Millennials are starting families and buying homes. Boomers are passing antiques and art down to their Gen X and Millennial heirs. Simply put, generational change is upon us.
As Millennials become established adults, as Gen Xers get older, as Boomers enter retirement and approach end of life, things are bound to get interesting. These demographic changes, combined with national economic trends, are reshaping generational roles and affecting insurance in some noteworthy ways.
Let's find out how.
Rent or buy? For Millennials, it's "rent"
As Millennials settle into their late twenties and early thirties, they're growing more secure in their careers and (at last) beginning to buy homes. "Millennials are forming new households, moving to the suburbs, buying furnishings and SUVs," said Barry Ritholtz at Bloomberg.
They're also starting families. In 2014, Gallup found that more than half of 34-year-old Millennials were married, of whom over four in five had kids. As for thirty-somethings who'd never been married, a significant number (46 percent) of them had kids as well.
But more Millennials are starting this chapter of their lives as renters than as homeowners. They "contributed $514 billion to the housing market over the past year and became the largest group of U.S. homebuyers," said CNBC, but "they lag behind where previous generations were at their age."
In fact, there's a significant percentage of Millennial renters who will probably just keep renting from here on out, according to Brian Sullivan's "Property Insurance Report."
The rise in rentals spans generations
Over the course of one decade, the number of American households in rental homes rose from 34.6 million (in 2006) to 43.3 million (in 2016). Homeownership, meanwhile, declined slightly over the same period, from 76.1 million to 75 million.
In an economic climate where even the older, more established Gen Xers and Boomers have been forced or enticed to rent instead of buy, Millennials are not bucking the trend. About two-thirds of Millennial heads of household (age 35 or younger) rent – and their number is climbing.
As a result, policy growth in home insurance is slow, while rental insurance is only growing more relevant for most Americans.
Antiques are changing hands
The rental trend is just one example of how demographic change is affecting the industry. Antiques are another.
As Boomers' estate plans are carried out, the art and antiques that they own change hands, passed down to their Gen X and Millennial heirs. This change in ownership brings with it a certain amount of industry flux. Items are damaged in transition; flaws that have gone unnoticed for decades are noticed and addressed. The new owners may have different generational attitudes toward the treasures they inherit, prompting different behaviors.
We're not sure at this point how these needs and attitudes will affect markets, valuations, and policies, but we can expect change in one form or another.
Are you ready for the unknown?
On one hand, we can be certain that change is on its way. On the other, we're uncertain of what exactly that change will look like. That's okay. What's important is to be ready to respond with agility. Is your policy administration system capable of rapid response? If not, there's no time like the present to prepare for the future. Request a Silvervine Software demo.
The FedNat Insured Web is a great tool for our insureds!
They like having a centralized location to view policy info, make payments, upload policy documents, and elect to become paperless to receive a discount.
The insureds also can file a First Notice of Loss for a claim and access exiting claim info. Silvervine recently enhanced the site which allows insureds to upload policy documents directly to their policy. The uploaded docs go directly into our workflows and save a lot of manual effort on our part.
Policy Scan:
From my visits with agents, the agents appreciate the app for the amount of time saved on having to download and attach photos directly to the policy.
The app can also reduce the amount of staff required for a busy office to fulfill underwriting requests for photos.
When training agents they are amazed at how quickly the photos attach directly to the policy. After taking photos using the app and before they make it back to their desk, the photo is already attached to the policy. They also like the ability to attach additional photos for pre-existing damage.
E-messaging:
Customer Service is seeing an improvement with retention as the text message definitely triggers phone calls from insureds to make payments.
The insureds love the fact that we notify them on their phones because they state that sometimes they don’t receive their mail for various reasons.
The insureds are paying more attention to the texts then to their actual mail. We try to set all of our customers up on that option if we notice that they are not currently enrolled, as it builds great customer relations as well as retention.
Policy Scan:
As a company we have adopted the use of Policy Scan for all our policies, and our agents have adopted the use of the app as well.
Not only is it easy to use, there is also no more worrying about losing photos, having to store photos or photos being attached to the wrong policy.
With Policy Scan we have increased efficiency in our workflow and reduced our exposure on the risk.
Silvervine’s core administration solutions easily handles multiple carriers within multiple states, including accounting, payment processing, immediate policy issuance and endorsements.
What started out writing one product, one line in one state has now grown into mulitple products, multiple lines and writing in multiple states. We have over $95 million in annualized premium in-force and we expect to grow by 20% during the next year all serviced by Silvervine.
Silvervine was our insurance software system of choice when we started the company in 2006. Silvervine enabled us to begin business within a few months of licensing the company. Today, we are one of the top 20 homeowner’s writers in Texas and SIlvervine’s solutions have been an integral part of our success.
