Millennials and Gen Z offer the greatest growth potential for general insurance, according to new research from market research firm Roy Morgan.
These two youngest generations currently have much lower incidence of general insurance than the older groups but offer the greatest potential as they get older and their insurance needs grow, finds Roy Morgan’s Single Source survey of over 50,000 consumers per annum, including coverage of over 40,000 general insurance customers.
Only 40.9% of Gen Z and 79.9% of millennials have any type of general insurance due mainly to their younger age and associated lower property involvement. The survey findings show that the general insurance penetration by age bracket in the 12 months to March 2018 was:
||Year of birth
||General insurance penetration
||Dollar Share of Premium
The older age groups are close to saturation with general insurance, leaving the major future growth potential with millennials and Gen Z.
Gen X and baby boomers have highest share of premium value
Generation X currently accounts for 29.5% of the value of the annual domestic general insurance premium market, followed by baby boomers with 28.1%. These two generations combined account for 57.6% of the current total estimated annual premium value of A$23.3 billion (US$17.5 billion) for this market.
Although millennials account for 23.1% of the total premium value, their general insurance penetration of only 79.9% leaves a large market opportunity as their needs grow over the next decade. Gen Z currently accounts for only 7.4% of market value but with an overall general insurance penetration of only 40.9% there is a great growth opportunity in coming years.
Pre-boomers account for 11.9% of the total premiums but as the oldest group, their numbers are declining. As 91.3% already have general insurance, their growth potential is limited and as a result customer retention should be the major focus.
Mr Norman Morris, Industry Communications Director, Roy Morgan said, “The growth prospects appear to be greatest with the growing needs of millennials and Gen Z but at the same time there is a need to retain the customers in the three older age groups.
“This is a highly competitive market where many shop around at renewal time, so there is a need to focus on customer satisfaction and competitive pricing.”