Insurance industry must be bold and embrace millennials, warns VCIA speaker

The insurance industry must be bold and embrace the changes being brought about by the influx of millennials into the labour market, and into the consumer market, according to Laura Drabik, group vice president for business innovation at Guidewire Software.

Giving the keynote speech on day one of the VCIA conference, Drabik said 75 percent of the workforce will be millennials by 2025. But perhaps even more importantly, millennials will also have become the major consumer of insurance products.

The first generation to have grown up as digital natives, millennials have higher expectations for technology than the generations before them, she said, as well as having less disposable income and brand loyalty. Insurance companies must therefore adapt to stay relevant.

Drabik said the on demand economy had already been a paradigm shift for the industry, with insurers having to think less about insuring people as the owners of assets to insuring people as users of assets.

But this change does not only affect millennials. While around 50 percent of users of on demand services are millennials, around 22 percent are over 55, meaning older generations are benefiting from the changes being driven through by millennial preferences.

To remain relevant, insurance therefore has to embrace new technological trends, said Drabik, including omnichannel delivery, where users can switch seamlessly between an app, the web and voice, depending on what suits them at a given moment; self service insurance delivery; and chatbots, which allow companies to offer extended customer service hours for reduced costs. Such innovations can be used to dramatically improve the delivery of all sorts of insurance products, such as workers compensation, said Drabik. Wearable technology can also reduce risks for insureds, she added.