In their highly informative report “Insurers on the Brink: Disrupt or Be Disrupted,” Deloitte Center for Financial Services touches on a common theme in the modern insurance industry: trust. While many older consumers still trust the insurance industry’s authority on matters of risk management, their children and grandchildren are not so confident.
Early generations of Americans were raised with the notion that insurance is a necessity, making it a relatively stable industry. However, faith in what the report coins “industry orthodoxies” may have actually rendered the industry more vulnerable to disruption. As the banking and financial services sectors are discovering, making assumptions about the indispensability of traditional business models leaves the door wide open for those who don’t adhere to the same orthodoxies.
Who would have imagined, for instance, that the world of investments could be brought easily and cheaply to the masses through apps like Acorns and Betterment? Or that financial planning could be performed on a smartphone with Mint and Level? Or that even the nation’s largest brick-and-mortar banks could have their foundations shaken by online alternatives like Bank of Internet and Simple?
While Generation Xers tend to be highly suspicious of traditional institutions, Millennials have no allegiance to the traditional insurance model whatsoever. They’ve come of age during a time of social upheaval and financial crisis, and that has left them looking for better ways to handle life’s necessities. They’re actively pursuing new models and inventing them where none existed.
That means that independent agencies should stay abreast of the innovations being introduced by these upstart generations. Trusting the old orthodoxies that insist foundational industries like insurance cannot be disrupted could render agencies irrelevant.
What can your agency do to stay relevant to Generation Xers and Millennials?
The only way to build trust is to build relationships. Modern consumers are wary of sales pitches. However, they eagerly connect with and even advocate for businesses via social platforms.
Modern consumers do not trust advertising. In fact, they’ve continuously inventing new apps to block ads altogether. Rather than spending exorbitant rates on traditional advertising methods, look to inbound marketing methods that provide valuable information to consumers. They’ll seek your agency out if you show that you’re committed to transparent, helpful communication.
There was never a time in history when more paperwork was an advantage. Now, you can mostly eliminate the need for paper-pushing by modernizing your agency’s website to allow for clients to provide and store information, make policy choices, and compare rates and options from the comfort of their own homes (without paper clips, folders, or stamps).
American consumers are becoming immune to scare tactics, and they’re acutely aware of how salespeople use these old-fashioned strategies to confuse buyers. Differentiate your agency by simplifying language and providing easy-to-access-and-to-digest research.