A recent J.D. Power study showed this generation is most inclined to split their coverage across multiple insurers.
Generation Y has now become the largest home buyer consumer segment in the country, and it is also the most likely to unbundle (also known as splitting) their coverage needs instead of choosing only one insurance company for all of their policies.
They are splitting their insurance policies at a greater rate than any other generational group.
For an insurance company, this actually provides quite the opportunity. The J.D. Power 2015 U.S. Household Insurance Study provided this insight after examining customer satisfaction with two specific lines of coverage: renters and homeowners. There were five different factors that were taken into consideration in order to gauge a customer’s satisfaction with his or her insurer. These were: policy offerings, price, billing and payment, interaction, and claims. The research used a 1,000 point scale in order to measure satisfaction levels.
The study showed that in order to draw Gen Y customers, an insurance company must cover complex needs.
This generation is considered to be an exceptionally valuable one, but as they mature, their coverage needs are developing in complexity. Insurers have the opportunity to be able to cross-sell additional types of insurance policy, but at the moment, they are not necessarily managing to convince people from that demographic.
The report from J.D. Power showed that only 65 percent of all homeowners insurance customers in Gen Y are bundling their multiple forms of coverage policy with the insurer covering their homes. Comparatively, the average across all generations is considerably higher, at 78 percent. Moreover, that rate is not only lower, but it is also falling among Gen Y customers. Since 2013, it fell a considerable 5 percent. During the same time, bundle rates among other generations have stayed steady.
The research also pointed out that there is a notable relationship between the satisfaction a customer receives from an insurance company and the likelihood that the individual will purchase multiple forms of policy from that insurer. This makes sense, as Gen Y customers are less likely to be satisfied with the company providing their homeowners insurance than other generations.