In its report on the millennial impact on business in Canada, KPMG revealed that CEOs are concerned about how the cohort will shape their activity
Like many others, KPMG believes a radically new approach is needed to target millennials with insurance (Credit: PixaBay)
Accountancy and consulting giant KPMG has found 86% of insurance CEOs are concerned about the impact of the millennial generation on business, and how it’ll shape their ongoing strategy.
The figure was reported in a paper released today on the Canadian insurance market and the opportunities open to appeal to generation Y — the cohort born between 1981 and 2000 generally known as millenials — but included statistics on a global level.
KPMG’s assessment of Canada’s insurance market fits the mould seen elsewhere of an industry struggling to understand what drives younger customers to purchase cover, suggesting that the solution lies in harnessing technology around big data.
KPMG partner and national insurance sector leader Chris Cornell said: “The insurance industry will look radically different in 10 years from how it does today.
“Forging a new path won’t be easy; insurers must digitise their operations, products, and processes, and use data-driven insights to address this seismic shift in customer dynamics — the one-size-fits-all approach won’t work anymore.”
The reason behind concerns of CEOs, according to the consultancy, is that millennials aren’t following the same norms as their Gen X and Boomer peers in their lives, such as buying a property and having children — events that usually trigger the purchase of insurance.
CEOs know that better-understanding customers can shape the millennial impact on their business
In its survey of 132 CEOs from insurance companies in the US, Europe, and Asia — with revenues from $500m to more than $10bn — KPMG found 64% felt a need to significantly improve understanding of their customers.
Big data, Cornell believes, can help coverage providers to understand the areas of life younger generations need insurance for as a protective measure rather than trying to sell them the same coverage older generations bought.
He added: “Big data can open up new horizons for insurers. But, they must put into place much stronger data collection and analysis tools.
“This requires a total rethink of how to collect, store, analyse, and use data, not to mention how to ensure that it’s kept safe and secure.”
How to shape the millennial impact on business in Canada
The wider scope of KPMG’s report — a drill down on the millennial market opportunity in Canada — referenced findings from previous research that found 84% of Canadian millennials don’t trust traditional advertising.
It read: “Unfortunately for insurance companies in Canada, customer dynamics are evolving and are radically different today than they were in the past.
“Old ways of defining and targeting customers are not going to work very well in the days ahead. This is why Canadian insurance companies are acting now to understand who their customers are and what they want.
Along with the advantage of harnessing big data, KPMG recommended Canadian insurers offer flexible and short-term products and complement their coverage with additional services.
Alongside these prescriptions to better capture millennials, KPMG included a range of views expressed by students working on insurance industry projects at The Knowledge Society — a group that encourages younger people to contribute to innovative ideas.
Among the responses were simplifying communication between insurers and the younger market, making comparisons millennials can relate to — like how many cups of coffee equal monthly premium — and aligning investment activity to mitigate climate change.