Millennials and insurance : an evaluation of the main factors that affect the uptake of insurance products amongst millennials

Abstract

Millennials, who are the biggest living generation, have been observed to be reluctant to buy insurance. This study examines the factors that affect their insurance uptake by focusing on situational, personal, psychological and social factors. The use of technology in the insurance industry, or InsurTech, and how these technological advances are affecting the uptake of insurance amongst this generation is also analysed. It investigates how insurance companies can make insurance engaging for this generation. Quantitative research in the form of an online questionnaire was conducted with 328 millennials born between 1982 and 2000. Millennials were observed to be loyal to their insurance providers and would only switch providers if they had a bad experience. A general lack of knowledge about insurance amongst millennials was noted, where many have the misconception that insurance is too expensive whilst others believe that they do not need to buy insurance cover. It was noted that the younger millennials were highly influenced by their family as to what insurance provider to choose. Millennials were noted to be technology savvy and use technology in every aspect of their lives. However, when it comes to InsurTech, the use of wearables, telematics, dashcams and sensors was found to be low. The more technology savvy millennials were observed to own wearables while those millennials that have telematics and dashcams installed in their cars and sensors at home were in fact very few. A lack of knowledge as to what telematics are was observed. Two essential tools to make insurance interesting for millennials were noted to be technology and innovation. It was observed that millennials would like insurance companies to provide new types of insurance cover such as on demand insurance as well as products that are more tailored to their specific requirements.