LAS VEGAS — May 13, 2008 — As the estimated 80 million people nationwide born between 1981 and 20001 enter the work force and become active consumers, technology will play a critical role for insurance firms recruiting those in the so-called “millennial generation” as potential employees and customers, according to a new survey released today by Insurity and Microsoft Corp. at the ACORD LOMA Insurance Systems Forum 2008.
The Insurity-Microsoft “Millennials in Insurance Survey 2008,” conducted by Washington, D.C.-based KRC Research, found that not only do millennials want to use newer, more innovative technologies in the workplace — such as company portals similar to social networking sites, instant messaging and virtual meetings — they also have heightened expectations as to how insurance companies should interact with them as consumers, such as the ability to view their full accounts online, access Web-based support and send instant messages directly to agents.
“This is an industry still struggling with ‘green screens’ on desks, legacy mainframes in the back office and an employee population rapidly approaching retirement age,” said Bill Hartnett, director of U.S. Insurance Industry Solutions at Microsoft. “Insurance companies face serious challenges in attracting millennials into their work forces and interacting with them as consumers. We believe technology can play a constructive role in addressing these issues.”
Millennials as Insurance Workers
As expected, millennials queried in the Insurity-Microsoft “Millennials in Insurance Survey 2008” reported using a wide variety of technology tools in their day-to-day lives, including social networking sites (77 percent), instant messaging (71 percent) and wikis (59 percent). Half subscribed to more than one social networking site, 64 percent frequented them daily and 17 percent reported spending 30 minutes to an hour each visit.
“Millennials have been marinated in digital technology almost since birth,” said Rob Salkowitz, workplace expert and author of “Generation Blend.” “When they come to work, their expectations are shaped by their experiences as students and consumers, and access to social computing technology is a big part of that. Employers should factor in those expectations when trying to recruit, retain and motivate young workers.”
Because of this proclivity to use technology in their personal lives, millennials surveyed had expectations of their employers providing similar technologies for their use in the workplace. These included company-provided PCs (76 percent), mobile phones or smartphones (48 percent), internal company instant messaging (50 percent), access to social networking sites (40 percent), company intranet or portal (62 percent), and company-provided virtual meetings (42 percent).
More important, technology appears to be a recruitment driver for the insurance industry, which faces a shortage of new workers; 60 percent of its current employees are older than age 45.1 In fact, 91 percent of millennials stated that being able to work with “newer, innovative technologies” in the workplace would make them more likely to consider a potential job opportunity. Other drivers included the ability to telecommute or work from home (77 percent); flexible work schedules and locations (91 percent); and opportunities to work on collaborative team projects (72 percent).
However, a clear hurdle for recruiting younger workers into the insurance industry is the perception of the industry itself among millennials, the survey found. Seventy-one percent of millennials want to “work with people their own age,” yet large percentages of respondents stated that they perceive the industry as having “older workers” (58 percent), being “old in general” (63 percent), being “not innovative” (53 percent) and having a “poor public image” (65 percent).
“Insurers already face a shortage of qualified staff, and the gap that retiring baby boomers will create could be crippling,” said Karen Pauli, senior analyst covering the insurance industry at TowerGroup. “As part of a comprehensive strategy to leverage technology for competitive advantage, carriers and agents need to adopt collaboration and business intelligence technologies today that will multiply the impact that their existing staff can have. They also need to look toward the consumer experience and adopt technologies that will attract and be familiar to the newer generation of workers and customers, such as social networking sites, instant messaging and mobility.”
Millennials as Customers
While the insurance industry faces a challenge recruiting millennials to replace retirees, a bigger issue might be recruiting them as customers. Of those queried in the Insurity-Microsoft “Millennials in Insurance Survey 2008,” many currently own car insurance (55 percent) and health insurance (41 percent). However, as more millennials enter the work force and purchase other insurance offerings, companies will need to adjust to better communicate and connect with younger consumers.
The majority of millennials currently interact with their insurance companies via phone or call centers (55 percent) versus the Web (8 percent). However, when asked about their preferred methods of interaction, millennials are less likely to choose phone or call centers (35 percent, down 20 percentage points) and more likely to gravitate toward the Web (13 percent, up 5 percentage points). In fact, when asked what technologies companies should adopt to better serve customers, a large percentage of millennials ranked the following as “important”:
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Personal Web portals with full view of their accounts (86 percent)
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Web-based support (89 percent)
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Automated phone responses (69 percent)
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Live online chats with agents (76 percent)
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Instant messaging with agents (67 percent)
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Company blog to post concerns and questions (69 percent)
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Mobile alerts (59 percent)
Another consideration for insurance companies centers on brand reputation and customer feedback in chat rooms. A combined 48 percent of millennials would “frequently” or “occasionally” blog in chat rooms or social networking sites if they encountered a poor customer experience with their carriers.
“In our experience delivering solutions to the insurance industry, we’re seeing carriers starting to put consumers at the center of their experience, using technology and tools to provide more transparency, control and functionality in their products and associated processes,” said Bill Dochterman, vice president, marketing at Hartford, Conn.-based Insurity, a ChoicePoint Asset Company. “This is in part driven by overall market dynamics, but also very much a reflection of this new wave of millennial workers and consumers.”
About the Insurity-Microsoft “Millennials in Insurance Survey 2008”
Washington, D.C.-based KRC Research conducted the Insurity-Microsoft “Millennials in Insurance Survey 2008” from April 21 to 27, and garnered responses from more than 700 young adults in the United States and Canada born between 1980 and 1990. To download the full survey results and a white paper with more information on how technology and other key market trends will impact the insurance workplace of the future, readers can visit http://www.microsoft.com/industry/financialservices/insurance/acord.mspx.
About Microsoft in Financial Services
Microsoft’s Financial Services Group provides software that helps financial firms transform the customer, employee and operations experience so they can maximize opportunities for increased market share and profitability. Microsoft software helps empower people and IT staff within financial firms — and across key focus areas such as advisor platforms, channel renewal, insurance value chain, enterprise risk management and compliance, and payments. Through a combination of Microsoft- and partner-provided solutions, customers enable their employees to turn data into insight, transform ideas into action and turn change into opportunity. More information about Microsoft’s Financial Services Group can be found at http://www.microsoft.com/financialservices.
About Microsoft
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
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