Study finds new generation of insurance customers prefer real, personal exchanges and digital channels other than social media
Millennials in the UK are shunning social media when it comes to asking questions and making purchasing decisions about insurance in favour of personal interactions and a blend of digital and online channels (omni-channel) other than social media, according to research conducted by Millennial generation researchers Decode. The study was conducted on behalf of strategic business applications company Pegasystems Inc. (NASDAQ: PEGA), and leading global provider of consulting, technology and outsourcing services Capgemini, and was advised on by one of the UK’s top generational sociologists Dr Paul Redmond.
Surprisingly, it found that of 1,000 UK residents between the ages of 18 and 34 asked to rank their preferences with regard to selecting and buying insurance, the ability to speak to somebody either in person or on the telephone when interacting with an insurer achieved the second highest ranking preference (42 per cent). Conversely, it also demonstrated that very few Millennials had any strong preference for using social media to interact with insurers, with respondents ranking the ability to get a response to a tweet as their ninth most important consideration (8 per cent). Meanwhile, the number one preference for Millennials interacting with insurers was getting a response to email queries within 24 hours (46 per cent). Having the ability to access all their insurance information online was also ranked third (35 per cent), suggesting that although Generation Y is reluctant to use social channels to make financial decisions, they are still heavily reliant on a number of other digital and online channels.
Commenting on the findings, Dr Paul Redmond said: “While maybe surprising to insurers, these results confirm much of what we’re discovering about Millennials and the way that they behave. They don’t see themselves as digitally savvy because for them digital and social tools are a given, and it’s clear that a strong bias exists for wanting to deal with actual people. No doubt this explains why Millennials are unconvinced about interacting with insurance providers via social media. Use of social media, even amongst the young, is still used primarily for social transactions. Crucially, however, when it comes to making critical financial decisions, social media is still viewed with some suspicion by the very people for whom it has been developed, and insurers will need to bear this in mind.”
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Interestingly, the study also found that the number one preference for influencing the purchase of insurance products was using price comparison websites (51 per cent), ahead of online web searches (48 per cent) and word of mouth from friends (27 per cent) and family (24 per cent). Meanwhile, price (70 per cent) was confirmed as the top reason for selecting particular insurance brands, with reputation cited as the second biggest factor (46 per cent) and ease of purchasing (40 per cent) as the third. By contrast, social media again ranked low with a ranking of fifth. Only 16 per cent of Millennials said that searching social media for good or bad reviews of products was an important factor in influencing the purchase of insurance.
Tony Tarquini, Director, Industry Principal, Insurance at Pegasystems said: “Millennials and the social and digital tools they use are clearly a disruptive force, but this study suggests that this is perhaps not to the extent that we have come to expect. Although digital clearly matters, there’s no doubt that adding it to face-to-face interactions as part of a seamless omni-channel offering is how insurers should reach out to this new generation of customers. There’s a huge amount of insight to be gleaned from the study and it’s clear that the Millennial customer journey isn’t consistent and that those who focus on blended interactions and consistency of experience across multiple channels will be those that are most successful.”
Nigel Walsh, Vice President & Head of UK Insurance at Capgemini said: “There’s no doubt that these findings challenge many of the existing perceptions insurers will have about Millennials and what they need to be doing to engage with them. Perhaps above all, it shows us that even in this uber digital age, the tried and trusted ways to communicate are sometimes the best, and that even if you are able to deliver a consistent experience to customers across all channels, there’s no substitute for the personal touch, especially where the service is not fully understood.”