How gen­er­a­tional dif­fer­ences shape cov­er­age choices 

Matt 0:05: Hello and welcome to Assurity’s new podcast, Focus on Voluntary Benefits. In this series, we've partnered with Eastbridge Consulting Group to discuss the state of the voluntary benefits industry, as well as strategies brokers can use to grow their business in today's market. I'm your host, Matt. Today, I'm pleased to welcome Ginger Bates. As Eastbridge’s Director of Research Services, Ginger manages and implements projects designed to help the voluntary market further its growth. She also works one on one with clients and research that helps them enhance their marketing strategies, products and processes. Ginger, it is great to have you here today.

Ginger 0:42: Thank you for having me.

Matt 0:44: So as you know, today we're going to be discussing the power of generational demographics and how they can impact the voluntary benefit strategies that brokers use. To get started, how can an awareness and an understanding of generational demographics help a broker guide an employer when deciding what products they should offer to meet the needs of that employer’s workforce?

Ginger 1:05: Well, let's start with defining sort of what a generation is. A generation by definition is a group of people born within a certain timeframe that have experienced key historical events that have shaped their lives. So they have a lot in common. But at the same time, the individuals that make up a generation are also very diverse in regard to what is going on in their lives, and that impacts their specific needs, and purchase behaviors. So with all that in mind, I would say that generational demographics is a good place to start in terms of understanding general trends and preferences. But when it comes to better understanding benefit needs and purchasing decisions, we need to delve a little bit deeper. For instance, a millennial who is married with children is going to make far different benefit decisions than a fellow millennial who's 10 years younger and single, or a Gen Xer who makes $60,000 and is married but with no kids at home is going to have different needs than a fellow Gen Xer who makes $150,000 and is remarried with a second family. So I guess what I'm saying is that while overall, generational demographics can be helpful, drilling down even further to look at the multiple demographic layers, particularly income, marital status, and children under 18 living at home is key. So, I think knowing the makeup of the account at this more detailed level can help a broker plan for the types of products as well as the way to approach education and enrollment.

Matt 2:42: Yeah, I think you bring up a really good point there, in that it's pretty easy to put everybody in a generation into the same bucket and make assumptions about one age group or another, and how they feel. But that can be a dangerous thing to do. Would you mind going into why that can be a dangerous assumption for a broker or employer to make, and can you possibly highlight some common assumptions or misconceptions about certain generations that your data has proved incorrect?

Ginger 3:09: One that immediately comes to mind is the role of technology in the enrollment process. From a generational standpoint, we might expect boomers and Gen Xers to be less tech savvy, and more interested in talking to someone to enroll versus using a self-service enrollment method, for instance. But based on our data, that really doesn't pan out. Boomers have the highest percentage preference for enrolling online via self-service method. And that's followed by Gen Xers and then millennials. So boomers also express less interest in enrolling with a representative or on the phone with an enroller than do Gen Xers and millennials. So that's a little bit maybe different from what we might assume. Another assumption might be that boomers might not own voluntary products as frequently as Gen Xers or millennials, but when looking at the percentage of people that own at least one voluntary product across generations, the percentages of ownership are essentially the same – around 44%. So those are just a couple of examples.

Matt 4:17: Yeah, wow. And I think those are really good to highlight just how our assumptions might be incorrect. I certainly wouldn't have guessed that’s how those demographics would pan out, but there we go. Now, I'm sure most people wouldn't be surprised to hear that there are differences in how the various generations view insurance and voluntary products, and certainly if you're out selling them, that's something that you're gonna see all the time. But are there instances where the various generations are surprisingly similar or aligned, and then you don't see as many differences here?

Ginger 4:47: Well, in our employee survey, we asked each respondent to place a value on various types of coverage on a scale of 1 to 5, with 1 being least important and 5 being most important. So regardless of generation, all employees rate the importance of benefits such as medical, dental, prescription drug, and vision pretty equally. And while there are some differences in the importance ratings for other products, such as critical illness, accident or hospital indemnity, they really aren't as far apart as you might think. In addition, when asked about the reasons they purchase voluntary products, the top three reasons are the same across generations: reasonable cost for the coverage; the products purchased fill a need; and the products purchased help fill gaps in their primary medical coverage. It's also important to note that when employees who don't currently own a particular product are asked if they are interested in purchasing that product on a voluntary basis, there is strong interest in many different types of products, regardless of generation. So the interest is there. The reasons for purchase and the importance they place on it – having benefits, good benefits and a variety of benefits – does not differ by generation. Every employee rates those pretty consistently.

Matt 6:15: Yeah, that's definitely good to know as well, in that, you know, no matter what generation somebody belongs to, that need for voluntary benefits is still there. It's still something that people are looking for. Now, despite the fact that the need for voluntary might be similar across generations, who generations purchase from is different – at least in Assurity’s experience. We've noticed perhaps a swing toward the mission and values of a company having more importance among younger generations and who they're buying from. So would you say that your data agrees with that or not? Is a company's mission and values more important to younger generations in terms of influencing their behavior?

Ginger 6:57: I don't know that I would say it's more important. I would acknowledge that it certainly is important and may be viewed a little bit differently from generation to generation. But when we ask about the reasons for purchasing voluntary products, in addition to what I mentioned earlier – the cost, reasonable costs, need and convenience – we also asked about the importance of the reputation of the company for service and claims payments, and the importance of the name of the company being well known. And both were rated as either somewhat important, important or very important by over 80% of employees regardless of generation. So, I think it is something that there may be some differences in how those generations may evaluate that. But overall, when we asked about the reputation of the company and the importance of that, it was consistently rated as important by them, regardless of which generation they reside in.

Matt 8:00: Interesting. So it isn't just these younger generations, and no matter what generation people belong to, they still want to see these positive aspects to the companies they're buying from.

Ginger 8:11: Right. And one of the things that we did ask is the importance of a reputation at the company for service and claims payments. Obviously, that doesn't necessarily speak to what you're talking about as far as the mission and values. But it does in some ways, because it speaks to the integrity of the company, to provide for them what they’ve purchased at their time of need. So, you know, it is a little bit different from we didn't ask them specifically about mission and values. But if you look at it, that really expresses those mission and values in a different way.

Matt 8:50: Yeah, no, absolutely. So breaking down voluntary products by age group: Are there certain products that different age groups own more? And do they have different reasons for buying them?

Ginger 9:03: Well, I will say that boomers are most likely to own permanent life – the whole or universal life – product, prescription drug, vision, accident or term life on a voluntary basis. OK? Gen Xers are most likely to own term, or whole or universal life. So life products, followed by short-term disability, and accident. Millennials are most likely to own voluntary term or whole life again, similar to the other generations, but with accident, vision or dental. So, as you can see, there's some differences but there's also commonalities there. Life insurance, both term and permanent, is owned at similar rates across generations. Accident insurance is also commonly owned across those three generations. As for the reasons for buying volunteer coverages, the top reasons remain the same: the reasonable cost, filling existing personal needs, and bridging potential gaps in existing coverage. But there are a few differences by generation that are notable. But Gen Xers and millennials give higher importance ratings than boomers in regard to the convenience of purchasing at work, and employer’s endorsement of the products offered, and the influence of friends, family or coworkers in the purchase process. So, again, the main reasons for purchasing are the same, but there are some differences among generations that are interesting.

Matt 10:38: Yeah. Now, anecdotally we've seen, perhaps older employees tend to purchase more voluntary products through their employer. Is this something that your data supports or not?

Ginger 10:48: The percentage of employees that own at least one voluntary product through their employers is essentially the same for boomers, Gen Xers and millennials. However, there is an important difference – it is important to note boomers are more likely to only own one voluntary product. So they're less likely to own four or more voluntary products compared to Gen Xers and millennials. So with that, you know, they're more likely to own one, whereas the younger generations are more likely to own multiple voluntary products.

Matt 11:21: Interesting. Data seems to show the opposite then – that the younger generations are more apt to purchase more products. So in terms of what these products include, one thing that we hear a lot about is portability. Is there one generation or another that places more importance on the portability of their voluntary coverage?

Ginger 11:42: Well, the importance of portability to employees is not something we have any direct data about, but we do know that all generations rate the importance of the various products very similarly. Like I mentioned before, when we asked, “In general, how important are these products to you?” they rate them very similarly. With that in mind, I think we can say that as an employee rates having a particular type of coverage as important, then being able to keep that coverage if they change jobs would also be important to them. One other thought: We do know that life products tend to be ported more often than other products, especially UL and whole life. So the fact that life products are some of the most frequently owned voluntary coverages, regardless of generation, also could be an indicator that portability is important to all employees.

Matt 12:35: And I think that's good to keep in mind – that satisfaction and the desire to report a product are very closely tied often. And that's something very important to remember.

Ginger 12:45: Well, the satisfaction and the value that they place on it is, I think, directly related.

Matt 12:53: Yeah, absolutely. Now you mentioned earlier in terms of satisfaction that some generations would like in-person enrollment, some want virtual enrollments, but enrollment satisfaction is going to be really key in determining participation and determining just how good an enrollment is. Can you talk a little bit about how some generations differ in their enrollment satisfaction generally?

Ginger 13:17: Sure. Well, when we asked about overall satisfaction with the voluntary enrollment experience, it was very similar across generations. About 71% of employees are satisfied or completely satisfied with their voluntary enrollment experience, which is pretty high. But if you break down the enrollment process, the enrollment experiences that employees get the highest satisfaction ratings for are: “the application process was simple and straightforward;” “they felt that their needs were identified.” And during the enrollment process, “they felt like they received adequate information, support and advice to make their decision.” So when we look at the data by generation, boomers’ satisfaction levels for the technology used in the buying process, you know, feeling that it was helpful is slightly lower than Gen Xers and millennials. So that's an interesting difference. And Gen Xers and millennials had lower satisfaction ratings for “the benefits were easy to understand.” So I think the takeaway from all this is that most employees are generally satisfied with their enrollment experience, no matter the method that they use to enroll. However, keeping the process simple, informative and easy to use is key, no matter who you're speaking with, and the lower satisfaction ratings for ease of use for boomers, and understanding the benefits by millennials and Gen X certainly give a broker some additional ammunition when working with an employer to make sure that the enrollment process is multifaceted, so that they're touching those people in many different ways and through many different channels, if that makes sense.

Matt 15:04: Yeah, absolutely. And reaching these employees through different channels is incredibly important, especially. Let's talk a little bit about benefits enrollment and these communication methods; specifically, the preferences and the timing that employees will have on them. How might a broker vary the use or the timing of these various methods to be more effective when targeting different generational demographics? Are there certain ways that certain generations want to be contacted and communicated with?

Ginger 15:34: Well, we asked first what communication methods are used most frequently by employers. And then we also asked which are most helpful. So let me just go through that and hopefully we can answer your question that way. So the most frequently used communication methods by employers to introduce voluntary benefits to their employees are emails and newsletters, printed materials provided at work, the employer’s website, group meetings, and printed material sent by the employer to the employee’s home. So we provided them a long list of things that they could check that were used by employers. So you can see by that list that there's a variety of ways that the employer is communicating to their employees, which is important for a broker to note and to assist with. But when asked when which communication methods were most helpful, the top five just listed are also listed as the most helpful, regardless of generation. So I think the important takeaway from this data is not that the brokers need to target specific types of communications for employees in a particular generation. The key takeaway is that most employers use multiple ways to communicate to their employees, and most employees value having multiple sources of information, regardless of their age or generation. So, brokers need to make sure they have a variety of communication messages and methods ready and available for the employer to use before, during and after the enrollment process. So, multiple methods of communication – multiple touches, before, during and after the enrollment process – is always valued across the board.

Matt 17:29: I think it's great that we're seeing a lot more similarities across generations than we are differences. Now we've taken a little bit of a look at Eastbridge data around enrollments, and it shows that about a quarter of all demographics that you surveyed would prefer to enroll with a sales representative. So how can a broker use this and other data to secure the most favorable enrollment conditions for a group?

Ginger 17:53: When we think about enrollment, there are really two components of an enrollment. The first is learning about the benefits and then actually signing up for them. So those two things can be looked at separately. And while a lot of people prefer to sign up for their benefits through an online or digital process, I think some still really want to meet with, talk to or Zoom as we do now, with someone to be better educated about their choices before they actually do the signing-up process. So, in a survey, we actually asked them two questions about enrollment: “What method did you use in your most recent benefits enrollment?” and then which method they would prefer to use in the future. The 25% was the average overall of employees that had used a method that involved either meeting in person or on the phone with an enroller or sales representative. So interestingly, both Gen Xers and millennials, those had a higher usage of in-person methods for their most recent enrollment – 29% compared to the 25% for the overall group. But all three generations showed greater interest in in-person enrollment method for the feature, with the largest increases in the area of interacting with the sales rep. There are two facets to that – either via computer with the sales rep walking you through the enrollment process, or with a sales rep walking you through a paper process. But with all that said, the majority of employees still say they prefer to enroll on their own, with about half preferring an online enrollment process. So we have to acknowledge that, and that is going to increase, I think, this fall as the pandemic continues. But we all know that even if we say we prefer to enroll online on our own, most people also want to have a place to go with any questions that might come up. So employers appreciate, I think, creative solutions that meet the needs of their employees. So if I had to recommend something for a broker, crafting a hybrid scenario that includes some type of group meeting and/or live call center line for education and questions, in addition to ultimately enrolling can really create a win-win for everyone involved.

Matt 20:14: Yeah, it's important to keep in mind that even when employees prefer to enroll by themselves, that education aspect and that communication surrounding it is going to be even perhaps more key.

Ginger 20:27: Well, and with the interesting times that we're in and the differences, and the changes that are likely to occur in terms of perhaps reduced group meetings and those types of things, we have to really figure out some creative solutions to meet all of those needs. But it is important always to remind an employer that their employees do really want to be able to speak to someone if they have questions.

Matt 20:55: Definitely. So what are some other takeaways that brokers can use and keep in mind as they create voluntary benefit strategies for their clients going into year-end enrollments?

Ginger 21:06: Well, thinking of a few kind-of-overarching themes that I would stress to brokers when it comes to preparing for enrollments for the fall of 2020, first, be flexible to provide options. You need to be able to offer multiple messages and communication methods for employers to use. And the same applies to offering multiple enrollment methods. If you don't have the capability to provide live support via phone, I would suggest looking into it. If you don't currently have an online platform to offer to those smaller employers who don't have their own, you need to find one to include in your offering. Second thought is to keep it simple. Make sure the benefits needs assessment tool used in the enrollment process begins with assessing those three key demographics that drive purchases that we talked about earlier: income level, marital status, and children under 18 in the household. In addition, always keep in mind that the main reasons employees say they purchase volunteer products: reasonable cost, the product fills a particular need, or the product bridges an existing gap. Those are key to keep in mind as well as you do that assessment. You know, that all may seem very obvious and elementary, but with fewer in-person opportunities available and compressed enrollment timeframes likely in the near future, you really need to concentrate on the basics. And then finally, just be willing to offer new products and benefit solutions. And every survey we do with employees, significant numbers consistently say that they are interested in purchasing a large variety of additional benefits and are willing to pay for them on a voluntary basis. So in the 2019 survey, about 30% of employees who do not currently own cancer, critical illness, identity theft, pet insurance or hospital indemnity say that they are interested in buying these types of coverages on a voluntary basis. There's also a growing interest from both employees and employers to offer other nontraditional benefits such as financial wellness tools and education, mental health benefits, payroll loans, discount programs for things like grocery delivery, workout apps, all those kinds of things. So be sure to communicate that strong employee level interest in voluntary products to your clients. Those are my thoughts of sort of what they need to prepare for fall of 2020.

Matt 23:39: Definitely, and I think brokers keeping all those in mind will absolutely help them to succeed in their upcoming enrollments. Is there anything else, Ginger, that you'd like to add for our listeners?

Ginger 23:49: I don't think so. But I think I would just encourage the brokers out there, as I mentioned, to be creative, be responsive, and keep it simple, as I mentioned, and focus on providing those solutions for the employers and help them work through what will be a more difficult situation than usual.

Matt 24:17: Absolutely. Well, thank you so much for your time today, Ginger, it has been an absolute pleasure talking to you and getting your insights on what brokers can do to help boost their enrollments this fall and to help bolster their strategies.

Ginger 24:32: OK, thank you for having me.

Matt 24:35: And to our listeners, thanks for tuning in to Assurity’s Focus on Voluntary Benefits. If you'd like to learn more about Assurity and our voluntary products, visit Assurity.com. You can also email us at podcast@assurity.com and we'll be happy to connect you with the sales team in your region. If you'd like to learn more about Eastbridge Consulting and their research, you can visit them at Eastbridge.com. Thanks for listening.

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