Experian reveals how ‘Facebook Generation’ engages with insurers
15 August 2011, London, UK – A report from Experian® published today sheds new light on how the UK’s young adults engage with insurers. Defined by Experian as the ‘Facebook Generation’, this group of savvy 18 – 25 year olds have taken social media and its ideologies into adulthood, influencing how they deal with insurance companies, while six out of ten admit to relying on friends and family for financial advice.
A common goal amongst the Facebook Generation is to obtain great value on their insurance facilities and cheap premiums for motor or home insurance rate highly among this customer segment. Driven by the ‘price-comparison culture’ of aggregators and high-profile consumer websites, 42 per cent of the Facebook Generation requiring motor insurance changed their provider at their last renewal, compared to 34 per cent of all adults.
Data from Experian Hitwise reveals that young adults are the fastest growing segment of society for visits to insurance websites, increasing by 40 per cent in the last year alone. Experian research also shows that of the 48 per cent of young adults with some form of motor insurance, nearly half (46 per cent) arranged it direct via the internet with the insurer (compared with 38 per cent of all adults) and a further quarter (26 per cent) used a price comparison site (compared with 19 per cent of all adults).
This trend is echoed in the figures for buildings and contents insurance with almost a third (31 per cent) of young adults arranging it direct with the provider over the internet and a further 12 per cent through an aggregator. The corresponding figures for all adults were 23 per cent and nine per cent respectively.
The Facebook Generation uncovered
Social media is second nature to the Facebook Generation and they are 14 per cent more likely to use Facebook than the average UK internet user. Members of the Facebook Generation are in their first job, some even having their first foot on the property ladder. As detailed in Experian’s ‘Banking on the Facebook Generation’ report, only a few in this group have a car and most do without. Extensive users of mobile phones and technology, the group’s overriding characteristic is its appetite to always find the best financial deal, from insurance through to credit cards and mortgages.
Jo Buxton, Insurance General Manager at Experian, commented: “Our report shows that the Facebook Generation has a new set of expectations around how they should be served by insurers and other financial services providers. Social media makes young adults better informed, more able to share grievances and more open to influence from peers and providers than ever before. They want immediate information, instant decisions, faultless customer service and the ability to manage their policies on the move. Insurers with a deep understanding of how their customers are interacting around their brands online will be well placed to capitalise on the opportunities this demographic presents now and in the future.”
How insurers can target ‘The Facebook Generation’
The challenge for insurers is to capture the attention of this segment as well as find new ways to assess risk. Those insurers collecting more data on the insurance proposal form will be at an advantage, whether the individual’s credit risk details are being used to assess premiums or the information shows the type of car being driven. Making maximum use of all data available will also ensure risk assessment around crucial pricing decisions happens quickly and more accurately.
Insurers choosing to target this demographic should use social media to engage and communicate by encouraging the sharing of information, offers and advice with friends and family. Lastly, embracing technology and utilising online channels for customer service opportunities is vital for insurers who have the desire to deal with this demographic.
Notes to editors:
Experian has combined the insight available from Financial Strategy Segments (with specific focus on the following three types: Early Settlers, Tomorrow’s Earners and Entry-level workers) and extensive research from YouGov on the financial behaviour and attitudes of the UK population. For the purposes of this the following research surveys were appended with Financial Strategy Segments (FSS) and the results aggregated according to the FSS Group or Types assigned.
1 Financial Strategy Segments combined with YouGov quarterly Debt Tracker survey data (August 2008 to October 2010)
2 Financial Strategy Segments combined with YouGov monthly Household Economic Activity Tracker (April 2009 to November 2010)
3 Financial Strategy Segments combined with YouGov annual Financial Services Oracle (2009 to 2011)
About Financial Strategy Segments 2011
Financial Strategy Segments is a person and household level segmentation which provides an unrivalled depth of insight into the financial behaviours of UK consumers. It classifies all adults in the United Kingdom into 14 household level groups (A–N) and 50 household level types (which are then further split into 93 person level types). Financial Strategy Segments has been built with the latest available data to reflect changes in behaviour during the economic downturn, supporting the targeting of products and services that are relevant to the consumer’s needs. These are distinct financial lifestyle types which comprehensively describe the underlying factors which influence consumer behaviour, such as typical financial product holdings, behaviour and future intentions, as well as summarising their key socio-economic and demographic characteristics.
Sources of data used to describe individual financial circumstances include income, outstanding mortgage, unsecured debt, credit balances, investments and property assets. FSS also takes into account individual consumer attitudes towards financial products such as channel choice when researching, purchasing and managing personal financial products. It also includes people’s likely loyalty, switching behaviour and general attitudes towards credit.
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was US$4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com