Daniel Stoch, Head of Market Analytics and R&D at Discovery Life.
“Studies have shown that young adults have a naïve sense of invincibility and under-appreciation for the probability of suffering a life-changing event,” he adds.
“Discovery Life’s recent claim statistics have shown that almost 40% of all deaths for millennials (clients between the ages of 18 and 40) have been as a result of unnatural causes. This incorporates behavioural, yet largely controllable causes, such as car accidents,” says Stoch.
This idea of invincibility contradicts a central concern of millennials: health and longevity.
In its consumer surveys on health-and-wellness trends, the Natural Marketing Institute (NMI) found that 77% of Millennials saw a healthy, balanced lifestyle as “very” or “extremely important.”
“The Deloitte Global 2021 Millennial and Gen Z Survey showed that the worldwide pandemic spurred Millennials to make health care and disease prevention their highest personal priority,” Daniel Stoch points out.
Wellness is a daily, active pursuit for millennials, says Stoch. “They are eating healthier and exercising more than previous generations. Almost half consider healthy eating a lifestyle choice as opposed to a goal-driven diet.”
A study by market research firm Nielsen showed that 44% of millennials choose healthy living to avoid high medical costs in the future.
This is significant in terms of risk mitigation.
Pandemic has highlighted the need to protect your mental well-being. Healthscape’s “2020 Healthcare Trends Executive Brief’’ identified mental health openness as one of the top trends in Millennials’ interactions with healthcare. In a YPulse survey of Millennials and Gen Zers, 77% said that maintaining their mental health had become more important to them during the pandemic. In January 2020, even before Covid-19 hit, 30% of millennials in a YouGov survey said that they had changed their diet to improve their mental health.
They’re on their phones
Millennial clients are more used to technology and use this to do comparisons in products and pricing, says Peter Olyott CEO of Indwe Risk Services.
Millennials have actively embraced social media and technology, which has enabled greater access to wellness information and has put personal health monitoring into the palms of their hands, says Daniel Stoch.
“The younger generation of clients prefer to use digital platforms that give them immediate access to their insurer, either online or through an app on their phones. This has necessitated innovations such as the ability for clients to submit and monitor claims, as well as generate quotes on their cell phones, says Precious Nduli, Head of Technical Marketing and Marketing at Discovery Insure.
These clients want tailored cover and value for money, appreciating rewards and socially responsible concepts such as Discovery’s Shared-value Insurance model
In Daniel Stoch’s observations, he has noticed that millennials have a strong preference for digitisation in the engagement in their policy.
“The ability to see policy on the face of a mobile app is highly valued,” he says. “Millennials want a product that they can engage with in terms of seeing what benefits they have and what their financial rewards are based on their engagement.
They’re on the move
Millennials move jobs, cities, countries and careers much more than the previous generation, which complicates and hinders their financial planning process.
“Research shows that around 59% of millennials in the US currently live in a city different to their hometown, almost 80% have moved cities in their lifetime and over two-thirds have moved at least three times,” says Stoch.
They drive less
“Interestingly, our data shows that millennials drive 8% less than Gen X, with Gen Z driving even less,” says Precious Nduli of Discovery Insure.
“This illustrates the preference of younger generations for making use of alternative transport options such as e-hailing.”
As a result, insurers need to adapt and offer these clients benefits that align with their changing needs, Nduli says.
“At Discovery, clients can choose to receive an Uber voucher instead of a hire car, to keep them mobile while their car is being repaired. Clients who have opted in for Vitality Drive also get access to additional discounts on Uber trips and other take-me-home services.”
They want it now
App technology offers real-time responses, millennials have come to expect a similar level of gratification in other spheres.
This perspective can hamper the long-term financial planning process and deter them from taking out traditional life insurance products.
“Millennials tend to underestimate the importance of sound financial advice given that only 16% say they would work with a financial adviser,” says Stoch.
Daniel Stoch explains that this highlights the importance of advisers building relationships with younger clients. This helps shift them away from their myopic view of life insurance, and highlights the need for dynamic assurance products that are able to adapt to their lifestyle and changing needs.
They’re drawn to gamification
The app-laden existence of this cohort hinges on gamification – a cycle of rewards for input, and subsequent data being generated.
Discovery Life uses these concepts in their Vitality programme.
“As part of the Vitality programme, Vitality Active Rewards gamifies exercise, driving and spending habits through personalised weekly goals, incentivising incremental, positive behaviour change through exciting rewards,” Stoch explains.
“This not only provides clients with a real-time incentive to engage in the programme, but also has a powerful long-term impact on their health and wellness, providing substantial financial rewards that they can generate from their Discovery Life Plan through premium discounts and PayBacks.”
Discovery Insure’s Vitality Drive programme also uses these principles.
We offer discounts and fuel cash back to drivers who show responsible driving behaviour by keeping to the speed limit, cornering, breaking and accelerating smoothly as well as not using their cellphones while driving,” says Precious Nduli.
“Every day they receive 25 Drive points that they can potentially bank towards earning their customized weekly Vitality Active Rewards goal. If they reach their goal, they then earn a play on the game board each week where they earn Discovery Miles to spend on a wide range of rewards,” he says.
“This programme encourages participation and better risk behaviour which is sustained over time. This then benefits clients through the Shared-value model with rewards and lower premiums.”
They prefer experiences over objects.
“The companies that will come out on top are those that are reorganising and reprioritising around millennials,” says Wimpie van der Merwe.
“This means they’re embracing changing preferences to offer more sustainability, affordability, and flexibility in their products and services. They’re also embracing new technology and the unprecedented discoverability and customer connections it allows,” he says.
“We are developing a Total Experience Strategy (TX) to accommodate and to grow with millennials.”
The more connected to technology a person is, the more susceptible the more their attention is hijacked. Tech invests billions of dollars into developing ways to keep eyes on screens. The challenge lies in cutting through the noise and securing clients despite the exponentially increasing screen-time.
Attention spans have started to become even shorter, because of instant gratification and quick fixes, says Wimpie van der Merwe. “We create and post engaging videos to capture attention on social media and we keep our message short, simple and sincere.”
“Discovery Insure advertises across all the traditional platforms, as well as on newer platforms such as LinkedIn and Instagram,” says Precious Nduli.
“This means that we are able to reach a much wider audience by making use of a broad range of mediums that include video, print and even interactive polls.”
Indwe has gone into both social media and content creation.
“The majority of our current marketing is via social media platforms and our website, Peter Olyott says. “A lot of our media is centred on thought leadership as opposed to outright selling.”
Global Choice also sidesteps obvious sales pitches.
“We avoid the old-fashioned ‘hard sales’ approach when posting videos on social media, as that’s a sure way to annoy people who will then likely unfollow your brand,” says Wimpie van der Merwe.
“The primary focus is on supporting financial advisers due to the fact that life insurance is heavily reliant on advice,” Stoch says. “By appropriately equipping advisers with a product that is engaging and appealing to millennials, we are able to break through the “noise”.
They need to be convinced to stay
Connecting with clients is one thing, keeping them is another. After onboarding, how do you go about introducing them to other products and services that you offer?
With Discovery Life, a client is able to view their Discovery portfolio. Stoch says this exposes them to the products that they do not currently have and encourages the conversation between
them and their financial adviser.
“Discovery’s Shared-value insurance model creates opportunities for advisers to provide clients with products that meet all possible financial needs, from life insurance to short-term insurance, as well as investment and banking products, enhancing the value that they can receive as they Integrate their portfolio,” he says.
Staying in touch is crucial, as Peter Olyott points out.
“Our onboarding and new business approaches do not only focus on the product at hand but we provide the prospective client with information about all of our offerings available through our group companies. Sometimes this occurs at the time of the initial sale, other times at designated intervals and /or the annual review.”
“Discovery Insure aspires to continually innovate, and we regularly run campaigns to make sure that current and prospective clients are aware of our valuable product offerings,” Precious Nduli says. “We also provide our advisors with a wide range of marketing material so that they are in the very best position to be able to assist their clients in choosing the appropriate products that will meet their needs, especially as their circumstances change over time.”
They want to be spoken to personally
Ultimately, insurers are going to have to offer a personalised service.
“We tailor it to the client,” says Wimpie van der Merwe. “When we craft our messaging and solution, we cut out the marketing-speak and focus on the key takeaway. We deliver that message at the exact right place and time (for example, a notification to a client on an app or a digital self-service portal).”