Millennial Drivers Pose Greater Risk than Previous Generations at Same Age, Study Finds

Millennial Drivers Pose Greater Risk than Previous Generations at Same Age, Study Finds

Millennials in their early 20s tend to be riskier drivers than previous generations at the same point in their lives, according to a new TransUnion study.

Millennials in their early 20s tend to be riskier drivers than previous generations at the same point in their lives, according to a new TransUnion study.

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.

“Younger consumers are generally viewed as being the riskiest in the insurance market – oftentimes for good reason,” said Mark McElroy, executive vice president of TransUnion’s insurance business unit. “On a percentage basis, they tend to get into more accidents and receive a higher propensity of vehicle citations. Our study data clearly proves this, but we also derived new findings that paint a better picture of them. 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.”

Millennials represent approximately 80 million consumers, which is about 25 percent of the population and nearly double that of Gen X, according to the U.S. Census Bureau. That makes them the largest generational market for insurers.

Winning their loyalty, though, might not be so easy.

According to the study, millennials tend to be less loyal to existing insurance carriers. Over the last five years, the average number of auto insurance quotes a millennial shopper obtains per year – 2.25 quotes – has been higher than the overall population average.

TransUnion’s study also found retention rates in this same timeframe show that millennials remain with carriers far less often than prior generations. Their retention rates are seven percentage points lower than Gen X and 16 percentage points lower than baby boomers.

“The more we examine the driving and insurance shopping behavior of millennials, it becomes apparent that the engagement model must change for insurers to attract millennials and write them profitably,” said Jeff Reynolds, vice president for product development of TransUnion’s insurance business unit. “That said, carriers will have to adjust process and metrics appropriately to better meet their needs. For insurers looking to better engage with millennials, comprehensive underwriting and alternative pricing and products that target millennials’ specific needs will be more important than in the past.”

The Most Distracted Generation

TransUnion’s study found that there might be good reason for some carriers not to offer policies to millennials, especially those who cannot identify and price the risk appropriately. The study examined TransUnion’s proprietary driving-history records, distracted-driving information and vehicle-history information that 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 Gen 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).

“I don’t think you will ever see a time when the youngest consumer group poses a lesser risk than older ones, but our study clearly shows that despite the risk, it’s in an insurer’s best interests to develop relationships with them – even at the beginning of their insurance journey,” concluded McElroy.


You May Also Like

Repairify, Autel Announce New Initiatives for 2024

In Q1 2024, Autel and Repairify will continue to enhance the value of their combined services for their users through various planned releases.

Repairify, Inc., a portfolio company of Kinderhook Industries, LLC, and Autel U.S., a wholly-owned subsidiary of Autel Intelligent Technology Corp., Ltd., are focusing on key partnership advances made this year and announcing bold initiatives for 2024. 

Repairify and Autel have enhanced the efficiency of the collision and glass repair shop workflow and documentation process by seamlessly integrating Repairify’s remote services and authentic OEM tool scans into the Autel Remote Expert platform. This integration, now available on Autel MaxiSYS Ultra series tablets and MaxiFlash XLink standalone communication devices, increases efficiency by reducing the number of in-shop tools needed to support vehicle diagnostics, calibrations and programming events.

GCIA December Meeting to Feature Mike Anderson

Anderson will give a talk titled “Be Extraordinary” at the Georgia Collision Industry Association meeting on Dec. 13.

Central PA I-CAR Holding Bingo Fundraiser

The fundraiser, which will be held Jan. 20, 2024 from 1-5 p.m., will benefit Central Pennsylvania area collision programs.

NABC Forms Changing and Saving Lives Foundation

The Changing and Saving Lives Foundation, a 501(c)3 organization, was founded to provide support and assistance to families in need, military members, veterans and first responders.

Precision Diagnostics Approved for Ford’s Collision & Glass Program

Madison, Wis.-based Precision Diagnostics recently earned approval as an authorized service partner on Ford’s Collision & Glass Certification program for ADAS calibrations.

Other Posts

TechForce Foundation Names New Chief Growth Officer

As chief growth officer, Jennifer Bergeron brings over 20 years of experience in technical education and organizational management to TechForce.

CREF Selected for LKQ Holiday Vote Fundraiser

The Collision Repair Education Foundation (CREF) was selected as one of the 10 participation charities in the LKQ Cares Holiday Vote fundraiser for this year.

Ford Approves AirPro Diagnostics for Collision, Glass Programs

AirPro Diagnostics announced that Ford has approved AirPro as a diagnostics and calibrations provider to ensure a complete and safe repair.

ASA Applauds Regulatory Proposal that Excludes Collision Repairers

The proposal would have increased required reporting under a revised Air Emissions Reporting Requirements (AERR) regulation.