As the estimated 80 million people born between 1981 and 2001 enter the workforce and become active consumers, technology will play a critical role for insurance firms targeting those in the so-called “millennial generation” as both potential employees and consumers, according to a new survey released by Insurity and Microsoft Corp. at the ACORD LOMA Insurance Systems Forum 2008.
The Insurity/Microsoft “Millennials in Insurance Survey 2008,” conducted by Washington, D.C.-based KRC Research, found that not only are millennials expecting to use newer, more innovative technologies in the workplace — such as company portals, instant messaging and virtual meetings —but also they have heightened expectations as to how insurance companies should interact with them as consumers, such as the ability to view their full accounts online, access web-based support and instant-message agents directly.
“This is an industry still struggling with ‘green screens’ on desks, legacy mainframes in the back office and an employee population rapidly approaching retirement age,” said Bill Hartnett, U.S. insurance industry solutions director, Microsoft Corp. “Insurance companies face serious challenges in attracting millennials into their workforces and interacting with them as consumers. We believe technology can play a constructive role in addressing these issues.”
Millennials as Insurance Workers
As expected, millennials queried in the Insurity/Microsoft “Millennials in Insurance Survey 2008” reported using a wide variety of technology tools in their day-to-day lives, including social networking sites (77 percent), instant messaging (71 percent), Wikis (59 percent) and more. Nearly a third subscribed to more than one social networking site; 64 percent frequented them daily; and 17 percent reported spending 30 minutes to an hour each visit.
“Millennials have been marinated in digital technology almost since birth. When they come to work, their expectations are shaped by their experiences as students and consumers, and access to social computing technology is a big part of that. Employers should factor in those expectations when trying to recruit, retain and motivate young workers,” said Rob Salkowitz, workplace expert and author of Generation Blend.
Because of this proclivity to use technology in their personal lives, millennials surveyed had expectations of their employers providing similar technologies for their use in the workplace. These included: company-provided PCs (76 percent), mobile/smart phones (48 percent), internal company instant messenger (50 percent), social networking sites (40 percent), company intranet/portals (62 percent) and company-provided virtual meetings (42 percent).
More importantly, particularly for the insurance industry — which is facing a shortage of new workers and nearly 60 percent of its current employees over the age of 45 — 91 percent of millennials stated that being able to work with “newer, innovative technologies” in the workplace would make them more likely to consider a job opportunity. Other recruitment drivers included: the ability to telecommute/work from home (77 percent); flexible work schedules and locations (91 percent); and opportunities to work on collaborative team projects (72 percent).
However, a clear hurdle for recruiting younger workers into the insurance industry is the perception of the industry itself among millennials, the survey found. Seventy-one percent of millennials want to “work with people their own age,” yet large percentages of respondents stated that the industry “has older workers” (58 percent), is “old in general” (63 percent), is “not innovative” (53 percent) and has a “poor public image” (65 percent).
“Insurers already face a shortage of qualified staff, and the gap that retiring baby boomers will create could be crippling,” said Karen Pauli, senior analyst covering the insurance industry at TowerGroup. “As part of a comprehensive strategy to leverage technology for competitive advantage, carriers and agents need to adopt collaboration and business intelligence technologies today that will multiply the impact that their existing staff can have. They also need to look toward the consumer experience and adopt technologies that will attract and be familiar to the newer generation of workers and customers, such as social networking sites, instant messaging, and mobility.”
Millennials as Customers
While the insurance industry faces a challenge recruiting millennials to replace retirees, a bigger issue might be recruiting them as customers. Of those queried in the Insurity/Microsoft “Millennials in Insurance Survey 2008,” the majority currently own car insurance (55 percent) and health insurance (41 percent). However, as more millennials enter the workforce and purchase other insurance offerings, companies will need to adjust to better communicate and connect with younger consumers.
While the majority of millennials interact with their insurance companies today via phone/call centers (55 percent) vs. the web (8 percent), when asked about their preferred methods of interaction, millennials are less likely to choose phone/call centers (35 percent) and more likely to gravitate toward the web (13 percent). In fact, when asked what technologies companies should adopt to better serve customers, a large percentage of millennials surveyed ranked the following as “important”:
-Personal web portals with full view of their accounts (86 percent);
-Personal web portals with full view of their accounts (86 percent);
-Web-based support (89 percent);
-Automated phone responses (69 percent);
-Live online chats with agents (76 percent);
-Instant messaging with agents (67 percent);
-Company blog to post concerns and questions (69 percent); and
-Mobile alerts (59 percent).
Perhaps more worrisome for insurance companies, a combined 48 percent of millennials would “frequently” or “occasionally” blog in chat rooms or social networking sites if they encountered a poor customer experience with their carriers.
“In our experience delivering solutions to the insurance industry, we’re seeing carriers starting to put consumers at the center of their experience, using technology tools to provide more transparency, control and functionality in their products and associated processes,” said Bill Dochterman, vice president, marketing at Hartford-based Insurity, a ChoicePoint Asset Company. “This is in part driven by overall market dynamics, but also very much a reflection of this new wave of millennial workers and consumers.”
Washington, D.C.-based KRC Research conducted the Insurity/Microsoft “Millennials in Insurance Survey 2008” from April 21 to 27, and garnered responses from more than 700 young adults in the United States and Canada born from the year 1980 to 1990. Full survey results are available at http://www.microsoft.com/financialservices.