Insurance & Millennials: A Coming Of Age
Millennials have been labeled lazy, entitled, and narcissistic; But as they age into later adulthood and eclipse Baby Boomers as the largest living generation, it’s time we ask: do these labels hold true?Excerpts from a new report form Cake & Arrow that reveals emerging trends and helps better identify the next big generation. Read the entire report here.
By 2019, Millennials will number 73 million, and will have taken over Baby Boomers as America’s largest living generation. Meanwhile, in 2016 Millennials became the largest generation in the U.S. Labor Force and will soon surpass Baby Boomers as comprising the majority of the U.S. electorate (Fry, 2018). In short, Millennials are about to take over the world. Yet, even as Millennials surpass Boomers in their sheer numbers (not to mention contributions to the economy), they continue to be treated by many industries and institutions as a niche market, whose values, beliefs and behaviors are at best inscrutable and at worst despicable. And like any other generation, they have been vulnerable to stereotyping and even derision.
In 2013, Time featured a story about Millennials on the cover of their iconic magazine, entitled “Millennials: The Me Me Me Generation” (Stein, 2013), thus inscribing the perception of Millennials as “lazy, entitled, narcissists who still live with their parents” into the annals of history. It’s a perception that has solidified over time, perhaps leading Tim Gurner, a 35-year-old Australian multi-millionaire, to famously blame low home ownership amongst his Millennial peers on their penchant for avocado toast (Horowitz, In recent years, however, the stereotype of the lazy, entitled Millennial who prefers avocado toast to property ownership has been challenged, notably by a Millennial himself, Malcolm Harris, who, late in 2017 published his book Kids These Days: Human Capital and the Making of Millennials. In it, he scrupulously employs data to show how, far from lazy and entitled, Millennials are in fact the most productive and educated generation in recent history, and, despite their expensive educations and unprecedented capacity for productivity, also work more hours for lower pay than their Baby Boomer parents and are saddled with exorbitant amounts of student debt–which, as our research
confirms, they were obligated to take on if they wanted to have a fighting chance in today’s economy (Harris, 2017).
Furthermore, while recent data and analysis suggest that Millennials are perhaps neither as lazy or as entitled as once assumed, it’s also true that Millennials are not all the same. Numbering around 73 million, Millennials are not only the largest living generation, but they are also the most diverse generation in history (Frey, 2018), and in recent years their numbers have continued to swell as more and more Millennial-aged immigrants move into the country (Frey, 2018). Finally, what exactly constitutes a Millennial is not at all agreed upon.
So, What is A Millennial?
Earlier this year, the Pew Research Center published new research on Millennials. Their research defines Millennials as those born between the years of 1981- 1996, which is the range we have adopted for our research. While identifying a clear beginning and end point is important for the purposes of research, such hard lines are artificial; more important in understanding Millennials are the historical events and cultural shifts which have shaped them growing up and into adulthood.
Pew Research identifies a number of factors they consider to be the defining events and cultural shifts that have shaped Millennials:
Millennials remember the 9/11 terrorist attacks
The youngest being five and the oldest being 20 when the Twin Towers were attacked, most Millennials were old enough to remember 9/11, and many were able to see and understand its historical significance. The terrorist attacks had a enormous impact on American foreign policy and shaped the political world in which Millennials came of age. From the wars in Iraq and Afghanistan, which contributed to the polarization of American politics, so profound today, to the eventual 2008 election of Barack Obama, the first African American president, the political world Millennials inherited and became a part of looks very different than that of previous generations (Dimock, 2018).
Millennials came of age during the 2008 recession
Among the labels of lazy, entitled, and narcissistic, Millennials are also frequently derided as immature, thanks in part to their tendency to delay what previous generations consider to be the hallmarks of adulthood. Millennials are less likely (and able) to buy homes, more likely to live with their parents into young adulthood, and are delaying marriage and children into their late twenties and thirties. This trend is at least in part due to the great recession, which occurred as Millennials were coming of age, either immediately before they graduated from college, or after. This accounts for their slow entrance into traditional adulthood. For those who graduated from college during or after the recession, the recession made landing the kind of career job that would make the more traditional things, like getting married and having children, much less feasible than it was for their parents. And for those who had not yet graduated from college when the recession began, it shifted expectations of what would happen after college, leading many to consider continuing their educations or moving back in with parents and families rather than starting their careers and families of their own. The recession facilitated this “slow start” and has fundamentally changed how Millennials behave in their twenties and thirties (Dimock, 2018).
Millennials came of age with the Internet
While Millennials are not typically considered “digital natives”– those born into the age of the iPhone and the Internet, they can be defined by their familiarity with digital technology. While it was the dawn of the television age that defined Boomers, and the rise of the home computer that shaped Gen Xers, for Millennials, it was the Internet–email, Google, and social media–which were introduced to most Millennials during adolescence. They are old enough to know a world without an iPhone–the youngest Millennials were entering middle school when the first iPhone came out while the oldest were already well out of college. For Millennials, the digital age isn’t something that always was, but rather something which they have, as a generation, profoundly influenced (Jiang, 2018).
These historical events and cultural shifts are what define the Millennial, not the precise years in which they were born, and provide us with the necessary context to move beyond a definition of Millennials based simply upon their moral qualities (i.e. lazy, entitled, etc.) and rather upon the beliefs, mindsets, and characteristics which make them unique from other generations. For example, we know that:
- Millennials are highly educated Raised by Baby Boomer parents, many of whom were able to go to college at a time when a college education was affordable, Millennials were told by their parents, teachers, and society at large that getting a good education and going to college would be key to their success and future happiness. And many of them listened. Millennials are the most highly educated generation in recent history, with approximately four out of 10 millennial workers now possessing a four-year college degree (Graf, 2017). And while the rising cost of a college education has raised the question of whether a college degree is worth the money, 2014 data shows that the economic disadvantages of not going to college continue to outweigh those of student debt (Pew Research Center, 2014).
- Millennials are more productive than any other generation Since 1973, worker productivity has gone up by nearly 74 percent, with a steep incline in productivity taking place between 2008-2010, making Millennials (contrary to popular belief) one of the most productive generations in living history. Meanwhile, 21 percent of Millennials say they work more than 1 job to make ends meet (Manpower Group, 2016), and 75 percent report working more than 40 hours a week. Coming of age alongside the Internet and the kind of technology that made 24/7 availability possible, Millennials are well equipped and well trained by their devices, software, and other gadgets for productivity In his book on Millennials, Harris writes: “The growth of growth requires lots of different kinds of hard work, and Millennials are built for it. While cell phones and PDAs (remember when Personal Digital Assistants existed as a separate device) used to be for business people who billed for their time in minutes, now the average teenager has the tools to stay plugged in 24/7, and the training to use their gadgets better than business people can. Social media schools young people in communication and the emotional skills–as well as quick thinking and constant availability–that make them exceptionally productive. … No one puts their whole self into a job like a Millennial who never learned to separate work and life enough to balance them …”
- Millennials are uniquely burdened with student debt Millennials, who, more than any other generation were expected to go to college, have also paid significantly more for it. Over the past thirty years, the cost of attending college has risen 220 percent (College Board, 2014). And, as the interest in college education rose throughout the recession, the cost of college went up to cover losses in state funding. By 2016, the average cost of college tuition nationally (in both private and public universities) had jumped 28 percent since the recession hit in 2008, with some states hit harder, like Arizona, where tuition rose 72 percent over seven years. So while Millennials may be more educated than previous generations, they have paid dearly for it, and are likely continue to do so. Millennials make less money than previous generations and are more likely to live in poverty
- Even while Millennials are more productive and more educated than previous generations, they also earn less money. As productivity has increased by 74 percent and the cost of going to college by 220 percent over previous decades, hourly wages have risen by only 12.5 percent since 1973. This has made Millennials one of the poorest generations living today, with more U.S. households headed by a Millennial in poverty than any other generation and more single Millennial mothers living below the poverty line (Pew, 2017).
- Millennials wait longer to have children The fact that Millennials came of age during the recession, that they are more likely to go to college and more likely than any generation to be burdened with student debt combined with the changing roles of women in society and even the role the Internet is said to have been played in sexual behavior are all contributing factors to why Millennials wait longer and longer to have children. Although Millennial women account for 82 percent of mothers in the U.S., as of 2016, only 48 percent of Millennial women were mothers (compared with 57 percent of GenX women at the same age), and 2016 marks the first time that the data shows more women in their 30s having babies than women in their 20s (Livingston, 2018). 06. Millennials are the most diverse generation in American history Finally, Millennials are now known to be the most diverse adult generation in American history, with minorities making up 44 percent of Millennials. The generation which follows them will be even more diverse. Large waves of immigration to the U.S. in the 80s and 90s have lead to this increase in diversity, which will permanently change the ethnic and racial composition of America. A recent report by the Brookings Institute found that “the most consequential characteristic embodied by the members of this unique generation, as the country evolves demographically, is their racial and ethnic diversity” (Frey, 2018).
Insurance & Millennials
Even as industry after industry have fundamentally transformed to accommodate and adapt to Millennials and their changing mindsets, values, risks, and behaviors, the insurance industry and its behemoth (and in many ways archaic) infrastructure has remained rigid. Legacy technology has stalled innovation and an aging workforce that lacks in diversity continues to become more and more alienated from Milllennials, whom, in increasing numbers, are becoming their chief customer. INSURANCE & MILLENNIALS Like its infrastructure, both technological and human, the composition of insurance products remains rigid and structured along hard lines that are ceasing to exist for Millennials: business vs. personal, digital vs. physical, online vs. offline etc. The way that products are sold and marketed often does not align with how Millennials shop and research and is instead driven by assumptions, like the idea that Millennials want to do everything online or that Millennials are lazy and won’t do their research.
Attitudes in insurance toward Millennials and toward change in general are slowly shifting, but still pervasive within the industry is the perception that it’s not the industry that needs to change, but Millennials themselves. A study conducted by the website insurancequotes.com in 2015 revealed that Millennials are severely misinformed about insurance, finding that while the majority of Millennials rent, most do not have renters insurance, and are the group most likely to lack knowledge about renters insurance, with 29 percent believing renters insurance costs more than $1,000 a year (Johnson, 2015). The common industry response to such findings (and indeed the general tone of this particular study) has been to blame Millennials for their ignorance, relying on the old adages–that Millennials are naive, selfish, and irresponsible–rather than the industry’s own failures.
As an industry that will increasingly rely on Millennials to buy it’s products, it is on the industry to understand, empathize and find innovative ways connect with Millennials, not the other way around. If what the research shows is true, Millennials are not lazy, and they definitely aren’t stupid. It’s the insurance industry that has become opaque, complicated and disconnected from the people it exists to serve. The purpose of our research is neither to confirm nor negate common stereotypes of Millennials, but to provide a layer of complexity, nuance and humanity to how Millennials are perceived within the insurance industry. As a customer experience agency, all of our work is driven by real human insights–by what people tell us about how they feel, what they want and what they are worried about–and by what we can observe in their behavior. Millennials are people, too. And like any people, they can only be understood through a complex and interwoven set of values, priorities, and general characteristics that exist within particular economic, historical, and cultural circumstances.
Read the entire report: Insurance And Millennials- A Coming Of Age here.