Insurance Payments for Millennials
Millennials are now our generation of insurance buyers. These tech-savvy adults want to be able to sign up for their policies online and manage them digitally, completely on the go. Here’s what payment options they’re looking for in an insurer and how you can make your products attractive to this customer base.
Say what you will about millennials, but they make up a significant part of the Australian consumer market. There are currently 6.4 million millennials with an annual disposable income of $530 million.
This generation born between 1981 and 1996 sees the world through a different lens. According to research from Deloitte, they value experiences above all else and tend to be very sceptical of most businesses’ motives.
As the first generation of digital natives, millennials are used to everything happening with the touch of a button. So insurance companies hoping to acquire and retain these younger customers will have to think outside of the box.
Here are the types of insurance and premium payment options millennials are looking for and how insurance providers can engage this younger generation.
WHAT MILLENNIALS EXPECT FROM INSURANCE COMPANIES
Unlike many older customers, the prospect of purchasing insurance through an agent and receiving paper statements does not appeal to millennials. Instead, they want to be able to sign up online and manage the entire service digitally.
This means that insurance companies must offer innovative technology, instant payment features and a seamless mobile experience. If you’re hoping to expand your millennial customer base, the first place to start is learning what they want.
Here are five things millennials are looking for in an insurance provider.
1. Multiple payment options
Because millennials grew up with such rapid advancements in technology, they are more likely to use alternative payment methods than older generations. So if you want to attract millennial customers, offering multiple payment options is vital.
That’s because multiple payment options make the buying experience easier and more convenient. Here are some of the leading payment options you should offer:
- Credit and debit card payments
- Digital wallet integration
- PayPal payments (32% of millennials prefer to make payments with PayPal)
2. Autopay and recurring billing options
Most customers prefer to pay monthly, and millennials are no exception. In addition, monthly payments can make insurance more affordable and are an excellent option for customers that are tight on funds. Autopay and recurring billing make this more convenient for younger consumers who like to ‘set and forget’. So they don’t have to worry about late payments or a lapse in coverage. According to Fiserv, millennials are five times as likely to set up automatic payment through their mobile phones.
3. Automated reminders for bill payments
While payment automation is great, not everyone likes having payments automatically taken out of their account and some prefer to pay online when the bill is due. Insurance is a product that’s heavily based on trust, so sending out automated payment reminders before deducting premiums, or reminding customers of the due date, are a great way to keep your customers updated.
Automated bill payment reminders are also an effective way to help your customers avoid late fees or coverage lapses. To create a smooth billing and payment experience for your customers, make sure you engage a payments company who can partner with business management software providers for the required third-party integrations.
4. Real-time payments
When it comes to critical products like insurance, lag times in payments – especially when it comes to claims and settlement – can be a stressful experience for customers. When customers find themselves in the middle of a natural disaster or accident, getting instant access to their insurance payouts becomes paramount. That also explains why casualty and property insurance fund disbursements are among the fastest growing channels for real-time payments, according to PaymentsJournal.
Millennials greatly value transparency in their business relationships, and real-time payments help them gain full visibility on their payouts.
For you as a business, real-time payments also mean you don’t have to wait to receive consumer-to-business payments. This can give you better financial control and a clearer view of your continuous real-time cash position.
INSURANCE PAYMENT & ENGAGEMENT CHANNELS FOR MILLENNIALS
Making payments through their phones is the norm for millennial customers. According to one survey, 70% of millennials prefer to use mobile phones to pay for goods and services. With that in mind, here are some of the best payment and engagement channels to offer:
- Mobile wallets: These are virtual wallets that store payment information on a mobile device. According to research done by Fiserv, millennials are 2.6 times as likely to make payments using mobile wallets.
- Credit and debit cards: These card types continue to be increasingly popular methods of payment. This is largely thanks to the variety of contactless cards available. Standard card providers to partner with include Visa, Mastercard, American Express and Discover.
- Chatbots and customer representatives: Younger customers are more open to using self-service options and like to get answers instantly rather than wait on the phone for the customer service team. This makes communication channels like chatbots perfect for millennials. Some use cases of chatbots for your insurance company are: access account information, make online payments, lodge claims, policy renewal or buying extra coverage.
- Interactive voice response: With interactive voice response (IVR), your customers can call you, enter their bank account details using their mobile keypad, and have their transaction processed instantly. IVR is faster that traditional phone support but also more secure as it’s automated. For insurance companies wanting an option that sits in between chatbots and human telephone interactions, IVR is an ideal option.
This article has been republished with permission from Bambora.
If you enjoyed reading this article and would like to be notified when future articles are posted, please sign up for our email newsletter.
Are you interested in reading articles on a particular payments topic, company, payments industry executive or author? Click the search icon, it’s that magnifying glass on the top right-hand side of the website, and type in the keywords that interest you. You will then be presented with a list of any articles that match your search criteria.
If you’re trying to reach more millennial customers, it’s essential to embrace a full suite of payment technologies and mobile options. But as human interaction with customers slowly takes a back seat, you need payment options that can be personalised to keep customer trust and security uncompromised.
This is exactly what Bambora offers with their secure payments options for insurance providers. Their payments platform can enable you to set up recurring payment options, utilise batch processing, and validate transactions to reduce fraud. Plus, they tokenise sensitive customer data, so customer information always remains secure. Know more about Bambora to learn how they can help with online and mobile payments options.