Insurance firms must keep up with millennials

[Photo: Courtesy]

Generally, the insurance industry is conservative. Insurers are not known for admitting the need and interest to transform their business models to suit current demographics. In fact, insurers have been quite circumspect when it comes to embracing new technology. However, the industry’s future depends on embracing this change, which is disrupting all industries and sectors.

In Kenya, millennials comprise up to 10.1 million of the 49.7 million population according to data from the Population Reference Bureau 2017. Millennials have grown up in today’s digital media world and are technology savvy, resourceful with tonnes of information at their disposal, and seek instant gratification. Their exposure to technology has influenced their behaviour, opinions and the choices on which products and services they use.

These characteristics drive businesses’ need to enhance customer experience, improve service levels, develop innovative products and shift interaction with their customers on different channels of communication. Therein lies excellent opportunities for businesses in different industries. Insurance companies are faced with the constant challenge of adapting their products and services for the millennial market segment in order to grow and increase their competitive advantage.

Insurance is by its very nature a ‘low-interest’ product category. Customers only need to deal with their insurer once, perhaps twice, a year and as a result there are limited opportunities for us to build trust, affinity, and loyalty with customers. Millennials expect their insurers to respond quickly and to understand their demands, values, preferred channels and circumstances.

Technology undoubtedly gives insurers a huge opportunity to add value to what they can cater to the unique needs of millennials as well as the ability to improve the frequency of engagement with them. For example, social media can be used in order to gain reviews on customer experiences, to gather feedback from customers in order to respond to customer complaints and queries. Tied with this is the opportunity that the ubiquitous mobile money platforms offer, eliminating the need for long queues to pay premiums. M-Pesa and now Pesalink have transformed how we make payments.

The benefits of product innovation and personalisation are extensive and allow a firm to be more flexible and respond to changing customer needs. A vital step in the journey of being better able to serve your customer is to gain insights on them.  Product development involves a needs analysis and the ability to do this effectively will define the future of insurance companies.

Forward thinking businesses realise how imperative it is to be customer centric.  Insurers must recognise that they have a new responsibility to millennials where apart from being there when they need us, we should also seek to add value by helping them to confidently manage the risk in their daily lives and be proactive in the development and provision of a differentiated and customised customer experience.

If the insurance sector wants to thrive it must recognise segments whose buying power is on the rise and the surge of the millennial cannot be ignored. They are the future, and brands have no choice but to catch them early.

- The writer is the CEO of Apollo Group whose subsidiaries are APA Insurance and APA Life