ProtectionJan 25 2018

What are protection providers doing to engage millennials?

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What are protection providers doing to engage millennials?

Advisers faced with clients who fall into the millennial age group may, at one time, have had a limited range of protection products to offer them.

As Tom Conner, director at Drewberry Insurance remarks, the protection market could be accused of not really adapting to help younger people, with the technology a long way behind other markets.

In the past few years, the protection industry has been trying harder to widen its offering to include products and services which appeal more to millennials though.

After all, the needs of many clients, not just millennials, are changing beyond the basic, traditional critical illness, life insurance and income protection products.

Wellbeing and lifestyle needs

Craig Brown, director, intermediary at Legal & General, recalls: “Historically, clients looked for security which came from a provider’s heritage and history. However, nowadays this seems less important for younger generations, who are much more influenced by brand image and technology.” 

One of the reasons for a change in the way protection is marketed to younger people is their attitude to health and lifestyle.

Mark Cracknell, head of protection distribution at Aviva, suggests millennials are more aware of their own wellbeing than any other segment of the population.

“Therefore, I think what we need to do is we need to bring together that whole awareness of wellbeing, together with insurance and the benefits that insurance can deliver,” he suggests.

“Yes, they’re going to live longer, potentially, but they will have some form of critical illness. What we have to do is show that segment of the population the reason why they should purchase these products.”

The protection industry is slowly grasping that millennials don't want to hear about worst case scenarios.Iona Bain

Mr Cracknell notes very often millennials will still go through an adviser, particularly a mortgage adviser as their first port of call when buying a new home.

“So we have to be able to provide those mortgage advisers with a proposition that appeals to those customers,” he adds.

For Aviva, this has meant evolving its critical illness proposition to incorporate elements of health insurance and general insurance, creating one proposition which a customer can purchase through an adviser.

More is being done. Mr Cracknell also reveals a new campaign from Aviva, which should help those millennials who are not at the stage of applying for a mortgage, and who may be missing out on receiving protection advice.

He explains: “We’re launching a campaign in the intermediary market [in January] on the opportunities for advice to people who are renting… to try and help and support advisers to open up conversations with customers to say, yes, you are renting and this may be a long-term solution for you but don’t forget you still have insurance needs.”

Tech offerings

Mr Brown suggests the protection market has seen greater product innovation, with providers offering additional benefits to their offerings, such as rehabilitation services, making the policies more interactive and practical in helping people recover and return to work as soon as possible.

Vitality Health is currently offering an Apple Watch Series 3 with its health and life insurance, the idea being that customers can make monthly payments of nothing up to £12.50, depending on how active they are.

The proposition has been well advertised, with posters on the London Underground likely to be targeting exactly the millennials the industry has been worried about alienating in the past.

“Vitality are leading the way with their advertising, with subtle messages about brand rather than product that’s more likely to appeal to younger consumers,” remarks Emma Thomson, life office relationship director at LifeSearch.

She urges the industry to do more, however.

The days of stable, nine-to-five employment have gone. It is vital that as insurers we reflect the changing nature of the workforce.Steve Bryan

Iona Bain, founder of the Young Money blog, believes: “The protection industry is slowly grasping that millennials don't want to hear about worst case scenarios. 

“They have started offering positive benefits that can be used in the here and now, appealing particularly to a new generation interested in ‘self-care’. 

“Incentives are offered for exercise, healthy eating and medical check-ups. These range from discounts on gym membership and smoking cessation services, to money off cinema tickets and coffee.”

In January, Canada Life announced its individual protection customers will be given access to a wellbeing app and website, as well as cinema ticket discounts, and retail discounts.

The Canada Life and PersonalCare apps promise to provide Canada Life customers "with a wealth of information to help them with work, life and everything in between", according to the press release.

Some insurers are recognising that the way people are employed, and this affects millennials in particular, is changing.

Steve Bryan, director of distribution and marketing at The Exeter, explains how they have made their product offering more flexible.

"In the past, income protection has been too rigid, as it failed to account for changing circumstances," he points out. 

"By contrast, we provide self-employed and contract workers with options that account for fluctuating incomes or breaks between contracts. The days of stable, nine to five employment have gone. It is vital that as insurers we reflect the changing nature of the workforce.”

Simplifying products

It is not all about more complex products and in many cases protection providers have been simplifying their range to engage those who are perhaps not as familiar with protection and its benefits.

Stephen Crosbie, protection director at Aegon, observes: “In recent years we’ve seen a flurry of simplified products enter the market. These are aimed at the young and healthy. 

“They are much more accessible with online instant decisions providing a simple and sometimes limited form of cover but this is always better than no cover at all.” 

For Mr Crosbie, these types of products are “a good start” that will always benefit from regularly reviewing whether the type and level of cover is appropriate as the clients’ needs develop over time.

As an industry we need to be cautious to ensure the main driver for sales is not these added services, but rather the underlying benefit of protection.Craig Brown

Aviva’s Mr Cracknell says the firm launched a low-cost income protection policy in October 2017 in an effort to offer more affordable products.

He is wary that this approach does not cheapen and ultimately, devalue the product though.

Mr Brown also sounds a note of caution about some of the gimmicks being offered by providers.

“As an industry we need to be cautious to ensure the main driver for sales is not these added services, but rather the underlying benefit of protection,” he says.

“Clients who want to take out cover should fully understand the risks they are exposed to in order to purchase the right type of protection for them, which will ultimately meet their needs should the worst happen.”

eleanor.duncan@ft.com