Keeping up with Millennials: How insurers can do good for society & business
An overview by SafeButler of Millennials, social good and why insurance companies should be paying attention
Fact: insurance is super old. While the foundations of the insurance industry were developed in 17th century London, the basic concepts of risk mitigation and distribution have existed since ancient times.
But has this ancient practice kept up with the times? In today’s world, Millennials constitute an important market, holding $2.5 trillion in buying power, but insurance increasingly fails to register on their radar. In this article, SafeButler, a startup that helps consumers compare renters and life insurance, analyzes the impact of Millennials and their values on the insurance industry.
Millennials highly value social good and invest in brands that do the same. According to a study conducted by Cone Communications in 2015, more than nine out of 10 Millennials say they would switch to brands associated with a cause.
In alignment with this value, upholding corporate social responsibility is a growing priority for many insurance companies. A recent survey of 22 companies by McKinsey shows that insurance companies are beginning to place a greater emphasis on measuring the impact of their philanthropic efforts; the percentage of companies using key performance indicators to evaluate the efficacy of their charitable work increased from 26% in 2014 to 41% in 2019.
Here are a few of the ways that insurance companies have tried to meet a higher standard:
Chubb contributes to its people and local communities. Each of its regional offices supports local charities, and the company encourages its employees to volunteer for local causes, such as substance abuse rehabilitation and food banks. Chubb has also provided $10 million in pandemic relief aid.
HUB has a company-wide program, HUB GIVES, dedicated to promoting employee volunteerism. Regional offices choose local organizations to work with and raise money for.
The startup rolled out its Lemonade Giveback program, to turn insurance from a “necessary evil into a social good.” When shoppers purchase a policy from Lemonade, they get to select a nonprofit to benefit. Once a year, the company calculates the unclaimed money from all of the policyholders who chose the same organization and donates up to 40% of these funds to these causes. In 2020, Lemonade donated $1,128,109 to charities through its Giveback program.
- Liberty Mutual
Liberty Mutual focuses on local philanthropic work, contributing to multiple causes, from homeless aid to promoting academic opportunities in underserved communities. The insurance giant donated more than $45 million to charitable causes in 2019.
In an effort to aid pandemic relief, Nationwide donated $5 million to local and national nonprofits for medical aid. They also provided $2 million in grants for communities in which Nationwide operates.
Although there is always more work to be done, insurance companies, especially newer and modernized ones, are increasingly putting emphasis on social good, a shared value with Millennials.
Unfortunately, the modern image of the insurance industry is not charitable and warm — it’s heartless and greedy. Although there are a myriad of reasons why insurance isn’t as important to younger generations, such as financial deprioritization of it in an economically unstable world, this negative reputation is most likely an influential factor.
As consumers, Millennials want to interact with companies that have a strong purpose outside of just making money. They want their money to go toward worthwhile causes and belief-driven initiatives, not just into the pockets of executives — and they’re willing to pay more for it, too. Data from SafeButler found that 62% of customers aged 18-25 did not buy the cheapest policies. Rather, they chose companies that were well-doing, had strong brand recognition or offered additional benefits, such as great customer service.
Giving back has always been important, but especially with the boom of the digital world, social causes are taking the forefront as this generation’s top priority — as they should. Any industry that wishes to stay relevant to the Millennial audience must show that they, too, share this value. That means taking measures to actively contribute to these causes, be it monetary donations or workplace diversity and inclusion. Insurance companies must walk the walk when it comes to protecting not just their customers, but the world around them.
SafeButler is a free service on a mission to help consumers effortlessly compare insurance. It uses AI and automation to simplify the shopping process and provide the best insurance choices for consumers, saving time and money.
In addition to delivering instant life and renters insurance quotes from top insurance companies, SafeButler offers connections for auto and homeowner insurance.
For more information, visit safebutler.com.