Millennials’ Late Homeownership, Increased Migration Among Key Trends Impacting Insurers
CHICAGO, May 11, 2022 (GLOBE NEWSWIRE) -- Fifteen years following the onset of the Great Recession, impacts are still being felt on homeownership and insurance usage in the U.S. A new TransUnion (NYSE: TRU) study found that Millennials and youngest Gen X experienced significant delays in homeownership due to the Great Recession. In addition, out-of-state migration patterns—partially driven by the COVID-19 pandemic—pose risks to insurance providers’ books of business.
These and other emerging trends were examined at TransUnion’s annual Insurance Summit, which gathers leaders from the top international insurance carriers.
The main Summit sessions were guided by proprietary TransUnion data and analysis and findings from a survey of 2,791 consumers conducted between February and March 2022. The survey focused on consumer near-term coverage needs across multiple lines of business and provided a better understanding of what kinds of support and communication consumers expect from their insurance providers.
“Millennials and even parts of Gen Z are coming to the housing market for the first time later in life,” said Mark McElroy, executive vice president and head of TransUnion’s insurance business. “They’re taking a different approach to engaging with their insurance providers and expecting services and counsel beyond basic coverage of their homes.”
Younger Consumers Delaying Homeownership
Percentage of adults who became homeowners by age 30
Mid-Gen X (born 1971-1975)
Youngest Gen X (born 1976-1980)
Oldest Millennials (born 1981-1985)
Mid-Millennials (born 1986-1990)
Those gaps are finally beginning to narrow as Millennials now drive the majority of first-time home purchases, accounting for more than half of purchase originations by the end of 2021. As these cohorts reach typical adulthood milestones, many think differently than previous generations about how they utilize and engage with insurance providers.
TransUnion’s data analysis has found these groups expect digital shopping experiences as they compare policies and prices. However, their primary channel for direct communication at purchase and claims is a phone conversation.
In addition, TransUnion’s consumer survey provided insights on how and why consumers want to engage with their insurers. Responses differed by generation. For example, Baby Boomers indicated they prefer not to hear from their insurer unless they reach out first, while Gen X is interested in upcoming weather events impacting their area. Millennials are looking for auto and home safety tips and maintenance reminders or evolving coverage needs, while Gen Z is looking for data about how they are driving through telematics.
“We’re seeing that consumers have come to expect quite a lot from their insurance carriers beyond the basic coverage for damages and losses,” said Michelle Jackson, senior director of TransUnion’s personal property and casualty insurance business. “Increasingly, people want them to serve as trusted advisors and partners who can help avoid losses in the first place.”
Among other generational differences were changes to migration patterns. Predictably, Gen Z and Millennials are currently moving at higher rates than members of Gen X and Baby Boomers. However, comparing the migration behaviors of Millennials with those of Gen Xers when they were the same age, revealed significant differences. Specifically, nearly 4% of Millennials aged 25-40 are moving out of state, whereas only 1% of Gen X did so at the same age.
This trend was driven partially by people leaving large cities during the pandemic but also, more broadly, by a desire for a more affordable cost of living. Regardless of the reasons, this has implications for insurers who may be at risk losing customers who move out of state. Conversely, it may also present challenges to consumers, as many of them are moving to southern regions that are more prone to severe weather, making it difficult to attain new policies that offer sufficient coverage at an affordable price.
“While more Gen Zers and Millennials might move out of state, they are also actively seeking counsel about these kinds of decisions,” said Jackson. “Insurance providers can leverage data to identify those most likely to leave and offer guidance about some of the unexpected impacts of those changes. Those who view themselves as less of a commodity and more of a consultant will be better positioned to win and retain business.”
For more on these insights and highlights from the TransUnion Insurance Summit click here.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.