This is an excerpt from the 2018 State of the Insurance Industry Report by Michael Jans: The Death of the Old School Agency: The rise of the new marketing masters. To download the full report, click here.
The average agency principal with 20% or more equity is 55 years old
At 17%, the average age is 66.
Agency principals aren’t the only ‘old’ worker in the insurance industry. McKinsey & Co. recently estimated that 25% of insurance workers will be retirement-ready in (or before) 2018.
Contrast that with today’s consumer.
Agency Universe Study, presented by Spencer M. Houldin, Immediate Past Chair, IIABA, at AppliedNet Executive Session, September, 2018.
The Millennial generation – at roughly 20-36 years old – is the largest generation in North America.
At 83 million, they’re taking over the economy.
And, pertinent to the insurance industry, as they mature, they need more insurance. They’re buying cars. They’re buying homes. They’re running businesses.
But, they’re not lost to the agency channel.
First, let’s destroy the myth:
Millennials only care about price
Not true.
One survey reports that the Millennial generation is the most loyal generation to their favorite brands – with over 60% claiming they are ‘often’ or ‘always’ loyal to their favorite brands.
As it is with most customer relationships, price doesn’t disappear as a purchasing value. But, Millennials force brands to raise their game on key values of trust, connectedness and authenticity – the very values that allow agencies to transcend the low Customer Lifetime Value of selling insurance as a commodity.
How must the modern agency earn the loyalty of this emerging powerhouse generation? They have to understand them:
- They are connected – 87% of Millennials use two or three tech devices every day. 30% use four or more per day. These are the digital natives who simply expect their brands to ‘be there’ with them online. In addition to researching you, they’ll talk about you – whether they’re happy or unhappy. 43.5% report spreading the word about products and services to their online networks.
- It’s not that they buy online…but they discover – A majority of Millennials make most purchases offline. But, they take their pre-purchase online research seriously. 93% claim they rely on blogs and online reviews to influence their purchase. (And, yes, your blog matters…for more than SEO. 33% say they rely ‘mostly on blogs before they make a purchase.’)
- ‘Old school’ advertising won’t work – Only 1% of Millennials said that ‘a compelling advertisement would make them trust a brand more.’ No, they’re looking for ‘authenticity.’ An agency’s claims about itself appear to pale compared to its ability to present itself as genuine, caring about and close to the customer, and as a viable and positive force in the community. 75% say that it’s either ‘fairly or very important’ that a company gives back to society.’
- They want to be close to you…and vice versa – 62% say that if a brand engages with them on social media, it will enhance their loyalty. More striking, 42% say that they are interested in helping companies ‘co-create’ future products and services – a virtual impossibility if the agency merely sells ‘insurance-as-commodity,’ but a surprisingly viable option as agencies mature into offering thoughtful customer journeys and experiences.
Strategic response to the rise of the Millennial generation
The timing of most trends is difficult to predict. Not this one.
The Millennial generation is taking over the economy. Today’s agency must act quickly to attract them, both as a substantial and growing segment of its customer base, and as part of an engaged workforce.
Their demand for engagement, value and experience pushes today’s agency into lucrative territory – beyond the ‘commodity broker’ behavior of price-first insurance offerings. Perhaps more than any other generation, if their loyalty is earned, they will reward the innovative agency the most richly.
The effective use of modern, connecting technologies – social media and marketing automation – kills two birds. It supports the work environment most attractive to the Millennial worker. And, it allows the agency to prove itself to the young consumer: by delivering unique value, guiding the customer journey, and respecting the interests of the individual consumer.
This is an excerpt from the 2018 State of the Insurance Industry Report by Michael Jans: The Death of the Old School Agency: The rise of the new marketing masters. To download the full report, click here.
