India is one of the youngest countries in the world and hosts amongst the largest population of millennials. In terms of absolute numbers, at 426 million, , ~36% of India’s population comprises of millennials. This number is greater than US & China, where millennials make up for 21% and 17% of the total population respectively 1 . The demographic will therefore present scope for exponential business growth across industries including life insurance industry where millennials are now the key focus segment.
Max Life India Protection Quotient 2.0 (“IPQ 2.0) survey revealed a positive change in Indian millennials’ overall attitudes and path-to-purchase for life insurance products. With a protection quotient of 37, millennials in India are at par with the country’s overall level of financial protection.
As per the survey, out of all the cohorts, knowledge index increased the most for millennials. Over the course of 12 months, term insurance awareness among millennials increased from 45% to 56% while term insurance ownership increased from 19% to 27%. During the same period, non-millennials too
witnessed growth in both term insurance awareness and ownership albeit at a lower rate. While term insurance awareness among non-millennials improved by 7% from last year, term ownership increased by 6%.
Millennials are also growing more concerned about their financial futures. Among millennials living in metros, 60% were most concerned about not being able to save enough for their future, 61% were concerned about financial security of the family in case of breadwinner's death and 62% were concerned about inadequacy of funds in case of critical illness. Tier I millennials were greatly anxious with regards to sustaining life style and expenses with current earnings, while for Tier II millennials financial security
of the family in the absence of the breadwinner was among the key worries. An increase in anxiety about financial future can be viewed as a positive as the same will drive people to action which will in turnresult in better financial planning and protection.
Interestingly, the way young India searches for life insurance information is also becoming distinct, revealed IPQ 2.0 survey. While online medium is the preferred medium of information search for 33% millennials and 21% non-millennials, offline is the more dominant medium of information gathering for
67% millennials and 79% non-millennials. Even within this group, the ratio of men to women who prefer between online and offline mediums of information is interesting to note. While 27% women searched online in comparison to 29% men, 73% women preferred to search offline in comparison to 71% men who searched offline.
Millennials today are far more evolved in their demands from life insurers and conscious of the various features of their policy. IPQ 2.0 survey revealed that 51% i.e. more than half of millennial term buyers feel that the cover of their term plan is insufficient.
In the backdrop of these evolving preferences, life insurers will need to provide innovative product offerings and expand their omni-channel distribution reach to provide superior experience to this demanding segment of customers. A swift adaptation in response to changing needs of the millennials will be crucial to the growth of the life insurance industry.
Disclaimer: IPQ 2.0 comparison with IPQ 1.0 is for 15 cities only (6 metros and 9 Tier 1 cities)
Aalok Bhan, Director & Chief Marketing Officer of Max Life Insurance.