Across industries, millennials have forced businesses to adapt and redesign how they operate. Like strong ocean winds with sailors, millennials are altering the course of companies the world over and the insurance sector is no exception.
Millennials are people born between 1980 and 1996, characterized by their heavy interaction with technology.
Thanks to the breathtaking speed at which technology is developing, millennials have developed unique characteristics that have left companies trying to catch up; including digital savviness, short attention spans (due to a lot of distraction from information overload on the internet) and a tendency to be more conscious about businesses’ impact on society.
Nearly three-quarters of our population in Kenya is under 30 years, with 10.8 million people between the ages of 15-30 years. Considering the population is only getting younger, insurance companies are beginning to see the need to prioritize service delivery, customer experience and accessibility across devices in order to boost insurance penetration among the youth.
For instance, a study by insurance, consulting and research firm Limra found that less than 20 percent of people between the ages of 18-34 said they were likely to buy life insurance. This is attributable to millennials’ tendency to delay in getting married, having children or buying homes-a clear signal that their market different and thus has to be handled innovatively.
Locally, Industry disruptors like Grassroots Bima (named among the top 100 financial technology firms in the world in 2017), Bimanet and UAP Insurance (through a partnership with Safaricom) are successfully innovating with mobile-driven services, like the WazInsure app and M-TIBA to reach customers where they are.
Additionally, insurance companies could shake up their existing policies and offer flexible payment options where the insured can modify the premium amount and scheduling of payments as they see fit. Although this route could negatively affect insurers’ cash flow that is necessary for customer acquisition or product development, risk mitigation strategies like credit insurance, to hedge against policyholders who fail to pay could make it successful.
This is one of the principles of the increasingly popular concept of on-demand insurance, where you only take an insurance cover when you are exposed to a risk, for instance, only having to pay for life insurance when you go mountain climbing, or paying accident insurance when trying out an extreme sport like off-road biking.
Quoting James Norman, KPMG East Africa Head of Insurance, about what insurers can do to reach more millennials, “take insurance to them (millennials), make it useful and interesting, a value-add that fits their lifestyle.”