While millennials earlier avoided health insurance plans, COVID-19 has opened a window of opportunity for insurers
The early bird grabs the worm - this rephrased saying applies to financial planning decisions too. Yet, when it comes to insurance, especially health plans, millennials remained reluctant to invest their moolah in the same. Not anymore; the COVID-19 pandemic has changed everyone’s perceptions almost overnight.
Millennials, particularly those having dependents like kids, parents, and others, are appreciating the role of health insurance in providing financial assistance during medical exigencies such as the coronavirus threat. To cover the risk of a breadwinner succumbing suddenly to the virus, comprehensive health coverage plans play a crucial role.
However, that is only one part of the issue. The other is the gap between millennial mind-sets and that of insurance firms. Millennials are always on the run and thus primarily they are digital natives as it empowers them to access anything anywhere at no time. They prefer plain plan descriptions that are easy to understand rather than complex terms of insurance plans. Insurance players must plug this gap in attracting millennials because they can stay tuned for life if converted early. Moreover, their constant connectivity and 24x7 access to information mean millennials are always checking for the best options. So easy-to-understand plans stand a better chance of customer conversion.
Another aspect about the young generation is they dig, eat well, believe in exercising regularly, and enjoy themselves after a hard day’s grind. But their plans have gone haywire due to COVID-19, making these peeps realise that long lives cannot be taken for granted today.
The other gap of concern is the lack of awareness and information. An array of health plans, including ones covering the novel coronavirus, can leave millennials confused about what to choose. Indecision then benefits no one – the insurer or the individual. Here again, clarity in plans and proper info on their advantages can speed up purchase decisions.
More often than not, though, millennials will avoid interacting with insurance salespeople in person. Instead, they are happier going online and checking out plans by themselves. In many cases, a trust deficit regarding agents can act as a barrier. For them, online insurance purchase from the comfort of residential dens is kosher. Insurers should comprehend the thinking of millennials in this context. For that, a sound knowledge of millennials in India is required.
At 42.6 crore, millennials account for 34 per cent of India’s population. With more getting employed every year, they have emerged as the country’s largest wage-earning section accounting for around 47 per cent of India’s total working peeps. Like it or not, the youth do not think traditional. For them, spending, not saving, can be the main drivers. In the age of Uber, Ola, and OYO, owning cars and homes is no higher on their to-do list. Their simple funda: Why buy when we can hire! This makes them more gung-ho about hi-tech gizmos, fitness, fine-dining, and travel.
Given their psyche, insurers should push the digital mode in converting these young consumers. Unlike other generations who purchase insurance in person, millennials remain twice as inclined in buying online. The beauty of digital lies in the ability to compare diverse offerings from different insurers and then buying in a jiffy.
Besides, bespoke health insurance plans catering to particular preferences and covering their unique lifestyles risks should be offered. These could insure risks related to fitness, national or international travel, and lifestyle conditions. Insurance players lacking such products can put them off as innovation is the name of the game in wooing millennials. While doing this, competitively-priced policies should be part of the game-plan as well.
Once this becomes clear, engaging and converting millennials online is the next hurdle. The secret sauce here – soft-targeting and simplicity in winning their trust. If insurers manage to crack this code, greater insurance penetration in the millennial segment is assured.
Hackneyed offline offerings remain a no-no for youngsters. Even so, digital products must be backed by adequate advice and clarity. This can be driven by FAQs plus chatbots and other virtual assistants. As for millennials, they can manage the maze of offerings and service providers by opting for entities that provide swift, safe, and secure online plans customised to suit personal needs.
Meanwhile, if health insurance providers can manage to swing such offerings, they could watch their millennial customer base grow year over year.
The author is Founder and Managing Director – BimaKaro.in