Generations X and Y overlooked by Canadian life insurers: EY

Financial protection and savings needs of this growing segment are unmet

TORONTO, Feb. 25, 2015 /CNW/ - Generations X and Y (Gen X and Y) are overlooked by Canadian life insurers, according to EY's 2015 Canada life – annuity insurance outlook, released today. Exploring this underserved consumer market will help insurers achieve growth and relieve pressure on costs and margins.

"Traditional insurance products and distribution channels aren't well suited for Generations X and Y – a market segment that continues to grow," says Marc-Andre Giguere, EY's National Insurance Leader. "They look for simplified products that deliver value and are easy to understand."

They're also much more likely to do their own research on insurance products, mostly online. While catering to Gen X and Y may be a challenge, the adjustments may lower the insurers' high expenses that have made these markets difficult to serve.

Insurers can appeal to this market in two notable ways: improve direct-to-consumer relationships and develop a multi-channel approach.

Direct-to-consumer
As Gen X and Y are more open to dealing directly with insurance companies, insurers must explore a more direct-to-consumer approach, using data analytics for more efficient underwriting. A streamlined underwriting process means faster service, more sales and lower expenses. In the long run, this analytics-based approach can evolve into online sales systems that target consumers via websites, mobile apps and online videos.

Multi-channel approach
To satisfy the younger generations' need for convenience and better customer experience, insurers have to embrace a multi-channel approach. They need to develop a digital platform to interact and share information among agents, brokers and consumers alike. The availability of customer information across channels is the minimum required to offer self-service options and an enhanced customer experience.

By providing life insurance and annuities to these markets in ways they want to access and evaluate the products, insurers may be able to achieve growth and improve the industry's reputation. According to EY's recent Consumer Insurance Survey, customer trust in life insurance companies is low.

"Insurers that stay on the sidelines as others make these investments to serve next-generation markets risk losing existing customers, while limiting their opportunities to connect to new customers," adds Giguere.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

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SOURCE EY (Ernst & Young)

Erika Bennett, [email protected], 403 206 5157; Julie Fournier, [email protected], 514 874 4308; Sasha Anopina, [email protected], 416 943 2637