Young professionals - a strategic target for insurers

Every year, the under-30s represent 700,000 new potential clients to be captured, equipped and made loyal, either through insurance offerings dedicated specifically to the younger generation (with suitable guarantees and lower subscriptions) or through standard offerings.

Specific behaviour patterns mean insurers have to change

To attract young people, insurers are having to adapt to their values:

• new modes of consumption: young people want transparency, are wary of packaged products and are ready to subscribe only for the service they really want. This is driving insurers to move from a “product” approach to a “client” approach, focused on their specific needs, with the emergence of new “usage-based” insurance models; 
• the central role played by smartphones and social media: insurers are developing mobility-oriented approaches (81% of young people aged between 18 and 24 have a smartphone). The avidity of youngsters for internet and the social media is also encouraging insurers to be present in those media;
• a new approach to the customer experience: 80% of youngsters aged between 18 and 24 consider using internet to choose and take out their insurance. The efforts of insurers are therefore focused on covering all the different channels in order to provide a seamless customer experience and keep close customer relationships. Insurers are busy developing a purchase process that enables people to move seamlessly from the screen (smartphone, tablet, etc.) to meetings with their counsellor without losing their customer relationships; 
• changing communication strategy: the traditionally technical pitch of insurers is being side-stepped by the use of brand content, in other words the creation and dissemination of media content designed specifically to win new clients;
• new opportunities thanks to the sharing economy boom: just like the rest of the population, young people are turning to this new mode of consumption, with co-tenancy or car-pooling for example. The interest of young people in such forms of sharing is driving insurers to develop partnerships. Over and beyond the purely commercial aspects, partners play a role as a trustworthy third party and reassure users.  

Must-have insurance for young people

This mainly includes the insurance that is compulsory or highly recommended, when moving into a new home, or buying a first car or motorcycle, or when their parents’ insurance no longer covers their health costs:

• home insurance: this compulsory insurance for tenants covers not only damage caused to the owner, but also a wider range of risks related to the home (damage caused to the premises but also to property). More often than not, it includes civil liability insurance to cover any damage caused to third parties in everyday life. Certain insurance packages have specific features for young people: the possibility of co-tenancy, a portion dedicated to the replacement as new of multi-media items in the case of theft or damage, additional services on top of reimbursement (sending a plumber in the event of water damage, transfer of property into storage or temporary accommodation, etc.);
• car and motorcycle insurance: the minimum compulsory insurance is “third-party insurance” which covers the financial consequences of material damage and/or bodily injury caused to third parties. Specific optional guarantees can also be subscribed to cover injuries caused to the driver or damage caused to the vehicle, with the benefit of assistance services (breakdown assistance from home or nearby, provision of a replacement vehicle, advice on vehicle maintenance, etc.). Special “young driver” offerings may allow a price reduction for young drivers (who have not had a previous accident or claim) as well as additional adapted services (post-licence driving lessons, for example, to benefit from a reduction in the insurance premium). 
• top-up health insurance: this is essential to make up for the often insufficient Social Security reimbursements, in particular for the costs of glasses or dental costs. Such top-up health insurance adapted for young people can take effect from subscription and frequently provides for direct payment of health professionals who accept this service to avoid having to pay up front for medication, X-rays or laboratory analyses, etc.

Insurance policies to cover additional risks

Optional policies enable young people to be well covered in the event of loss or theft:

• of their means of payment: insurance of the means of payment can cover the loss or theft of the means of payment (cheque book, credit card) as well as loss or theft of identity papers or keys;
• portable devices: insurance of portable devices can cover the theft, fraudulent use of or damage caused to a smartphone, tablet, portable computer or play station.

Not forgetting the subscription of a life insurance policy: thanks to regular payments made as early on as possible, a life insurance policy enables the gradual building up of a capital sum which may, for example, serve as a down payment to buy a first home or serve as an additional source of income for retirement, while benefiting from a tax break.  

Sources of the article:  Xerfi study (La banque et l’assurance face aux jeunes - June 2015) - Les Echos - L’Argus de l’Assurance