Rethinking Ways to Capture the Gen Y Market

4 big ways the insurance industry can improve its approach to this market 

1. Don’t take it to the extreme
During Prudential’s focus groups, we asked young adults to make collages that visually evoked the concept of life insurance. Invariably, Gen Yers included pictures of motocross riders, skydivers, and other extreme sport participants. So we built an online banner ad campaign around those images — and much to our surprise, the test groups hated it. They didn’t identify with a snowboarder hitting a half-pipe or a person jumping out of a plane.

Rather, they simply thought that the person was engaging in risky activity and most likely would have a higher likelihood of dying before they should.

What we did learn is that we have to make the case for life insurance in a way that speaks directly to young adults and their preconceived notions of why one would purchase life insurance. And surprisingly, this is not much different than other generations; an effective campaign must call to mind families, friends, or peers. You can’t try to be too cool or too flip when dealing with such a serious topic, and your message has to be grounded in reality.

2. The value of a good education
We all know how tech-savvy Generation Y is as a whole, and how the Internet has provided instant access to resources that would have been unimaginable not too long ago. Yet with all that at their fingertips, young adults have surprisingly large gaps in their life insurance knowledge. In our study, almost 60 percent of Gen Yers said that they could find the best life insurance deals on the Internet, apparently unaware that it’s uncommon for policies to be purchased entirely online.

Young adults also don’t seem to understand the differences among the available types of life insurance, nor are they aware that companies usually require a medical exam.

These findings suggest that we should provide better educational materials, online primers, and tools to compare policies, and we should present them in clearer, more compelling ways. Gen Y wants to find the answers about life insurance themselves, so let’s make it easier for them to uncover that basic knowledge.

 3. Good coverage is priceless — but what about the price?
You can’t weigh the costs and benefits of life insurance if you have no clue about premiums. One disincentive for life insurance coverage among Gen Yers is the perceived expense. In one of our focus groups, a moderator asked participants to guess the typical monthly premium of a term life insurance policy. After a lengthy discussion about how expensive it might be, one person finally answered $100 per month; another guessed $150. Most of the study participants were much more open to the idea of purchasing life insurance once we told them it could be substantially less expensive, depending on individual circumstances and coverage amounts.

Clearly, the attractive premiums for which younger age groups quality can be a key selling point for Gen Y. It also emerged that this generation prefers to weigh costs on a monthly basis — much like a cell phone plan or Internet access fee — rather than using the annualized cost preferred by the insurance industry.

4. Lower barriers for beginners
Most Gen Yers wanted the option of buying coverage online through a quick and simple process, similar to how they purchase car insurance. They want to be able to buy small amounts of coverage so that their monthly budget is not dramatically affected, and yet they feel a sense of responsibility for building their financial portfolio. They would also like the monthly cost to be automatically deducted from their checking account or charged monthly to their debit card.

Historically, insurers haven’t been in the business of selling products directly to consumers; it usually falls on the financial professional to determine needs and guide clients toward the coverage that best suits them. By allowing Gen Yers to get their feet wet with foundational coverage, we may make them even more receptive to working with financial professionals in the future as their needs change and assets increase.

In the end, there’s no magic formula for bringing Gen Yers into the insurance fold insurance, but simple and sensible changes designed to educate and build awareness can give younger consumers the power to make informed decisions and act on them in a convenient way. It’s a start, at any rate.

Joan H. Cleveland is senior vice president of business development for Prudential Individual Life Insurance, a division of The Prudential Insurance Company of America. She can be reached at joan.cleveland@prudential.com.

November Issue of Agent Sales Journal Magazine
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