While generational differences are evolving and having a big impact on homeownership and insurance usage in the U.S., millennials and the youngest of Gen X are experiencing noteworthy delays in owning a home due to the Great Recession, according to a new study by TransUnion’s annual insurance summit. In addition to the delays in homeownership, the study also found that out-of-state migration patterns that were partially driven by the covid-19 pandemic, pose risks to insurance providers’ bottom lines as consumers preferences and needs are evolving.
The TransUnion study released in May, found that Gen Z and millennials are moving at rates higher than those who are considered Gen X and baby boomers. Per study data, millennials now drive most first-time home purchases, accounting for more than half of purchases at the end of last year.
In an interview with GoBankingRates, Michelle Jackson, senior director of TransUnion’s personal property and casualty insurance business, said the trend is due to consumers generally tending to move more frequently in their younger years.
“However, work from home flexibility, initially out of necessity from the pandemic, has continued with many companies shifting to more permanent hybrid or fully remote models,” Jackson said. “With the ability, in some cases, to work from anywhere, consumers are making decisions on where to live based on factors beyond proximity to their office.”
Jackson went on to say that the recession had a big impact on wages and savings and that millennials have spent the majority of their adult life in an unpredictable economy. Many millennials entered the workforce during the recession and reached prime earning and home buying years during the covid-19 pandemic.
“Coupled with delaying other significant life decisions, such as marriage and having children, this has resulted in a delay in the need to purchase a home and settle down,” Jackson said.
Along with a more cautious approach to buying a home, Gen X and millennials are engaging with their insurance providers beyond basic coverage of their homes, the study notes. “Increasingly, people want them to serve as trusted advisors and partners who can help avoid losses in the first place,” Jackson said.
TransUnion found that these generations expect a digital shopping experience as they compare policies and prices. In addition, they are showing a desire for frequent engagement with insurers for annual coverage reviews along with more meaningful engagement such as auto and home safety tips and maintenance reminders. Baby boomers indicated they would prefer not to hear from their insurer unless they reach out first, the study found.
“Older generations were largely influenced by brand loyalty. Loyalty from younger generations is not as easy to win, and they are constantly seeking out value, advice and a seamless experience,” Jackson said.
Jackson went on to say that younger generations are increasingly more financially savvy and will likely seek out more value in their insurance.
“Consumers are also looking for more information or advice on how to protect their home and belongings, and with the proliferation of smart home devices, insurers should be looking for ways to capitalize on the use of connected devices,” she added.
Jackson also pointed out that as consumers migrate to southern states such as Florida, Texas and North Carolina, they will need to pay attention to the total cost of ownership beyond market price.