How do we win the hearts and minds of today’s consumers?
With this question, Robert A. Kerzner, CLU, ChFC, president and CEO of LIMRA, LOMA and LL Global, opened his speech at the LIMRA Annual Conference and challenged the insurance industry to look at new approaches to engage consumers.
Kerzner said that while the industry does a good job of providing security for families, things are different today. For starters, the definitions of “family” and “American household” are very different from what they were in the past.
U.S. Census Bureau data show the traditional household–a married couple with children–represented 40 percent of all households in 1970; now, it stands at only 20 percent. The number of single-parent households has more than doubled since 1970, and only 51 percent of people are getting married compared to 72 percent in 1960. And those who marry do so later. In 1960, half of all U.S. households had children. By 2010, that number was down to 1 in 5 households.
Shifts in ethnic demographics are happening now and will continue into the future. The U.S. Hispanic population is expected to grow 125 percent by 2060, and the Asian population will more than double by 2060.
In the midst of all this change, Gen Y consumers are coming of age and represent a huge opportunity for insurers. A LIMRA generational study found that 53 percent of Gen Y consumers said they planned to buy life insurance within the next year.
Addressing the challenges
The challenge is how to engage them. Kerzner said the toughest competition for insurance companies is not within the industry but from outside the industry. With Amazon, Apple and various social-media platforms all furiously competing for consumer attention, it’s no wonder that consumers are distracted and hard to reach.
Kerzner presented examples of how other industries are breaking through the clutter in innovative ways to engage today’s consumers. One popular technique he referenced is “gamification,” the use of game elements and design in a non-game context. For example, Ford has an online game in which consumers compete to design the best virtual Mustang. Charles Schwab offers the “It’s Your Life Game” to help people see how financial decisions, both large and small, can affect their future.
While some might dismiss Gen Y’s engagement with games to improve their knowledge, it’s not a new trend. In the early 1980s, young adult Boomers made Trivial Pursuit a global phenomenon. Change the platform from a game board to a phone app and today’s young adults aren’t so different from their parents. The idea of having fun while learning new things is effective and timeless.
While Gen Y consumers like fun, they are also more educated than past generations, with 4 in 10 having a college degree. LIMRA research has shown that these consumers are interested in learning about their life insurance coverage needs, but they don’t want to be sold. They perceive the typical sales approach as off-putting.