How to insure millenials’ loyalty

Insurers need to radically re-imagine their processes and products to get customers - especially millennials - to stay with them

Insurers aren't doing a very good job of delivering value to their younger customers.

That's one of the findings of Bain & Company's survey of more than 174,000 retail insurance customers in 18 countries.

Insurers are falling short on providing value to customers of all ages, but the gap is most pronounced among digitally active millennials - who expect instant, personalised service on their smartphones and tablets. That raises the question of how fit insurers are for the future.

Insurance customers have a few fundamental needs. They want a good selection of policies at reasonable prices. They want clear, transparent information, and they want smooth, hassle-free interactions. When they're filing a claim, they expect their insurers to help alleviate their anxiety, not add to it.

Increasingly, they also want their providers to provide non-insurance services, such as roadside assistance and advice on leading healthy lives.

Young people are looking for all these things - and more.

In addition to the basics, they're seeking a sense of community and purpose.

And they're not happy with what they're getting.

Fewer than 20 per cent of millennials in the US give their property-and-casualty providers high scores for key upper-level elements, such as motivation, affiliation and belonging and self-transcendence.

Incumbent insurers are grappling with this value deficit at the same time as they're facing the kind of digital disruption that has roiled other industries from retail to travel to banking.

A majority of customers are open to buying insurance from new entrants, including those from outside the industry, such as tech companies or car manufacturers. Among digitally active millennials, that figure can hit 90 per cent or higher.

Insurers are taking steps to address this issue.

Some try to disrupt themselves by creating a company-within-a-company that aims to be digitally oriented, low-cost and customer-centric, but most are learning that they can't just put a low-cost, digital veneer on old-school products.

They need to radically re-imagine their approach.

Our survey shows that the insurers with the best loyalty ratings stand out in these key areas.


Loyalty leaders deliver quality products at competitive prices and provide experiences that are personalised and simple, both online and offline.

The companies pay attention to times when policyholders need support after an accident, injury, fire or theft.

Insurance leaders go beyond insurance. They establish themselves in an ecosystem of interconnected services that attract customers and build loyalty.

Insurers that offer ecosystem services are able to connect with consumers on emotional and life-changing elements - the ones prized by millennials.

Insurance leaders innovate constantly. Insurance is a highly regulated industry with many barriers to entry. But such obstacles can be overcome. Incumbents can't be complacent.

Leading insurers start by making processes more efficient and improving customer service.

Some are creating new business models, including digital-first platforms.

Insurers that understand and deliver the value that matters most to customers can put themselves on a path to sustained loyalty and lasting growth.

The writers are from Bain.
This is an edited version of an article that was published in The Business Times yesterday.