The Future Is Now If Insurers Want To Land Millennial Clients

BOSTON -- Millennials are no longer just a future fantasy market for insurers -- the future is now.

"Companies have been interested in what is going to turn millennials on for a long time," said Todd Silverhart, corporate vice president and director of LIMRA's Insurance Research. "But now the millennials have become their target audience. We know that age range, from 20 to 40, is a really important target for the purchase of life insurance, and that’s right where millennials are now."

Silverhart led a session delving into the thoughts, needs and concerns of young people at the LIMRA 2019 Annual Conference. He assembled a panel of millennials for a light, freewheeling discussion.

Understandably, there is "tremendous interest" on the part of carriers to better understand and penetrate the millennial market, Silverhart said. At roughly 73 million members, it is expected that millennials will surpass baby boomers soon and become the largest generation, he added.

In their latest Life Insurance Barometer Study, done in conjunction with Life Happens, LIMRA found that 51% of millennials say they own life insurance, which is slightly lower than the overall population's average of 57%. But the more interesting number is the 81% who agree they need life insurance, or if they own life insurance, they do not own enough coverage.

"The gap between the percentage that own and the percentage that think need some of 30% is really significant," Silverhart said. "If you look at it from the perspective of the consumers, these are individuals who recognize that they’re financially vulnerable. From the perspective of the carriers, it suggests tremendous opportunity to meet the unmet need."

That gap is repeated with smaller numbers when it comes to annuities. Seven percent of millennials say they own an annuity, but 45% say they need or need more annuity assets in their portfolio.

'High Levels Of Debt'

Another issue Silverhart wants to explore is how the troubling millennial debt burden is impacting the purchase of needed life insurance and annuities.

According to Forbes, as of the second quarter of the 2019 fiscal year, borrowers ages 25 to 34 -- a significant share of the millennial population -- accounted for $497.6 billion in outstanding student loan debt for about 15.1 million borrowers.

"Our retirement research indicates that 40% of millennials report that they are not actively saving for retirement at the workplace," Silverhart said. "The high levels of debt, both student loans and credit card debt ... may be delaying their ability to contribute to employer-sponsored retirement plans."

One thing that might be an obvious trend is the millennial desire for buy life insurance online, only that trend isn't backed up by the research.

"Our research doesn’t support that contention," Silverhart said. "We consistently find that millennials continue to value personal advisors. We recognize that the internet has become established as an important source of information. But we found that most millennials, 55%, indicated that they would research online and buy from an advisor or agent. And that’s a consistent finding that we have."

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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