TransUnion’s study finds millennials pose greater insurance risk than previous generations at the same age, but they may be worth it as customers in the long run. (Photo: Shutterstock)
Millennials in their early 20s tend to be risker drivers than previous generations at the same point in their lives, according to a new report from credit reporting agency TransUnion.
Related: Millennials are not the enemy. Here’s why
The “TransUnion Insurance Millennial Study” examined TransUnion’s proprietary driving history records, distracted driving information and vehicle history information and found:
The frequency of violations is highest for millennials and has been increasing over time.
Millennials receive the most distracted driving violations of any generation and the rate of increase is 1.8 times higher than Generation X and 2.4 times higher than boomers.
Millennials average more driving miles than any other generation (13,725 miles annually), which is 3 percent higher than Gen X and 8 percent higher than boomers.
Millennials have the highest percentage of higher risk vehicles.
Millennials have the highest percentage of only having liability coverage (37 percent).
Wisdom with age
However, the study also found that as millennials reach their early 30s, they perform as well — if not better — than Gen X drivers of the same age. Additionally, fewer millennials have collections as a percentage of credit active consumers compared to Gen X, says TransUnion.
“On a percentage basis, [millennials] tend to get into more accidents and receive a higher propensity of vehicle citations,” said Mark McElroy, executive vice president of TransUnion’s insurance business unit. “As millennials grow older, many consumers in this generation become good risks for insurance carriers who can benefit from long-lasting relationships with this influential group.”
The number of auto insurance quotes a millennial shopper obtains per year — 2.25 quotes — has been higher than the overall population average. (Photo: Shutterstock)
Brand loyalty low
Unfortunately, building long-lasting relationships with millennials may not be easy for insurers. Millennials know how to shop around, and don’t value brand loyalty when it comes to insurance companies.
Related: What millennials want from insurance agents
According to the study, over the last five years, the number of auto insurance quotes a millennial shopper obtains per year — 2.25 quotes — has been higher than the overall population average. The study also found retention rates in this same timeframe show that millennials remain with carriers far less often than prior generations, says TransUnion. Their retention rates are seven percentage points lower than Gen X and 16 percentage points lower than baby boomers.
See more facts about millennial insurance customers in the infographic below, or visit “TransUnion Insurance Millennial Study” to download the full report.
Related: Thinking millennial: How to woo the largest generation
(Click image to enlarge.)