India has one of the largest Gen Y population of the world. Also referred to as the millennial population which comprises of the people born during the period 1981-1996, their population in India is estimated at 426 million, which is approximately 34 per cent of the total Indian population. Further, it is also estimated that the millennial population forms approximately 47% of the total work force. According to research by Deloitte, the generation has become the chief bread earner in most Indian households.
The consumer market in India is now largely driven by the millennial population. They are the largest demographic group with a higher level of disposable income and strong exposure to digital technology. Being connected digitally, they are not only more aware of their needs but also have the ability to drive consumer behaviour. Thus, the demand to evolve and match the needs for this population has become very strong for all markets.
Information is easily available in this digital generation and the awareness on insurance needs is higher. The generation is also more aware of type of plans that are most suited for them. The plans most suitable for and popular amongst this generation are:
Term Life Insurance Policy: The basic insurance needs continue to hold good for this generation as well, since they are currently the bread winners with higher disposable incomes the need for financial protection through risk cover is very strong.
Annuity or Pension Plans: The life expectancy of this generation is high due to the availability of health facilities and awareness; clubbed with a higher standard of living, the need to have sufficient pension planning has become more critical.
ULIPs: This generation is more aware of the equity investments and thus better placed at taking full advantage of the Unit linked plans where the savings are invested in the equity markets. These plans have the potential to achieve high returns but come with potential risks as well.
Endowment plans: Though becoming less popular there is still enough uptake for these plans as an option for a portion of savings with guaranteed returns clubbed with tax benefits.
On the face of it these are basic insurance needs that have been prevalent for previous generations as well, but the difference lies in the way they are perceived and the service needed by this generation. The demand for customer centricity and flexibility is very strong. Added to that the digital exposure requires most solutions to be available on fingertips and with lightning speed. This has made many insurers invest strongly in technology solutions and has also led to the rise of various insure-techs offering tailor made and simple solutions for this market.
In conclusion, although the insurance need still stand upright; the millennial generation is driving the new face of insurance sector.