Millennials want to do business with companies that understand their preferences. (Photo: Shutterstock) 

1.  Make it a personal experience

Millennials are drawn to products and services that are highly personalized, and are becoming increasingly more sophisticated when it comes to doing business with companies that understand their preferences. To engage this group, your safe driving rewards and value-added services should appeal to their wildly varying tastes and needs

By understanding various sub-segments of this group, you can begin to customize the UBI experience for dozens or even hundreds of sub groups. A 19-year-old college student in a small town in Ohio may have significantly different needs and expectations than a 24-year-old urban professional.

To execute on this level of personalization easily and effectively, you'll need access to rewards providers that can seamlessly integrate with your program, allowing you to configure and manage your safe driving rewards and incentives across multiple sub-segments in numerous locations. An open telematics platform that is fully integrated with rewards providers and allows you to customize and configure programs via a non-technical, user-friendly web-based interface can put your UBI program ahead of the market.

Millennials want to pay for insurance according to their risk profile. (Photo: Shutterstock) 

2. Appeal to their senses

Millennials are adept when it comes to socio-economic issues. Let's not forget, these consumers were significantly impacted by the Great Recession. This group also views themselves as smart consumers, feeling empowered by information. So when it comes to insurance, they've likely done their homework, and will want to know that the price they're paying is relative to their risk profile.

Related: Designing a UBI program for the 'average Joe'— and anyone else

When you also consider that the average upscale millennial lives within a 10-mile radius of a major city, it's safe to bet they've questioned the need for even owning a car. Anyone who has ever lived in or near a major city has pondered this question: If I'm commuting to work on foot or via mass transit every day, and only using my car on the weekends, should I pay the same for insurance as those who drive a lot more miles?

Integrating a "pay per mile" option into your UBI program could address these concerns, enabling you to attract this coveted audience segment. As we've seen recently with several insurers offering this as an alternative product, "pay as you drive" insurance is growing exponentially and will only continue to do so.

Remember, you're playing a long-term strategic game here; one that benefits those willing to be boldly different when it comes to taking market share. Don't be afraid to meet your prospects where they are, and get them passionate about a more custom policy.  

Millennial drivers may be more inclined to participate in a UBI program with the right incentives. (Photo: iStock) 

3.  Offer incentives for referrals and encourage your customers to become "ambassadors" for UBI

If we've learned anything from the high-flying success of social media, it's that customer referrals are the lifeblood of success for many companies, and the viral network effect can, and does, contribute to the growth and positive perception of products and services deemed to be "share-worthy."

Related: Telematics in insurance: beyond pricing

Millennials make up the vast majority of social network users, and they are willing to share their knowledge and experience with their networks. Up until recently, talking about insurance was at the bottom of that list, if on the list at all. UBI is changing that.

To get in on this dynamic, consider creating a program that incentivizes referrals, offering impactful rewards. You already know how much it costs for you to acquire a new customer, and in all likelihood, most insurers are willing to pay a lot more for one who is statistically likely to have a much higher retention rate. Don't be afraid to get aggressive here and offer something meaningful.

Ultimately, as you think through your UBI strategy, you'll need to consider all of the audiences for your programs and the technology that will be scalable enough to support near- and long-term initiatives.

These ideas can help companies engage with a segment that is open to what telematics may offer, but delivering on consumer expectations for this group or others will be largely reliant upon an insurer's ability to employ a flexible, configurable approach.

Deke Phillips is principal consultant – telematics for CCC Information Services Inc., responsible for helping auto insurance companies develop and deploy telematics and usage based insurance programs, including the integration of telematics data into underwriting and claim workflows. Prior to joining CCC, he served as director, insurance data solutions for LexisNexis, and has over 15 years of P&C insurance industry experience, serving in previous roles including AVP Underwriting with Chubb Insurance, vice president Global Risk Management with Marsh & McLennan, and director with AmTrust Insurance. He can be reached at [email protected].