As a financial institution, offering the right insurance products has a chance to impact ROI in more ways than one. Whether it’s attracting new people, retaining consumers who are looking for more value, or building loyalty with those who have been with you the longest, providing a thoughtful suite of insurance products shows consumers you have their best interest at heart.
Success starts with the right mix of insurance products
Finding the right mix of insurance products means choosing products that address generational needs, appeal to different life stages, and cater to individuals using data-driven personalization. Essentially, your customers’ and members’ needs should be your North Star for selecting insurance products.
The right product mix can be molded to fit growing and changing consumer demands at large
Consumer views and desires have continued to change in the wake of the COVID-19 pandemic, and this has led to a greater demand for insurance across the board. In fact, nearly half of Gen Z and Millennials as well as 40% of Gen X and Boomers feel that insurance has become more important following the pandemic.
More specifically, demand for usage- and behavior-based insurance products has continued to rise after initial spikes in 2020, including cyber insurance, pay-as-you-go auto insurance, and pet insurance.
For example, 59% of respondents from Accenture’s 2023 Global Insurance Consumer Study say they are interested in cybersecurity insurance tied to virus protection software.
The key here is offering products that respond to changing consumer behavior and needs. This not only refers to choosing the right products but also administering them in a way that gives consumers additional value through flexibility.
The right products can address different generational needs and life stages
Another key factor in choosing the right insurance products is generational differences. Analyzing your data can help reveal what’s most important to your primary audiences then guide your insurance offerings around those findings.
Demographic, psychographic, behavioral, and even geographic data all factor into this equation. This information helps determines buyer propensity for a given age group so you can focus on products that are most likely to be purchased.
Millennials and Gen Z
Preserving income and protecting financial security are a top priority for younger generations. According to the SOA Research Institute, between 60% and 80% of younger consumers are somewhat or very concerned about the financial impact of insurable risks. These younger, working-age adults are most concerned with accidents, with research showing that a staggering 86% of employees see a growing need for supplemental coverage, such as accident insurance.
Gen Z also values mental health benefits more than their older counterparts, with this group viewing it as more important than all others. Interestingly, each successive generation values it slightly less than the one before it.
Generation X
Gen X consumers are firmly in their peak earning years and tend to have family responsibilities, including caregiving for older family members. They are most concerned with protecting income and accumulated wealth to cover family expenses should they become unable to work. This includes products like critical illness, disability, life, and long-term care insurance.
Elder care, especially, is becoming more prevalent as time goes on. In fact, the number of people providing care in addition to working outside the household in the U.S. has increased from 1 in 7 in 2020 to 1 in 5 in 2023. The average time devoted to caregiving per week has also nearly tripled in that same timeframe.
Ultimately, offering products that ease the burden on this generation of workers allows them to reserve time and money for other aspects of life.
Baby Boomers
For Baby Boomers that are in the retirement age range, supplemental insurance that enhances Medicare coverage are the most important products to consider. From 2021 to 2023, there was an 8% drop in the share of large employers (200 or more employees) that offer health benefits to their retirees (from 29% to 21%).
This declining share of employer health coverage for retirees will continue downward, and it paves the way for financial institutions to offer insurance products that fill in the gaps for these consumers. Additionally, the overall rise in cost associated with employer-sponsored healthcare has put increasing pressure on organizations to make tradeoffs between offering coverage for retirees and maintaining benefits for their current workforce.
The right products can be personalized to appeal to customers and members on an individual level
It’s no secret that personalization is important, but how can it be applied to insurance? For starters, customer data is and always will be the ultimate driver of fostering loyalty to create ecstatic fans.
Data allows you to observe and understand the trends of demographic groups. It also gives you a view into individual behavior—website behavior, actions taken, products browsed, etc.—and it even helps determine the propensity of an individual buyer to make a purchase.
More specifically, first-party data—that is, data collected by you through customer behavior—is the most valuable customer data out there. The kicker? More consumers are more willing than ever to share data if it helps them.
From big picture to microscope: Choosing the most effective product offerings means addressing consumer needs at all levels
Data opens up new opportunities for financial institutions to delight their customers or members.
The key is applying the data you have—from societal and generational trends all the way down to individual behavior—to thoughtfully arrange your insurance products in a way that guides your customers on their path to achieving financial well-being.
If you need help making sense of your customer data and insurance product mix, Franklin Madison has your back. With over half a century of insurance experience and a wealth of consumer data collected over the decades, you can be sure that a partnership with us will lead to smarter marketing and happier customers.
Excited to learn more? Reach out to us today to get the conversation started.