Senior Drivers: A Golden Insurance Telematics Opportunity
Earlier this year, the Center for Financial Inclusion at Accion and HelpAge International released a report highlighting some financial opportunities that stem from the burgeoning senior market. And burgeoning it is. The U.S. Census Bureau estimated that by 2050, there will be 83.7 million people age 65 and older, nearly doubling their numbers from 2012. Two words: baby boomers.
As seniors make up an ever-greater percentage of the population, their presence on the road and in the auto insurance market is due to grow. For insurers, that’s a trend to keep pace with. For insurers offering smartphone telematics, it’s also an opportunity. Senior drivers aren’t just numerous, you see. They’re mobile-savvy, and they’re underserved.
Myth: seniors aren’t a mobile audience
If the notion of mobile-savvy seniors makes your brain hurt, that’s okay. It’s a common misperception.
Last year, Axial Exchange contributor Matt Mattox penned an article about a conversation he’d had with a health system exec. “Seniors don’t use smartphones,” the exec told Mattox. “Their fingers don’t work well enough to navigate the screens.” Despite the point-blank conviction in those words, Mattox didn’t accept the statement at face value. Instead, he did some research. Long story short, the exec was wrong.
True, people over age 65 have historically been late adopters, “but their movement into digital life continues to deepen,” said the Pew Research Center. And once they do adopt, “digital technology often becomes an integral part of their daily lives.”
• Adults age 65+ who own a cell phone: 77 percent
• Seniors who own a smartphone: 27 percent
• Increase since 2014 in smartphone ownership among those 65 and older: 8 points
According to the Deloitte Global Consumer Survey, if you broaden the age group to include people over 55, smartphone ownership rises to 37 percent. Even if you stick to those age 65 or older, 43 percent of those earning $75K or more in 2013 own a smartphone.
That’s nowhere near the adoption rate for millennials, of course. “However, older age groups are not far behind, as Baby Boomers and Seniors continue to become technology savvy, surpassing the younger age groups in certain smartphone activities,” said Media Horizons.
“Those that assume all seniors are unwilling or incapable of using mobile devices … are ignoring a vibrant and growing population,” Mattox concluded. The same holds true for auto insurers, too.
Fact: seniors are dramatically underserved
We’ve observed before that seniors are dramatically underserved by the traditional auto insurance model, which ignores the demographic’s potential positives – lower mileage, better caution and greater experience – in lieu of penalizing the potential negatives, like slower reflexes or imperfect vision.
That’s a problem for a group whose opinion is rarely sought out even when it matters most. “Older people feel stereotyped and overlooked by a society which sees them as a burden,” reported the Daily Mail. “Almost three quarters of over-65s say they are rarely or never consulted on services that impact on their lives.”
We can do better. Thanks to smartphone telematics, insurers can treat seniors as individuals, not stereotypes. “UBI has the advantage of utilizing individual and current driving behaviors, rather than relying on aggregated statistics and driving records that are based on past trends and events, making premium pricing more individualized and precise,” said the National Association of Insurance Commissioners.
In so doing, insurers can position themselves to capture a market whose boundaries are ever expanding. Learn more about insurance telematics marketing opportunities by downloading our free report, “How to Survive and Thrive in a Stagnant Market.”