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Millennials: Forcing change upon our industry

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An iPhone 6 alarm is ringing in the distance. A groggy hand turns it off and proceeds to check Facebook, Twitter, SnapChat and, finally, email. After a complete catch-up with technology, the young person is up and ready to tackle the world.

While the scenario above is not that uncommon for many young professionals nowadays, does it seem different from your typical morning routine? Welcome to an insight into the world of a millennial, a digital demographic existing where the walls are painted in bright colors — or there are no walls, as almost everything is done online.

But, who are millennials, really?

While there’s no exact date that pinpoints the beginning and end of this generation, the Pew Research Center defines them as those being born between 1981 and 1997, making them between the ages of 18 and 34 today.

Some  historical events that have marked this generation include: 9/11, the Great Recession, a record amount of student loan debt, a lack of available employment opportunities, the surging cost of living, a technological revolution and the postponement of starting families.

These events have shaped millennials’ lifestyles. This generation has learned to adapt to a fast-changing environment. The circumstances of their lives have made them savers, just when the bulk of this demographic began graduating college. This has helped them learn how to reinvent themselves in the face of adversity.

Technology = a new world

Quick adoption of new technologies has helped open a whole new world of opportunities for millennials that previous generations didn’t have, such as being able to sell their hand-made products online to anyone in the world with an Internet connection, or being able to build an app and launch their start-up business with it.

Rheir purchasing power and consumer profiles have changed, too, because of the advances and availability of technology. Forbes estimates that millennials amount to approximately $200 billion in annual buying power.

At their fingertips lies a world of endless buying possibilities with millions of sources of information. Millennials become research experts before making any final decision about purchases. All of these facts are pushing the insurance and financial industries to change the way that they operate.

And the millennials of today, young and ambitious, with a thirst for knowledge and looking for ways to help those around them, are already becoming your clients. If you aren’t reaching out to this generation, your business might be in trouble soon.

A fast change

With the average age of insurance professionals pegged at 59 years old, according to McKinsey & Co., it’s no surprise that there’s a big — and sudden — demographic change happening in the industry right now. “By 2020, the insurance industry will be hiring around 400,000 people,” said Lindsey Pollak, The Hartford’s millennial workplace expert. “This is happening because of the retirement of baby boomers and the growth of the industry.”

“The problem is, only about 5 percent of millennial students in college say they are interested in studying a field related to insurance,” adds Pollak, who penned a book on the subject titled “Becoming the Boss.”

“It’s an industry image problem,” she adds. It’s an obstacle that companies like The Hartford, organizations like Life Happens, and even independent advisors in the field are battling to change with programs for educating the public and highlighting the positives of the industry.

Millennials, meet the insurance industry

According to The Hartford’s 2014 Millennial Leadership Survey, the number one thing millennials want is training and development. The second is coaching and mentoring, and that’s where well-seasoned advisors come in.

Rather than showcasing how much money one can make in this industry, the desire to grow and help the world is more important to millennials. “The industry under-markets itself, it’s humble, it’s modest,” Pollak added. “You don’t see people boasting about it like in Silicon Valley. The challenge lies in how to present this industry as innovative, market it to millennials, show how great it can be and how we are helping people. It’s a forward-thinking industry.”

How to do this? One good example is having user-generated reviews or testimonials on your website, since these type of stories are very powerful — and there’s nothing more important to a millennial than a review.  

A recent study by LIMRA found that millennials are attracted to companies that are going to invest and support them, according to two of its analysts, Breana Macken and Emily Tracey. “The ‘cattle herding approach,’ in which carriers recruit tons of people and let the stronger survive and the other ones leave, doesn’t work. That’s a turn-off for young advisors,” said Tracey.

And companies should remember to evaluate the communication process with millennials. “Is it in a way that they want to be communicated with?” asks Amy McIlwain, vice president of social and digital strategy at Denver-based Moore Communications Group.

Humanizing your brand will help you attract new blood. “Make the company more personable by creating a feeling of community, support and ability to grow and be mentored,” McIlwain recommends. For example, you could have a blog about your company culture. Leadership within the company should be active on social media, too.

Another idea on how to change the image of the industry is to use humor. “It is a difficult thing to ask people to imagine a future that might not happen and is unpleasant to think about, which is death,” says Matt Wallaert, behavioral scientist at Microsoft. Also, focus on the entrepreneurial aspect of owning an agency and explain the structure: how does an agency work? Explain to people that you’re not an employee under a carrier, Wallaert recommends.

How can millennials excel in this industry?

The first three years of a career in the insurance industry are going to be about hanging in there, according to Samuel Rad, a millennial advisor based in Beverly Hills, California, who experienced this himself. But, if you have grit, you will be successful. Being the person who says, “What else can I do today?” might just be the silver bullet that will help anyone be successful.

There are challenges too, such as how to build a strong book of business, how to find or source new clients and how to balance owning a business and the daily tasks of having an office. So how can new advisors overcome these challenges?

Macken and Tracey recommend that advisors go on social media, network, cold call and get that roster of clients off the ground. But how to balance managing an office and calling, scheduling and meeting clients? Tracey said that’s where mentoring and having real-world experience comes in.

For example, young advisors don’t have experience in establishing rapport with older clients. How can a young advisor understand a client who is going through retirement when they themselves might just be paying off their own student loans? That’s where the expertise of a seasoned mentor comes into play.

So stop what you are doing right now and ask yourself: What are you doing to reach millennials? They’re both your future clients and employees.

See also:

Meet the young agent who is cornering the high risk life insurance market

What do millennials think about their finances? [Infographic]

4 unusual ways millennials are different from boomers

Think you know millennials? Meet the “yuccie”