Think quickly: If you were tasked with something as staid and mundane as making insurance appealing to millennials, how would you do it? A flashy marketing campaign? Celebrity testimonials? Giveaways or incentives? All good answers—but all wrong. What you need is a little Zen: a nice clean website with a white background and simple, straightforward application process.
It is, admittedly, a trite response—but not as trite as you might think. Take Sonnet Insurance, a new online-only service offering home and auto protection. Though its advertising is currently plastered all over Toronto, it is the company's minimalist website that best captures its appeal. There, you enter basic information like your address and driver's licence number, answer a few questions, and in minutes you not only have a quote but also a policy and coverage, digitally delivered.
It is a remarkably different process from the phone calls and reams of paperwork usually associated with insurance. It's a shift away from tedious forms—and a step toward embracing the "digital values" that appeal to millennials: efficiency and meeting consumers on the devices they live on.
Such changes are not happening in a vacuum. The industry is facing pressure from all sides. Insurance companies are uniquely sensitive to interest rates, which have been at historically low levels since late 2009. Making matters worse is the fact that millennials are delaying purchases of homes and cars, and having their children later, making their need for insurance both less immediate and more optional. As a result, industry-wide insurance sales in Canada have been flat since 2010.
Several companies are responding by making it easier to sign up. Sonnet, for example, is actually an offshoot of Economical Insurance, a Canadian firm that is more than 140 years old; it offers traditional insurance through brokers.
The easy new application process was partly made possible by new techniques for processing reams of data. You used to have to provide information like a medical history or detailed claims record. Now, when you enter your details, they can be cross-checked with external third-party databases to include information that was once difficult for insurers to get. A house insurance quote might automatically include the age of a building or subdivision, while an auto quote can pull in accident data registered with police.
The net effect is that the information required from customers is minimized—a win-win for consumers and providers. It also shows that insurers, like so many other sectors, are responding to changing tastes with online and app-based services. Investing, for example, historically required time-consuming meetings with advisers. Now, robo-advisers ask a few revealing questions, use algorithms and analytics to process the information, and wrap the whole thing up in a pleasing, digital-only service.
This emphasis on digital efficiency can seem cold and empty. It may, however, be reason for optimism. After all, the systemic shifts affecting many industries—not just interest rates or investing habits, but the entirety of digital disruption—also present an opportunity for companies to respond in exactly the terms of the present: yes, a shiny new website, but one that reflects a smarter, more efficient way to meet customers' needs.